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The most common mistakes when buying real estate

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The most common mistakes when buying real estate

The most common mistakes when buying real estate 2309 1299 HYPOHAUS - Swiss Mortgage Broker Experts

Buying a property is one of the biggest financial decisions in life and requires careful planning. In addition to choosing the right property, financial aspects such as selecting the appropriate mortgage and conducting a thorough mortgage comparison play a crucial role. A rushed purchase or inadequate planning can lead to high costs or unpleasant surprises in the long run. In this article, we will outline the most common mistakes and how you can avoid them to make your property purchase a success.

Lack of Due Diligence in Property Evaluation

Many mistakes occur because potential buyers rely too much on first impressions or overlook important details. Take your time to thoroughly inspect the property and review all relevant documents.

Mistake I: Overrating Photos

Perfect pictures of pristine facades and sunlit rooms can be deceiving. Online listings and brochures always showcase properties in their best light—often with the help of photo editing. Therefore, don’t rely solely on images; visit the property in person and look out for potential defects.

Extra caution is required when purchasing an off-plan property—one that does not yet exist. In such cases, ensure that a detailed construction description is included in the contract and inquire about the possibility of regular site inspections.

Mistake II: Overestimating the Condition of the Property

A house or apartment may seem perfect at first glance, but hidden issues can lie beneath the surface. Many buyers underestimate the necessary renovation work and overestimate the actual quality of the building structure. Factors such as insulation, window seals, or heating systems are difficult for non-experts to assess. A property surveyor can help provide a realistic evaluation of the property’s condition and estimate future renovation costs.

Mistake III: Inadequate Review of Documents

Buying real estate involves a significant amount of paperwork: purchase agreements, land registry documents, construction plans, and more. These documents can be complex and should not be signed hastily. Take the time to review everything thoroughly—ideally with the help of an expert. Rushing into signing could result in unpleasant surprises.

Avoiding Financial Pitfalls

Buying real estate requires careful financial planning. Misjudging costs or being overly optimistic about budgets can become a long-term burden. In addition to the mistakes listed below, you can find additional financial planning tips here.

Mistake I: Underestimating Ongoing Costs

Monthly expenses for mortgages, maintenance, and insurance should not exceed one-third of your gross income. Many buyers tend to be overly optimistic about ongoing costs and often forget important items such as repairs, utilities, or tax liabilities. It’s crucial to calculate with a realistic long-term interest rate and set aside a financial buffer for unexpected expenses.

Mistake II: Not Negotiating the Purchase Price

The listed purchase price is not always set in stone. Especially for properties that have been on the market for a while or have visible defects, price negotiations can often lead to savings. A strategic approach and knowledge of the local market can help lower the purchase price and reduce overall costs. However, be cautious—excessive haggling in a competitive market could lead to losing the property to another buyer.

Mistake III: Making Advance Payments Without Security

One common trap is making an advance payment to the seller too early. Payments should never be made directly; instead, they should be deposited into an escrow account at a bank. This ensures that the funds are only released after the contract is fully signed and legally binding.

Mistakes in Planning and Execution

A successful property purchase requires not only financial foresight but also thoughtful planning and a careful selection of partners.

Mistake I: Blindly Trusting the Builder

If you are considering a new build or major renovation, thoroughly vetting your construction partner is crucial. Unfortunately, there are unreliable providers in the industry. Check references, obtain a debt clearance certificate, and verify the ownership of the land. A trustworthy construction partner is key to the success of your project.

Mistake II: Overlooking the Fine Print

Warranty clauses are a crucial part of the purchase agreement. Ensure that the liability for defects is not transferred to subcontractors, as this can make it difficult to address issues later. Also, make sure that key handover is not tied to the full payment of all invoices, which could lead to disputes if problems arise.

Mistake III: Underestimating the Neighborhood

The property itself is important, but so is the surrounding environment. Check infrastructure aspects such as public transportation, schools, and shopping facilities. Less obvious factors like noise pollution, future construction projects, or environmental concerns should also be considered. Visiting the area at different times of the day can provide valuable insights.

Mistake IV: Rushing into the Wrong Property

The first property you view might seem perfect, but patience pays off. Comparing multiple properties allows you to make an informed decision and avoid future regrets. Rushing the purchase could mean missing out on better opportunities or accepting compromises you later regret.

Conclusion

Buying a property is a major financial decision that requires careful planning and thorough research. Financing plays a crucial role in this process—the right mortgage and a comprehensive mortgage comparison are key to long-term financial stability. It’s worthwhile to compare different offers and seek professional advice to secure the best terms for your needs.

This is where HYPOHAUS comes in as your reliable partner. With our expertise, we help you find the optimal financing solution and guide you through every step of your home-buying journey.

Contact us today to learn how we can support you on the path to your dream home. Find an overview of our services here.