Unlike other commercial transactions that you can make on the market, buying a property requires a lot of preparation. As a rule, it is a purchase that you are making for the long term. If you are looking for a property for your own use, in many cases it is a once-in-a-lifetime purchase. It is important that you still feel comfortable in your own property in many years’ time. Check your own requirements for the property and define criteria that you will never fall short of. This will ensure that you won’t be annoyed about your purchase in a few years’ time. Another aspect that often stands in the way of a quick and spontaneous property purchase is the high price you have to pay to buy a property compared to other commercial transactions. As a rule, you will need to apply for financing. The financing is often made up of various components. Last but not least, the search for a suitable property takes time. This is especially true if you have certain requirements regarding the location or the region in which you would like to live. We give you five tips for buying real estate that can help you find the right property for you.
With our 5 tips, your real estate purchase is guaranteed to be a success
Our tips on buying a property can help you to find the property that meets your requirements and that you can finance securely within a reasonable period of time. Good preparation for buying a property pays off in any case. A hasty purchase or uncertain financing are factors that you should avoid at all costs: They can lead to problems at a later date. Bear in mind that buying a property is a long-term investment. Your circumstances and your requirements may change during the time you own a property. Try to consider as many eventualities as possible before you decide to buy. Your requirements and financial situation may change over the years. Good research and preparation will pay off if you want to be happy with your purchase later on. It is also important that you check all available documents and make sure that the offer is correct before you sign the purchase contract. This will protect you from unpleasant surprises, which unfortunately occur time and again when buying a property.
1st tip for buying real estate: Draw up a cost plan and plan the financing
Buying a property is a capital investment that you will benefit from, especially in old age. If you buy the property as early as possible in your life, you can pay off the mortgage before you retire. This means that you can live rent-free in old age. In this way, you can offset a small pension payment, especially in regions where rents are very expensive. This has a positive effect on families, for example: If one parent takes on child-rearing, this often goes hand in hand with a few years of child-rearing. This reduces pension entitlements compared to people who work full-time. The creation of residential property and the associated rent-free living can offset the portion of income that would otherwise have to be spent on rent. If you create property that you want to rent out, you benefit from the rental payments. In any case, you create a capital investment that becomes more valuable over the years. This is especially true for properties in a sought-after region in a good location. The most important prerequisite for creating a profitable investment is secure financing. There are a few things you should bear in mind here.
Calculate the available income
There are several steps involved in planning real estate financing. First, you determine the total income available to you. Then deduct your running costs. These include loans, living expenses and commuting costs. Please note that the running costs for the property do not only consist of the financing. In addition to the bank loan, you must also bear the costs of maintenance.
These include:
+ Costs for heating
+ Costs for electricity and the preparation of hot water
+ Costs for water and waste water
+ Fees for the chimney sweep
+ garbage fees
+ Costs for property tax
+ Formation of a reserve for repairs
Please note that you are solely responsible for repairs and renovations. This also applies if you rent out the property. The tenant only has to carry out cosmetic repairs. You are responsible for rectifying major defects.
Determine scope for financing
Once you have determined the amount you can spend on real estate financing, enter this amount into a budget calculator. This calculates the possible purchase price for a property. If you have equity, add this amount. Your property should not be more expensive than the value calculated in this way.
Submit a financing request
The next step is to submit a financing request to a bank or savings bank. It is advisable to submit several requests. This will help you find out whether you will be approved for financing. In any case, the financing request is non-binding and you do not enter into any obligations. If the bank gives you the green light, you can start looking for a suitable property.
2nd tip for buying real estate: Define your requirements for the property
In the second step, you define for yourself what requirements the property should fulfill. What requirements do you have for the location of the property? What features do you want? Would you like to renovate the property yourself or buy a property that you can move into virtually turnkey? Consider the following tips for buying a property to find one that meets all your requirements.
