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Cost trap buying a house: 5 expensive mistakes
Cost trap buying a house: 5 expensive mistakes
Video: Cost trap buying a house: 5 expensive mistakes
Video: Barbara Corcoran: First Time Home Buyers' Most Common Mistakes 2023, February
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You have finally found your dream home, at first glance everything fits. And the icing on the cake: soon you can even go to work by bike. But before you let yourself be tempted and immediately sign the purchase contract, you should take a second look - and check out the five most common mistakes in buying a house. We can help you with that.

Table of contents Table of contents Cost trap buying a house: How to avoid 5 expensive mistakes

  • Error 1: The need for renovation was incorrectly assessed
  • Mistake 2: Living environment poorly researched
  • Mistake 3: Unapproved attachments
  • Mistake 4: Overestimation of your own contribution
  • Mistake 5: Loan with a low repayment rate

Table of contents Table of contents Cost trap buying a house: How to avoid 5 expensive mistakes

  • Error 1: The need for renovation was incorrectly assessed
  • Mistake 2: Living environment poorly researched
  • Mistake 3: Unapproved attachments
  • Mistake 4: Overestimation of your own contribution
  • Mistake 5: Loan with a low repayment rate

Clever real estate agents know exactly how to convince their customers. Because those who have been browsing the market for the perfect four walls for a few months are slowly but surely starting to despair. In other words, you don't pay close attention at one point or another, make more and more compromises and easily maneuver into the predicament that your new home will become a very expensive bottomless pit. So before you sign the sales contract, read the following checklist carefully.

Error 1: The need for refurbishment was wrong

Hui in the front and pooh in the back - this can happen to you not only in old buildings, but also in much younger houses. Experts advise, of course, not to be deterred from buying a property by a bright green wall, but to take a closer look at the wall. Maybe someone is trying to cover up something? Are there water or mold stains? Is the wall damp?

Take a good look at the big things too: heating, basement, roof and roof insulation, electrics, flooring, windows, pipes. If you are not sure about something, ask the Chamber of Crafts for a building expert to take a look around. The bottom line is that an expert will cost you less than four weeks in a hotel with sacks and bags because the roof is covered after the first autumn storm.

If you buy a relatively new property, ask the previous owner which products may even have a guarantee. If there is a problem with the windows or the heater to fix, it only costs you a call to the manufacturer. If a house renovation is pending, you can often push the purchase price enormously. Do not let the butter take your bread off these negotiations - assert your interests and send the previous owner's list of defects to your building inspector if in doubt.

Renovierung der Fassade
Renovierung der Fassade

If the house needs major renovations, you can press the purchase price.

Photo: iStock / Lex20

Mistake 2: Living environment poorly researched

If you simply draw a circle around the preferred residential area with your finger on the display of your iPad and never deal with the residential area on site, you can experience nasty surprises. Take the time to explore your future living environment closely - especially if you are new to the city. Of course it is nice to live on the river - but how often are there floods? What does elementary insurance cost in return - or does the insurance with this address not even accept you? Check out the local press: is the neighborhood safe? Was there perhaps a vote in the local council meeting on an adjacent industrial park? Are there any other construction projects that will impair the value of the property for a long time - a motorway feeder, an expressway?

If many apartments in a zone come onto the market at once, something is wrong. Because that means that many people want to leave there - why do you want to move there? Or, very old school: sit down for an afternoon in the café on the square and watch not only the people, but also the traffic, listen around, start chatting with the service staff. Have perseverance. Incidentally, all of this also applies if you do not want to live in the property yourself but want to buy it as an investment. In this case, also think about what potential tenants need. Are there any good schools in the neighborhood? Are there enough daycare places? Is there a tram stop around the corner? If not, you might prefer to invest in a small, centrally located apartment that you rent to a single.

Mistake 3: Unapproved attachments

Was the conservatory part of the original project or was it added later? Is the garage too close to the neighboring property? Can you extend the roof in this building area or even increase it? Is it okay if there is a garden shed behind the house - and if so, how big can it be? Each building area has its own rules, which ideally stipulate the development plan. If there is none, the decision as to what is allowed rests with the building authority. So have the permits shown before you buy - for everything that later becomes your property. If in doubt, inquire at the responsible building authority, i.e. in the town hall or at the district office. If the papers are not in order, you will have problems afterwards and not the seller.

The same applies to the purchase of apartments: balconies are just too happy to be converted into a loggia - and no one thought that you would need a permit. Should this ever be noticed, you bear the costs for the failures of the previous owners.

Wintergarten
Wintergarten

As chic as a winter garden is - it needs a building permit. Be sure to let them show you before you buy your house, to avoid falling into a cost trap.

Photo: iStock / monkeybusinessimages

Mistake 4: Overestimation of your own contribution

Your to-do list not only includes laying the screed, but also sanding and painting the plastic windows and you, as a self-proclaimed do-it-yourself expert, can also sand down and polish the old wooden floors? And all in three months, because then the second child is coming? Then the cats also have to go to the vet very urgently and you have no more money to pay the installer for the new toilet - so connecting the ceramics also becomes your project. Stop - you will never be happy in your new home, because self-overestimation of your own work has broken many relationships.

The problem must be avoided from the start: Even before you buy the property, you have to be honest with yourself and realistically assess what you can do yourself in view of your time budget and your manual skills - the former owner doesn't care. If you have a lot to do yourself in a short time due to a limited budget or a tight schedule to save yourself money, ask friends, colleagues and family for help. With guidance, anyone who doesn't have two left hands can help a bit. And if you are not very skilled in craftsmanship, you might cook a delicious lunch for the others, take care of the children, or clean the new windows before the curtains are hung up. Demand all the favors that you still have open with your soccer buddies - the prospect of a cozy barbecue evening will certainly make one or the other swing the brush faster.

gestresster Heimwerker
gestresster Heimwerker

Don't overdo yourself. If you want to do a lot of work in-house on your own, then it takes time.

Photo: iStock / ajr_images

Mistake 5: Loan with a low repayment rate

Low interest rates and enterprising banks may tempt you to take out large loans, spend a lot of money, and then repay the amount with a low annual repayment rate of just one percent. At first glance, this may sound like good business to some people, but in the end it is an unnecessarily lengthy burden. The basic rule is: repay as much as possible, because this will keep your capital costs - the interest - low. Experts warn against repaying, for example, a € 500, 000 loan at an interest rate of 1.4 percent with only € 1, 000 a month. If everything went well, you would be done with it after 61 years - however, with such long terms, hardly a bank should play along. So you have a multiple debt rescheduling risk. In addition, a fixed interest period of 25 years and longer is the exception - most banks guarantee a maximum of 15 years. And expensive on top of that, because the interest rate risk must be paid with correspondingly higher loan interest rates over the entire term.

From the outset, professionals therefore recommend that initial repayment rates of two to three percent be agreed and that at least 15 percent of the required loan amount should be made as equity. If you want to use the property as a pension and maybe only buy at the age of 40, you should even agree on four percent initial repayment. Initially, because the repayment portion of the classic annuity loan increases with every installment. This is due to the fact that the loan amount to be interest is slowly becoming smaller, and with it the interest portion of the fixed monthly installments. Also make sure that you can make special repayments regularly and free of charge, and maybe even increase the monthly installments at contractually agreed times in favor of faster repayment. Then there is nothing standing in the way of successful home financing.

Sabrina Deckert

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