May 11, 2023, 8:58 am | Read time: 4 minutes
Buying real estate is likely the most profound investment in our lives and requires careful consideration. Our series “The Path to Homeownership” accompanies this exciting journey. This article focuses on making the right decision.
The time has come. The decision to purchase the desired property has been made. Now it’s time to execute the purchase. There are several points to consider during this process. Important questions that arise at this stage of property acquisition and the corresponding answers are provided by myHOMEBOOK author and real estate agent Christopher Hnida, who helps in making the right decision for the respective property.
1. What risk can I take?
Financing is a key topic here. As mentioned in previous articles in our series, multiple financing options should be obtained, preferably from an independent broker. Now it’s about deciding the level of risk with which the property should be financed.
This means not only checking if the monthly payment comfortably fits into the household budget. More importantly, you should determine how long the bank guarantees an interest rate and whether it is clear what happens, for example, in 10 years when the interest rate lock expires. At that point, the remaining debt may need to be refinanced under new conditions. This point is crucial and should be carefully considered to ensure the property remains yours.
2. What purchase options are available?
The decision on purchase options is now final. Will you buy the property alone or together with your partner? It is often much more attractive to purchase the property as a couple because the financing terms are better. Typically, each party buys half. However, other divisions are possible depending on the financial contribution of each party.
3. How can I protect myself?
The purchase contract ensures that the property you buy truly becomes yours, both legally and practically, by handing you the keys. Typically, the contract outlines the conditions for the purchase price, securing you as the buyer and your claim to ownership. Only after these conditions are met do you pay the purchase price. Nowadays, this is usually paid directly to the seller, rather than into an escrow account as was common a few years ago.
Once the purchase price is paid, the actual transfer of the property takes place, and you can move in (or rent it out). This is referred to as the “transfer of benefits and burdens,” which aptly describes the process. You become the legal owner of the property with the entry in the land register, which usually occurs several weeks or even months after this “transfer of benefits and burdens.”
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4. Where can I get help?
If a real estate agent is involved, they can answer your questions and explain the processes that are now taking place. The notary, who is always involved due to the requirement for notarization of the purchase contract, can also explain the sometimes cryptic language in the contract. The notary is responsible for ensuring that everyone at the table understands what they are doing.
Conclusion
When buying real estate, many factors must be considered to secure the purchase, obtain expert help, and find the best terms. An experienced lawyer or notary can assist with legal protection, a real estate agent with finding a suitable property, a bank or financial advisor with financing, and comparing various offers to decide on the best terms.
More articles from “The Path to Homeownership”: