Buying a house is a great adventure and a consequent real estate purchase, whether for a main residence or a second home or a rental investment. This future acquisition raises many technical, administrative, financial and human questions. Buying a house requires an investment in terms of time (research, visits, negotiations, financing, contract, etc.) and in financial terms (it is a significant purchase and has an impact on a household’s budget).
Don’t we say that buying a house is the investment of a lifetime? Don’t be afraid to overdo it when choosing your future home, and arm yourself with your checklist so you don’t forget anything.
Buying a house is a delicate event and a source of great reflection for a family. However, most people do not have all the information necessary to fully face such an important investment and that is why we intend to describe here the fundamental notions that should be known before buying a house.
The important steps before buying a house
When one embarks on the purchase of a house, the first question is to know what is the budget that can be devoted to it. In fact, all subsequent research will depend on this fundamental starting point, from the type of property chosen to its location. Without shopping around for banks and brokers, you need to have a reliable financial range, and even a stable business in order to know what to buy.
To do this, you have online financial simulation tools and you can initially base yourself on the current budget that you devote to your accommodation.
As soon as you have been able to define a concrete budget range, you must determine the geographical area in which you want to buy your future home. Unless you wish to be very specific, choose a sector that is large enough (but not too much either) in order to be able to look at all the existing possibilities and all the real estate available for purchase. You will be able to look in your sector to see if you can buy a house with land or without land, an old or rather new house, a land to build a new house etc.
Before coming in
Obviously, you can’t wait to set foot in what may be your future home, but also pay attention to what makes its immediate environment: noise, urban development projects and amenities will also be part of the game. of your daily life, just like the house itself.
●Take into account the administrative context
●Identify the immediate neighborhood
●Identify the peculiarities of a subdivision
●Find out about the amount of taxes
At this stage of the visit: you must go through everything with a fine comb, because the slightest oversight could, subsequently, force you to do work that you had not planned.
●Appreciate the state of the kitchen and sanitary facilities
●Every detail counts in the house
●Check the electrical installation
●Perform a heater diagnostic
●Estimate the thermal insulation of the house
●Examine the ventilation of the house
Don’t let your guard down when inspecting the exteriors: the garden, the swimming pool and even the walls and the roof are elements not to be overlooked. Indeed, while you can derive immense benefit from a well-maintained outdoor space, on the contrary spaces in poor condition can cost you dearly. Keep your eyes open and project yourself in the middle of summer in this garden!
●Linger on the pool
●Take a close look at the garden
●Roof, facade, inspect the smallest details
●Download all checklists
Examine the smallest details inside the house
●Check the condition of the electrical installation: do you need a diagnosis ? how many switches are there? What about electrical outlets? Where are they placed? Does the electrical installation comply with current standards?
●Are you interested in the condition of the kitchen and sanitary facilities: in what condition are the joints? Are there any leaks? Is the kitchen functional? Is there the “all-in-the-sewer”? What are the dimensions of the hot water tank? Is the bathroom damp? What ventilation system does the house have?
●Take a look at the insulation (thermal but also sound) of the house. How did the home score in terms of DPE? How many windows does the house have? What are their thermal performances? How are the living rooms of the house displayed?
●Look at the type of heating the house is equipped with: type of radiators, heating (gas, oil, solar, etc.).
●Carefully observe the ceilings, walls and floors (presence of stains, mold, fungus, etc.)
What are the hidden defects of an old house?
●Hidden defects designate poor workmanship which makes the accommodation unsuitable for its residential use. To be considered as a hidden defect, the defect must be “serious” and be prior to the sale.
Before visiting the house
●Make an estimate of the costs associated with your purchase ( notary fees, agency, moving, work, housing tax, property tax, …).
●Take an interest in the immediate surroundings of the house (neighborhood, transport network, nurseries / schools, shops, presence of possible easements, building land, development projects, PLU, etc.).
●Make sure you have visited other properties before or visited others after.
When to buy a house?
Is a purchase more financially interesting than a rental?
Renting is not always “throwing money away”, the first thing to do before making your first real estate purchase is to compare buying and renting. You can use this comparator to buy or rent. You have to keep your home long enough for the purchase to be more profitable than the rental.
Is my geographic location stable?
The acquisition of a home is financially interesting compared to a rental only if one stays there enough years (the average is close to seven years now). However, the world of work requires more and more geographic mobility. Are you sure you will stay in the apartment or house you want to buy for more than six years?
