Do you want to buy real estate? Are you a first-time buyer or do you want to revise your “basics”? Buying real estate is a tortuous path, strewn with pitfalls (no, in reality it’s ok)… But rest assured, with good preparation there will be no unpleasant surprises!
Here is all our advice at each stage of the purchase of a property. Enjoy! 😉
First step of a real estate purchase: Calculation of the real estate budget and identification of needs
It just makes sense! The first step to becoming an owner consists in identifying your real estate needs within the limit of a determined budget (unless the over-indebtedness procedure does not scare you! 😉 ).
So, how to determine your budget for the purchase of the house or apartment of your dreams?
Calculate your real estate budget
The calculation of your real estate budget takes into account two concepts:
- your personal contribution is the money you have saved for the purchase;
- your borrowing capacity.
By combining your personal contribution with the amount you are able to borrow, you can determine your real estate budget.
Moreover, your borrowing capacity is essential since it will determine the amount you can borrow from the bank. It depends on several factors such as:
- household income;
- the nature (salary, land, BIC or BNC for entrepreneurs, etc.) and the regularity of income;
- your expenses and constrained charges (water, electricity, gas, internet, taxes, consumer loans, etc.);
- the composition of the household (single, couple, number of children, etc.)
- The general idea of ​​borrowing capacity is to determine the amount of loan repayments that you can afford. This step being difficult to calculate, you can start on a good basis by approaching a mortgage broker (why not Helloprêt? 😉 ).
If you’re in a hurry, you can also use our mortgage simulation tool.
In any case, whether with your banker or with a broker, have your financing plan validated upstream to avoid disappointment during the following stages of your real estate purchase!
Our small advertisement has passed, it is time to be interested in the search for the duplex (a castle is cool too) of your dreams!
Also Read: How to buy a property without an agency?
Determine the criteria for your future principal residence
When buying real estate, keep two things in mind:
- your personal needs;
- resale of the property.
In this first case, you should define your search criteria taking into consideration the following characteristics:
- the location of the property;
- new or old real estate;
- available surface area
- Number of pieces ;
- floors, presence of a lift, quality of the outbuildings (for an apartment);
- budget…
The characteristics of the property must be determined according to your current and future family and professional situation. If you anticipate the happy arrival of a child, plan for the layout of the property to accommodate the newborn in good conditions.
Similarly on the professional aspect, you must be able to anticipate a minimum of changes in your household income in the short and medium term.
Indeed, when you buy a property to make it your main residence, you must occupy it long enough for the valuation of the real estate market to absorb all the purchase costs (notary fees, leasing commission). real estate agency, brokerage fees, etc.). Otherwise, you risk reselling at a loss… To avoid this pitfall, project yourself on a horizon of about 5 years while hoping that the real estate market will continue its continuous rise! (Of course, this horizon is indicative and essentially depends on the location and characteristics of the property).
Which brings us to our second point: think about resale! To do this, you have to ask yourself the right questions at the time of purchase:
- Is the market liquid? (ie: will you be able to sell your property quickly?). For example, at the time his lines are written, an apartment sold in Paris can go under an offer to purchase in less than 24 hours. The Paris real estate market is therefore hyper liquid! Conversely, a house in the depths of the Creuse can take several months to be sold. You must therefore take all of these parameters into account when making your purchase. The best technique to measure the liquidity of the coveted property is to check its date of sale with the real estate agent (provided that he does not tell you salads…);
- Is the coveted property atypical or standardised? An apartment located on the 7th floor without a lift is not suitable for all buyers, thus reducing the number of potential buyers at the time of resale;
- Is the price of the property consistent with the market price? To be sure, you can consult the notarial databases listing all the real estate sales carried out according to the city, the type of property (house or apartment / new or old), the period… This will allow you to know the average price per square metre applicable to the coveted accommodation.
Organise your property search
This advice is particularly valid when you want to buy an apartment in an area where the real estate market is under pressure, such as Paris. It will be necessary to be particularly keen on the publication of the announcements and the contact with the real estate agents to agree on the schedules of visits. Since it is unlikely that you will come across the apartment of your dreams from the start and that there are many potential buyers, you will need to stand out with a formidable organisation to keep track of your research and make the right decisions. .
To do this, you can use an Excel spreadsheet mentioning the main characteristics of the property (or another project management tool) and all the useful information to facilitate contact and decision-making.
Now that you are in possession of the complete Stéphane Plaza kit, you can make your first purchase offers!
Second stage of the real estate purchase: the purchase offer and the sales agreement
Your angle of attack determined, it’s time to attack the real estate market. Arm yourself with your phone, list the ads and let’s go! Like a Wall Street trader, you demonstrate unfailing diligence in setting up viewing appointments, optimising your schedule… As soon as you like a property, you jump at the chance. to be the first to visit!
The offer to purchase the property
Have you just paid a visit? Do you want to buy the house or the apartment? Do not hesitate to quickly position yourself as a potential buyer! Indeed, only the sales agreement signed after the expiry of the withdrawal period really commits you.
But before that, you have to make an offer. Traditionally, there are two types of purchase offers:
- the offer at the price, i.e. you accept the price mentioned in the real estate ad;
- the offer below the price, that is to say that you invite the seller to negotiate the price of the property.
