12 Steps to Your Dream House or Flat

5.5.2022
  1. Define needs
  2. Clarify financing
  3. Analyse property market
  4. Search for house or flat
  5. Compare favourites
  6. View house or flat
  7. Arrange financing
  8. Negotiate purchase price
  9. Declare purchase interest
  10. Sign mortgage contract
  11. Sign purchase contract
  12. Purchase contract, deed of debt and land register entry

Buying a house or flat is complex. That's why we have divided the buying process into twelve steps and explain in easy-to-understand terms what you should pay attention to at each step. From the definition of needs to the entry in the land register. In addition, we have developed smart tools for all steps that support and relieve you. This is how Houzy makes home ownership easy.

Step 1: Define needs

Buying a home is one of the most important decisions in your life with far-reaching consequences, not only financially. That's why you should take your time. First clarify your needs with these eight questions:

  1. Where do you want to live?
  2. How much space do you need?
  3. How much rest do you need?
  4. How much free space do you need?
  5. Do you like your neighbours?
  6. Do you love working in the garden?
  7. Are you manually skilled?
  8. How old are you?

The answers will help you decide where to look (location) and what to look for (house or flat). It is best to answer the questions with your partner and children, if they are old enough.

Good to know

Are you unsure whether you are the single-family house or the condominium type? Talk to a certified realtor from our partner network.

Tip

In our article "Buy a house or a flat: Which suits me better?" we guide you safely through the decision-making process and explain all relevant points in an easy-to-understand way.

Smart Houzy tools for the definition of needs

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Step 2: Clarify financing

Once you know what you are looking for and where, you should consider how much financial leeway you have. For debt financing from a bank, you need to meet two conditions:

  • Loan-to-value ratio: Banks lend up to 80 per cent on owner-occupied residential property. If you have 200,000 francs in equity, you could buy a house for 1 million francs.
  • Affordability: Housing costs (mortgage interest, amortisation and ancillary costs) may not exceed one third of your household income. If you earn 160,000 francs a year, you could take out 800,000 francs as a 1st mortgage (up to 65 per cent) and 2nd mortgage (the rest).

Many fail due to affordability, although they could afford the mortgage thanks to the low interest rates. To be on the safe side, however, banks calculate with an imputed mortgage interest rate of 5 percent. With a financing certificate from your house bank or from key4 by UBS, you know your financial leeway and have an ace up your sleeve when negotiating with a broker or seller.

Good to know

The more own capital you bring in, the lower your housing costs will be. In return, you can deduct less debt interest from your income and debt from your assets in your tax return.

Tip

In the articles "Equity for house purchase: Alternatives to a savings account" and "House purchase with pension funds: What you should consider" we explain how you can finance home ownership. In the article "Rent-to-buy: The dream home with less equity" we present an alternative to house purchase.

Smart Houzy tools for funding clarification:

Step 3: Analyse property market

Start a property search with the important parameters (step 1) and get an overview of the regional property market and prices. Our innovative property search aggregates all sales listings from the leading online platforms, enriches them with valuable additional information and covers 90 percent of the Swiss market. When you set up a search subscription, we monitor the property market for you. A realtor can tell you about the regional characteristics, and with our mortgage comparison you can find out how high the interest rates are.

Good to know

One-family houses are the most expensive, condominiums the cheapest, semi-detached and terraced houses are about in the middle. You live cheaper in the country than in the city.

Tip

You can find our tips for the property search in the articles "Online Property Search: How to find your dream home" and "How to find a new home despite high property prices".

Smart Houzy tools for market analysis

Woman searches for dream house on laptop
Analyse the market and define search criteria for your dream house or flat.


Step 4: Search for house or flat

Once you have an overview of the regional property market, take a closer look at some flats or houses with our property search. Save your favourites, compare the sales prices with our market value estimate, check the renovation needs, estimate the approximate renovation costs, find out the energy efficiency class and how to improve the energy efficiency or analyse the solar potential, for example, if you are interested in houses. And all this online, without having to visit the house or flat.

Good to know

Because more and more people are working from home, demand is increasing outside the centres. For example, at Lake Constance, in the Rhine Valley of Chur, in Gros-de-Vaud, in the upper Baselbiet or in the Zürcher Weinland.

Tip

Set few criteria in your property search. If you get too many search hits, you can always define more search criteria and thus filter the results.

Smart Houzy tools for property search

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Step 5: Compare favourites

Compare all the houses or flats that have convinced you. Make a list of pros and cons, weight what is important to you (must have) and less important (nice to have), compare the possible renovation and refurbishment costs or calculate how much money should be in the renewal fund if you are interested in flats. This way you can better judge whether a selling price is fair or high and choose your favourites for viewings. The findings also help you to adjust your search and find even better offers.

Smart Houzy tools for object comparison


Step 6: View house or flat

Arrange initial visit appointments. It is best not to start with your top favourite so that you can learn what to look out for. The first visit is not yet a substance or condition analysis. It is only about questions like "Do you feel comfortable?", "Does the floor plan fit?", "Are the rooms big enough?", "Do you like the finish?" or "Do you want to live here?". If you have answered "yes" to all the important questions with conviction, you should arrange a second viewing.

Only at the second visit it is a question of substance and condition. If you are an inexpert, have an expert accompany you. Check everything: exterior and interior walls, windows, doors, electrical installations, building services, house connections, water and sewage pipes, heating, hot water system, insulation, kitchen, bathroom and guest WC. This is worthwhile, especially if you discover hidden defects. Also ask the seller why he wants to sell, what defects he is aware of, how he has renovated the house or flat and approximately how high the service charges are. The more you know, the more informed your decision will be.