How many years do I plan to keep the purchased home?
If you have a risk of leaving this accommodation after a few years, will it be possible for you to rent it easily and thus transform your purchase into a rental investment? Can you easily resell it at a price close to your purchase price?
Note that as a general rule, you should never buy for less than 6 years. This period can increase to 8 or 10 years during a period of falling prices. In some cities where prices are much higher than rents, this limit can exceed 20 years (this is the case in Paris now).
Are housing prices affordable?
While it is almost impossible to predict the low point of real estate prices, it is quite easy to know if the prices are over-valued or under-valued when you want to buy. For example by comparing the current level of house prices against their historical data.
The more you buy during a period when real estate is expensive, the longer you will have to keep this property to make a good transaction compared to a rental or simply to resell without too much loss after all the costs have been deducted.
Is my budget sufficient to buy the type of good I need?
Defining your short and medium term needs and the budget you can devote to your first purchase of a house or apartment is an important step. This borrowing capacity simulation could be used, for example. To know how to buy an apartment in Paris or elsewhere, having a little personal contribution thanks to your savings is very useful and it allows you to pay for your main residence with a smaller mortgage.
Type of property to buy
What is my need for medium and long term housing space?
When you buy a home it is for several years, so it is essential to clearly define your needs in terms of surface. Do you plan to have children in the coming years? Will your children be leaving home soon?
Where to buy my first home?
The location is the number one criterion for defining a good buy real estate. You must therefore be very demanding on the geographical location of your property (close to your work, proximity to shops and public transport, etc.).
Apartment or house?
Depending on the location and your budget, you may have the choice between an apartment and a house. While in France, the single-family home is the preferred accommodation, there are advantages and disadvantages to both types of accommodation. Do you prefer to live in a new large apartment or in a small old house?
Buying in new or old real estate?
Here again, the budget strongly influences the choice, and not everyone can make money fast and easy. If the new real estate offers housing without work, ready to be inhabited, it is also necessary to be able to support the inconveniences of a purchase in VEFA. A purchase in the old one can require some maintenance work, but it is generally in the old one that the houses have the most character.
Are you ready to do some work in your new home?
Not everyone is a handyman, but a home that needs work will be bought less than a new home or one that has already been renovated. If you know good craftsmen or are a good handyman, it may be financially more interesting to buy an apartment or a house to renovate.
With balcony, terrace, garden, parking, garage, lift?
What are the elements other than location, size and quality of housing that are essential to you? Which ones are for you a plus or without interest? The more you have prepared your research and clearly defined your target, the less time you will waste in unnecessary research and visits.
How is the current offer for this type of property in this sector?
Once you have determined your type of property, you will need to study what your local real estate market has to offer. Are there a lot of such properties for sale? Are they selling quickly? Are they in your budget?
What is the average price per m² for this type of apartment or house?
Your first study of the local market for this type of property will give you a first idea of the asking price. If you can manage to get the real selling price of a similar property, that would be a real plus. Indeed, the real transaction prices are often very different from the presentation prices displayed in the advertisements.
How to finance the purchase of a house?
When your choice is made, you must start your financing procedures as soon as possible, either with real estate brokers (who have access to all the rates of all the banks) or directly with each bank of your choice.
The advantage of using a broker is that you only file one file and it is he who will negotiate the best mortgage rates for you with banking institutions. Its brokerage fees are generally absorbed by the savings made on the total amount of the mortgage. Obtaining the financing of a property is a tedious operation and requires many administrative papers as well as a sense of informed negotiation.
Whether you want to buy a house for your primary residence or for rental or as a second home, your financing plan must be validated and accepted so that the sale can continue.
Do not forget to include in your financing request the notary fees related to the purchase of the house (different notary fees depending on whether you are buying an old house or a new house).
You then have a period of 3 months from the moment you sign a sales agreement during which you must carry out all your steps and present your acceptance of financing of the said property, otherwise the transaction will be de facto void.
How to formalize the real estate sale?
From the moment you have found the right house, validated the right financing, you enter the process of the house sale contract which will be concluded by going to the notary and handing over the keys. It is in fact at the notary that the transmission of the property from the seller to the buyer will officially take place according to the rules of French law.