As for the offer at the price, from a legal and theoretical point of view (#fun), the seller has the obligation to sell you the property because of the perfect match between the firm offer and its pure and simple acceptance. But, this legal conception in real estate remains theoretical:
- the real estate agent often sends all the offers to the seller at the same time so that the latter can sort through to identify the best buyer (the one proposing, for example, an offer without a condition precedent, we will come back to this…);
- the compensation due to an evicted buyer is strictly theoretical insofar as it would be necessary to prove a repairable damage;
- The sale is validly concluded at the time of the signing of the authentic deed before a notary and not before (although the signing of the sales agreement commits the buyer and the seller to carry out the sale).
Therefore, do not hesitate to forward your offer to the real estate agent or seller. Until then, no one will force you to sign the sales agreement.
The signing of the sales agreement
In the end, it was not an offer lightly… Perfect! It is now necessary to sign the real estate sales agreement with the seller.
To simply define things for you, the sales agreement is a contract (pre-contract) committing the parties (the seller and the buyer) to carry out the sale before a notary (the authentic deed) when certain conditions are met:
- the obtaining of the loan by the buyer (the condition precedent of the loan). Note that the compromise can be signed without a condition precedent of the loan if you are sure of being followed by your banker (in this case, ask for a written commitment from him) or that you do not intend to resort to a mortgage for the loan. purchase of the property;
- the completion of the buyer’s withdrawal period. When you sign the sales agreement, you have a period of 10 days to withdraw without any particular reason and without charge. So don’t panic if you change your mind!
The payment of capital allowances
When signing the compromise, the seller may require the payment of capital allowances (deposit) between 5 to 10% of the sale price. These immobilization allowances are used to compensate the seller in the event that you change your mind once the withdrawal period has elapsed. Several scenarios are to be distinguished:
- the sale is made, the capital allowances are subtracted from the sale price;
- the sale did not take place, because you did not obtain your loan within the time limit set by the condition precedent, the seller reimburses you the indemnity (except in the absence of a condition precedent);
- the sale has not been made because you have changed your mind after the withdrawal period, the seller keeps the percentage of the sale price.
It is therefore preferable to sign a compromise with a suspensive condition, although the seller would prefer that you waive it!
In broad outline, you are aware of the important things about the compromise! Now, we must fulfill the condition precedent by obtaining real estate financing!
Third step of a real estate purchase: obtaining the mortgage
This step could be step 2.5 of buying real estate. Indeed, it is strongly advised to approach your bank as soon as the oral or written purchase offer is made to have time to compete. You want to save time (and therefore money), avoid blocking situations and benefit from the best rates, it is strongly recommended to call on a [real estate loan broker
Call a real estate broker
One of the main problems in loan negotiation is your position as the applicant vis-Ã -vis the bank. The latter knows that you are emotionally engaged in your real estate buying process and that you would have to bend over backwards to go through the stages of buying that house or apartment.
This situation is particularly delicate since you are not in a position of strength (especially if you have waived the condition precedent…). The bank could then abuse it to offer you particularly unfavourable loan conditions. To restore the balance of power in the negotiation, you can call on a mortgage broker.
The real estate broker is a credit intermediary who positions himself between you and the bank to obtain your real estate loan. A true trusted third party, he will canvass the banks for you in order to compete, find the most favourable loan conditions and above all, maximize your chances of obtaining one.
While most traditional brokers charge commissions on the amount of loans negotiated, Helloprêt, as an online real estate broker, offers its services free of charge to individuals.
Compliance with deadlines for obtaining the loan
That said, it is high time to get your loan and time is running out.
The compromise (and more particularly, the condition precedent of the loan) is valid for a limited period of time (between 45 and 60 days). If you do not have the financing in time, you no longer have the obligation to buy the property and the immobilisation indemnity will be returned to you (unless you have waived the condition precedent). On the other hand, if you have not obtained a loan without justification of having canvassed at least two banks within the 45 to 60 days, the seller may keep the immobilisation indemnity.
How to maximize your chances of getting your home loan?
To speed up the process and maximize your chances, here are our tips:
- prepare your loan application file in advance (ID, account statements, payslip, tax declarations, etc.);
- do not hesitate to highlight your file by arguing about your repayment capacities;
- negotiate the interest by playing with the competition while keeping in mind the cost of the compulsory insurance of the loan (therefore think in terms of the overall effective rate !) and the other costs inherent in the purchase of a property ( registration fee or notary fees, commissions, etc.);
Don’t forget that your real estate broker can help you through this delicate step. A real expert in negotiating with banks, he will be able to highlight your file while providing you with the best advice on the stages of buying a property!
Last step of a real estate purchase: the signing of the authentic deed
The appointment before a notary is fixed, the loan offer has been signed. All you have to do is sign the final deed of sale: the authentic deed. The signature is done at the notarial office designated in the compromise. Once the deed is signed, the notary operates by bank transfer for the benefit of the seller, then the latter sends you all the keys to the property.
You are now the proud owner of your new apartment or house! All that remains is to detect the hidden defects, but that’s another story… 😉