Good to know

Older houses or flats are sold "as seen" and any warranty claims are often excluded, as far as legally permissible. Serious sellers and estate agents do not object to a second viewing with a professional.

Tip

In the articles "Checklist: How to prepare for a house inspection" and «Checklist House Inspection» we have summarised what you should look out for when viewing a house or flat.

Smart Houzy Tools for Visits

Step 7: Arrange financing

At this point at the latest, you should talk to your bank about financing or arrange financing online. For the mortgage loan application, the bank, investment foundation or pension fund needs a dossier with the complete property documentation and all documents relating to your financial situation:

  • Current salary statement and pay slips for the last 3 months if you are employed
  • Balance sheet and income statement for the last 3 years if you are self-employed
  • Latest tax return
  • Overview of your own funds
  • Overview of your debts
  • Current credit information
  • Copy of your identity card or passport and, if applicable, your residence permit

Based on these documents and their market value assessment, the bank decides on your application. If it is prepared to finance the purchase, it confirms that it can be financed in principle.

Good to know

Banks lend on residential property according to the lower of cost or market principle. If the sales price is higher than the market value, you have to raise the difference yourself as additional own capital.

Tip

You will find a complete overview of all the documents required for your loan application in point 4.1 of our «Checklist House Purchase».

Smart Houzy tools for the financing conversation

Couple negotiating mortgage with bank adviser
Once you have found the right property: Arrange the financing.

Step 8: Negotiate purchase price

If the property has convinced you and you have enough financial leeway, you should talk about the price. The basis for price negotiations is a market value estimate, such as our property valuation. Demand is currently higher than supply, so you are in a weaker negotiating position. Nevertheless, there are good reasons for negotiations. For example, if you discovered hidden defects during the inspection, the need for renovation is greater than assumed or the property has been on the market for a long time because demand is low and/or the price is too high.

Good to know

Banks lend on residential property according to the lower of cost or market principle. If the sales price is higher than the market value, you have to raise the difference yourself as additional own capital.

Tip

In the article "Hedonic estimation: See how we rate the market value of properties" we explain how the computer model works and why most banks rely on hedonic valuation.

Smart Houzy tools for price negotiations

Step 9: Declare purchase interest

Probably others are also applying for the house or flat. With your application dossier, you will score points with the seller and increase your chances. It makes sense to include it in your dossier:

  • A letter introducing yourself and your family and explaining why you want to buy the house. You may be emotional without exaggerating. Especially older sellers who have lived in a house all their lives and raised their children find it difficult to part with it.
  • The financing confirmation from your bank, which proves your interest in buying and your creditworthiness to the seller. If you can present the confirmation now and not only when the purchase contract is to be signed, you improve your chances of winning the bid.
  • A CV with photo and a current debt register information, which you can order from your municipal or city administration or from the post office.
  • A COCI report from the Central Office for Credit Information and a criminal record extract, which you can order from the Federal Office of Justice online or at the post office counter if you think the seller attaches a lot of importance to security.

Step 10: Sign mortgage contract

Once you have won the bid, you need to finalise the financing. It makes sense to divide the amount into two or three tranches. This way you optimise the interest burden and spread the interest rate risk better because not all tranches have to be renewed at the same time. The model (fixed-term mortgage with fixed interest rate or flexible SARON mortgage), the term and the outlook on the money market determine the interest rate. Once you have secured the financing and signed the mortgage contract, you and the seller can have the purchase contract drawn up by a notary.

Good to know

The right mortgage will save you a lot of money. Compare terms and models and combine the best offers for short and long terms or money market mortgages.

Tip

In our article "What you need to know about mortgages before buying a house"we explain all mortgage models with their main advantages and disadvantages.

Smart Houzy tools for financing negotiations

Woman signs a mortgage contract
Once you have won the bid, you need to finalise the financing and sign the mortgage contract.


Step 11: Sign purchase contract

If you have won the bid, the deal still has to be closed. Property purchase contracts must be notarised. The notary's office draws up a draft contract or preliminary contract. The seller and buyer usually have two weeks to check this draft. It makes sense to leave this to a lawyer. As soon as the preliminary contract is OK for you and for the seller, arrange a joint appointment at the notary's office for the signing of the contract.

Step 12: Purchase contract, deed of debt and land register entry

The notary's office prepares the signing of the contract, the execution of the deed of debt and the entry in the land register. Because you do not have to pay the purchase price until after the land register entry, the seller needs security. As proof of your willingness to pay, you can submit an irrevocable bank guarantee that payment will be triggered as soon as the change of ownership is registered. Your bank will transfer the purchase price once the contract has been signed, certified by the notary's office and entered in the land register. With the entry, the purchase is completed and the house or flat is yours.

Good to know

As the buyer, you pay half of the notary fees, the transfer of ownership tax if it is levied in your canton, the land registry fees and the fees for the deed of debt. The tax and the fees vary from canton to canton, the notary fees from notary to notary.

Tip

In the Houzy magazine you will constantly find new articles on the topics of Finance, House purchase, Real estate market and Condominium ownership.

Our innovative property search aggregates 90 percent of all property listings in Switzerland and enriches them with valuable additional information. Among other things, you can see at a glance how high we estimate the market value or the need for renovation, and you can compare mortgage offers for the property. This helps you find your dream house or flat more quickly. 

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