As soon as the mortgage, which was a suspensive clause for the outcome of the real estate sale, is granted, the sale process can be launched and the two parties then meet at the notary in order to confirm the final sale and the handover. keys in exchange for the balance of the price and related taxes.
Therefore the new owner of the house can invest the premises or rent it out if it was a rental investment, or even start renovations. Whatever the destination of the property you have just purchased, you have just finalized a substantial transaction and a new page is being written.
Buying a house from a private individual or from a real estate agency
Is it better to buy a house from a private person or from a real estate agency? What is the best solution? Let’s say that the negotiation of the purchase of the house conducted privately allows you to save on agency commissions, but can expose the buyer to various risks deriving from the lack of preventive control on the house. Relying on the agency can be convenient because usually the media consultant to satisfy the requests of both the buyer and the seller.
What are the costs of buying a home?
Buying a home involves a large outlay of money. In addition to the costs for the purchase of the house and the choice to apply for a mortgage, the expenses that must be incurred are:
●the mortgage tax;
●the registration tax;
●the expenses for the deed;
●commissions in the event that the sale is brokered by a real estate agency;
●the ordinary maintenance costs of the property;
The condominium expenses can be of a high amount and affect the family budget. Contacting the condominium administrator can allow you to know the amount of the annual costs and if there are any debts on the property. Once the buyer has purchased the house, he becomes responsible for the unpaid condominium expenses of the current year and the previous year.
Taking into account the costs mentioned above, it is necessary to evaluate your own economic situation. Understanding what the mortgage payment will be and understanding if your income is sufficient to cover the expenses is a fundamental step to avoid being in difficult situations.
Check all necessary documentation
One step that requires a good deal of attention is checking all documentation. Here are some things to check before buying a house:
●Does the house have cadastral and building compliance?
●is the house equipped with the conformity of the systems?
●is the deed of provenance of the property present?
●Does the property have the cadastral plan and the cadastral survey?
Other checks to be carried out on the house are the verification of the mortgage situation of the property at the offices of the municipality, the energy performance certificate and the certificate of viability.
Verifying the home owner’s identity is a necessary step to be sure that you are actually negotiating with the right person. It is convenient to know if it is the sole owner or if the property has a donation origin. In the case of donations, the risk would be to buy a property which must then actually be returned to the legitimate heirs.
5 Questions to ask yourself before you spend
According to Joshua Becker, author of the blog “Becoming Minimalist”, the average size of the American home has doubled in the last 50 years. Becker notes that 10% of rented households take up storage space and that 25% of owners of a house with a garage can no longer park both cars. 76% of Americans live on pay for pay. The average US household credit card debt is $ 15,191. People are forced to work overtime and waste time with their families to pay off the accumulated debt to buy so much stuff. To combat this vicious cycle of obsessive shopping, I’ve put together a few questions that will help you think well before you spend.
Do I really need it or am i just buying it because it is for sale?
I know what you’re thinking: I really need another black sweater! But, wait a moment, think before you spend. If you already have something functional in your closet, then you really don’t need anything else. A bargain is not a bargain if the item we buy will likely never be bought.
Can you find it by spending less?
Something I always ask myself before buying anything at the mall is whether it is possible for me to get the same thing somewhere else for less money. Many times it is much cheaper to buy the same items or something similar online and sometimes even abroad depending on the shipping costs. If you do not have an immediate urgency, check online before purchasing in-store.
Can I afford it?
This is the biggest problem, especially for those who want to keep up with the latest trends. Sure, having a new car from the designer is wonderful, but are you buying “the novelty” or is it something that is really necessary? If you have to go into debt to buy the item, it might be time to let it go and work on how to save to buy it later. If you really want it, you will be happy to wait!
Is it an impulse purchase?
You had a bad day at work and that bag looks great now. We all fall into the trap of impulse buying or emotional shopping. Impulse purchases are the worst type as there is usually little thought behind the purchase but a lot of guilt afterwards. Instead of buying something when you feel low, hold on and sleep on it for one night. Alternatively, it is possible to spend a month: if you still want the object after 30 days it means that it was not the impulse to guide you in the purchase.
Can I find it for free?
There are a lot of trading sites where you can find items practically for free. Before buying a brand new printer for your office, check out sites like Craigslist.com to see if there is a free or, at least, less expensive alternative. Another alternative is to check the Facebook groups in your area or ask a friend or family member: they may need to get rid of some object that could be useful to you!