Most of us only buy a house once in our lives. That is why we have compiled the "Checklist for house purchase". In this checklist you will find a step-by-step list of what you should know or consider before buying a house or flat. In this article we go into more detail on individual points and explain the background. So that you can find your dream home quickly instead of searching for a long time.
Buying a house is probably the biggest investment in your life. That's why you should be clear about what you really need. The more clearly you define your needs, the easier the search will be. Don't let yourself be influenced by others or trends, and set as many criteria as possible. You can always make concessions. In our "Checklist for House Purchase" we have divided the needs (point 1) into the sections "Basic", "Object" and "Location". Go through all three sections point by point and answer each question. The answers will help you later when deciding for or against a house or flat.
As soon as you have defined your needs, you should think about financing (point 2 of the checklist). Specifically, this concerns the loan-to-value ratio and affordability. You need to raise 20 percent equity capital so that an investment foundation, bank or pension fund can finance your dream home with a first mortgage (up to 65 percent) and possibly a second mortgage (the rest up to 80 percent). You must also be able to afford home ownership: The housing costs (imputed mortgage interest, amortisation and ancillary costs) may not exceed 35 percent of your gross household income. It makes sense to clarify now with your bank what is feasible and affordable.
The more precisely you have defined your housing needs (step 1) and know your financial scope (step 2), the better you can narrow down your search. On all online property portals, you can define search parameters such as location and region, type, size, age and expansion, as well as an upper purchase price limit or range. You can view all the search results online and, if a property interests you, contact the seller and arrange a first viewing. You can also take out free search subscriptions with most portals and be automatically notified as soon as new offers meet your search parameters.
Visit and compare several houses. Listen to your head and your gut during the first viewing: Does the floor plan fit? Are the rooms big enough? Do you like the finishes? What kind of impression does the neighbourhood make? Do you and your family want to live here? If you answered "yes" to these questions, you should arrange a second viewing and check whether the house is really your dream home. Check the building fabric, with a specialist if necessary, and look out for details that you might have overlooked the first time around. Take a walk through the neighbourhood, talk to neighbours and ask the building authority about building projects in the near surroundings.
If you are convinced and seriously interested, you should get down to business and arrange the financing with your bank (or an investment foundation or pension fund). For the basic mortgage loan approval, you must submit a complete dossier with many documents to your bank (see point 4.1 of the "Checklist for House Purchase"). On this basis, the bank estimates the market value. Banks lend according to the lowest value principle. For example, if the purchase price is 1.2 million Swiss francs but the market value is 1 million Swiss francs, the bank will lend the market value. If your bank is willing to finance the residential property, it confirms that it can be financed in principle.
As soon as you have the financing confirmation in your pocket, you should declare your purchase interest. The best way to do this is with a short letter. Explain factually why you want to buy the house and introduce yourself and your family. Your enthusiasm should shine through. Selling a house is emotional for many people, especially if they have lived in it for a long time - sympathy points can make the difference between acceptance and rejection. And if you enclose the financing confirmation from the bank, the seller knows that you are really serious and that the financing is secured. For many, this is a decisive argument for acceptance of the bid.
Have you won the bid? Congratulations! Now you have to arrange the financing definitively. When choosing a mortgage, pay attention to the model (fixed mortgage with a fixed term and fixed interest rate or flexible SARON mortgage), term and interest rate. As a rule, it makes sense to split the financing into two or three tranches. This optimises the interest burden. In addition, you spread the interest rate risk better because only one tranche has to be renewed instead of the entire mortgage amount falling due at the same time. As soon as the financing has been secured and the mortgage contract has been signed, you and the seller can have the purchase contract drawn up.
The sales contract concludes the trade. This can be quite complex. In section 4.2 of our "Checklist for House Purchase" we have listed what should at least be regulated in the purchase contract. The notary's office draws up a draft contract, which the seller and buyer revise and adjust until it is right for both parties. Make sure that, despite the changes, everything is legally correct and nothing is missing. As soon as the purchase contract is in order for you and for the seller, make an appointment at the notary's office for the signing of the contract.
The notary's office prepares everything for the signing of the contract, the execution of the borrower's note and the entry in the land register. The borrower's note contains the lien and serves as security for the bank that finances the house purchase should you fail to meet your financial obligations. As a rule, the parties agree that the purchase price will be transferred as soon as the contract has been signed by the buyer and seller, certified by the notary's office and entered in the land register. With the land register entry, the purchase is completed and the deal is legally binding - your dream house is now yours!