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My home is my castleBuying your own home is possibly the single biggest investment you decide to make in your life. However, it is much more than just a question of finance. You want to create a special, individual homefor yourself and your family. |
Step 1 – What is your budget?
When you buy an apartment or a home, you normally have to raise a deposit of 15-20% of the purchase price yourself. Most people take out mortgages for the remaining 80-85%. Try to be conservative in your calculations. Do you have sufficient funds available to pay the purchase price and all the other costs, including the future costs? The outlay of interest payments and capital repayments should not exceed one third of your income. It is also interesting to know how much rent can your chosen house or apartment earn if you ever wish to sublet your home later.
Step 2 – Choose the property
Location
The location is the most important factor in the choice of property. Different people have different criteria and perhaps you wish to live in a certain canton or school catchment area or prefer to live by a river or lake. The important thing for most people is to be close to a good public transport service. One tip: if you are prepared to travel a bit further to and from work, you might find housing at more attractive prices.
Type
What needs does the property have to satisfy? Is the number and size of rooms or the layout right for you? Would you like a house with a garden or would you prefer to own an apartment? It is worthwhile giving all these a great deal of thought.
Step 3 – View the property
Contact the present owner yourself or through your estate agent to make an appointment. The owner can answer any questions that you may have about the house, the apartment or the land. Also, have a notary public person ascertain the precise legal situation. If the property is located within a different town or canton, it will be wise to find out about the tax regulations and any other peculiarities specific to that town or canton.
Step 4 – Make an offer
There is a good chance that the vendor has deliberately pitched the asking price too high. Therefore, do not accept the first price stated straight away, try to negotiate. You are advised to base your offer on a professional report (step 5).
Step 5 – Report, valuations and the property's legal situation
- It is advisable to have a comprehensive report done on the property, which will give you detailed information about structural problems, the technical condition of the property, the costs involved in future renovations or maintenance. This type of report can be expensive and in some cases it may uncover some unwanted, surprise costs before you go ahead with the purchase.
- The lender has to know the market value of the property and therefore should conduct its own valuation. External valuers will also be brought in some cases.
- It makes sense to clarify the precise legal circumstances. Third parties often have rights in the form of mortgages, right of way and building rights attached to properties. You can obtain an extract from the Land Register if you can indicate the nature of your interest or with the owner's permission. Cantons have their own Land Registry offices.
- The notary public person will also check the legal situation when the contract of sale is drawn up.
Step 6 – Arrange the finance
When the contract is signed, you normally have to pay 15%-20% of the purchase price. If you are not paying the full amount from your available funds, you will need a binding mortgage offer from a bank at this stage. Some lenders will even issue a certificate showing the agreed mortgage sum.
Step 7 – Ask a notary public to draw up a contract
The parties to the contract and the lending bank frequently engage the services of a notary public as an independent third party to guarantee that the purchase price is paid on the buyer's behalf. It is also seen that the bank obtains one or more mortgage notes in return for providing the mortgage sum.
Step 8 – Move into your new home
While you may be excited about your new home there are a few points which you must not forget:
- Check your insurance arrangements. Cantonal buildings insurance only covers damage to your property or to the building. Therefore, we would advise you to arrange additional home-contents insurance.
- Notify all the relevant authorities and offices as well as your friends and family of your new address.
- Meet your mortgage repayments regularly and punctually. The simplest way is to have the money debited automatically from your account by direct debit or standing order.