The location of the property
The demands placed on the location of a property can vary greatly among clients. Do you want a central location with short distances and are you willing to accept a smaller garden or more noise pollution, for example from roads? Or would you like to live in a quiet area and travel longer to work and the shops? In view of the change in your living situation, also consider the accessibility of doctors and shopping facilities. If you have high expectations in terms of leisure activities, these should also be met.
Your individual space requirements
The larger the property, the higher the price. You should only make a few compromises in terms of space. This is especially true if you are unable to add on or extend later. As a rule of thumb, you should plan a separate room for each additional person in addition to the living room and bedroom. Ideally, there should be another room for guests or for pursuing a hobby. If you work from home, you will also need space for this. A cellar, outbuilding or garage are recommended if you need a lot of space for leisure activities.
The financial burden
The financial burden must remain manageable even in exceptional situations. Take into account any loss of income due to a change of job, the birth of a child, unemployment or illness. Ideally, you will be able to bear the burden with one income.
Energy consumption
The cost of purchasing energy has risen sharply in recent years. A further increase cannot be ruled out. You should therefore scrutinize your home’s energy consumption and possibly plan renovation measures to reduce energy consumption. You may be eligible for subsidies for this.
The development plan
Take a look at the development plan before you buy. Are there any major developments planned in the next few years that could permanently change the situation? You can obtain information from the building authority of the town or municipality.
The land register entry
You should be entered in the land register together with your partner. There should be no loans or conveyances. It is also important not to register a lifelong right of residence.
Equipment and overall condition of the property
The furnishings and overall condition of the property should be in proportion to the purchase price. Decide whether you want to carry out renovations and apply for additional funds or whether you would prefer to buy a property that you can move into immediately.
3rd tip for buying real estate: You should have the house thoroughly inspected before you buy it
One of the most important tips when buying a property is to inspect the property before signing the purchase contract. In this context, pay attention to the following features and, if necessary, obtain the opinion of experts, for example through an expert opinion:
Energy efficiency
Does the property have good insulation and a modern heating system? If this is not the case, you should include the costs of renovation in the financing.
Moisture, sponge and mold
If there are such problems, a comprehensive renovation is usually necessary.
Pollutants
Check whether the building is contaminated with asbestos, wood preservatives, PCBs or formaldehyde. Sometimes it is better to refrain from buying the property due to the high follow-up costs.
4th tip for buying real estate: Request all important documents for the property
Documents are required for the successful purchase of a property. You can obtain these from the owner or the authorities. Ask to see these documents before the final purchase. This will provide you with important details about the condition of the property.
The essential documents include:
Floor plans, site plans, building documents (if available)
For leaseholds, you should request the lease agreement
Land register extract – this should be free of encumbrances
For jointly owned property (terraced house/condominium) you will need:
+ declaration of division
+ certificate of completion
+ Community regulations
+ partition plan
+ Minutes of the last owners’ meetings
Energy certificate
Extract from the register of building encumbrances (important for pipe stem properties)
5th tip for buying real estate: Read the purchase contract carefully
Have you decided to buy a property and would like to make an appointment with a notary? In the case of private buyers, the law stipulates that there must be at least 14 days between the delivery of the purchase contract and the notary appointment. This means that you will receive the purchase contract two weeks before the actual notary appointment. This allows you to check the contract at your leisure and ask an expert for advice if necessary. No matter how excited you are about your new property, make sure you take enough time to review the purchase contract in detail.
The purchase contract should contain these details:
– Information on the size, location and furnishings of the property
– Information on fixtures and fittings that are also being sold (fitted kitchen, garage, fireplace, awnings)
– Assurance by the seller that he is not aware of any contaminated sites such as pollutants that are not mentioned in the purchase agreement
If you have any questions, please contact the notary, the estate agent or the owner of the property.
Well prepared for buying a property with the right tips
Take the tips into account to be well prepared for the purchase of the property. The more intensively you deal with the property, the better protected you are against unpleasant surprises. Don’t be afraid to get in touch with the relevant contact person immediately if you have any questions. If you have any doubts, you should refrain from buying the property.
