Buying real estate is a long-term endeavour, which requires a lot of patience, method and an accumulation of procedures. But it is worth it! If you are a first-time buyer and don’t know where to start, then this guide will teach you everything you need to know before embarking on this real estate marathon, in eight steps.
Evaluate your budget
Many online simulators allow you to calculate your repayment capacities, according to your income, your expenses, and your current debt ratio. In relation to these capacities, set a ceiling not to be exceeded for your purchase, without forgetting to include your real estate agent’s commission, the amount of the notary fees, not to mention the costs of moving into a new place.
Find the good agent
For the search for your accommodation, you have the choice: to scour the sites from online or newspaper advertisements or get in touch with a real estate agency. This second option allows you to save time: the real estate agent can offer you a large number of accommodations (especially since many agencies work in a network with colleagues and “pool” their offers). He knows the local market well and can price accurately, moderating the exaggerated claims of some sellers. Finally, he checks the market for potential properties and carries out the diagnostics and establishes the certificates of conformity, checks that the title deeds are in order, clearly indicates the amount of charges, housing and property taxes. He will then be able to advise you on the financial arrangement of the project.
Start the negotiations
After looking at countless properties, you have finally landed on a property for sale, which meets all your expectations, then you or your real estate agent on your behalf can start the purchase process, which involves your usual haggling and agreeing on the price on which both parties can agree.
Get your loan offer
Now that you know the amount you owe to the seller you will do one of two things. If you are rich and have considerable assets, then simply transfer the money via bank and get the house deed signed and if you are one of the ordinary folks like us, who has a good social standing but not enough money, you will get a bank loan.
During a first meeting at the bank, your financial advisor will study your profile (family situation, income, savings capacity, professional stability, seniority, current loans, real estate, etc.) depending on your income; several advantageous loans can be granted to you (zero-rate loans, the 1% loan, the social home loan etc).
To save time and obtain the best conditions, you can contact a broker: in recent years, they have multiplied, boosted by new possibilities to renegotiate your credit and insurance at any time. This will tell you straight away if your file holds up; then, he will canvass for you all the banks with which he is a partner, in order to obtain the best rate for you; but he will also take care of everything, put together your loan offer, and accompany you until the signing.
To prepare your file, the broker - or your bank branch - will generally ask you for a whole series of documents like:
- national identity card or residence card, proof of address
- family record book, marriage contract etc
- last tax notice, recent payslips with proof of the date of entry
- proof of other income (savings, property income, leases)
- last three bank statements
- proof of any other credits in the course
- title deeds if you already own another real estate
Once the bank gets all the documents and is satisfied with your loan application, it sends you a loan offer summarizing the conditions of the contract (nature of the loan, total cost, overall effective rate, etc.). From the reception of this letter, you have a cooling-off period of few days to accept or refuse the terms of the loan. If you have accepted the offer then we head to the next step of the process.
Sign before a notary
Between obtaining the loan agreement from the bank and the steps taken by the notary, who collects from the administrations the information and documents necessary to constitute the sale file (civil status certificates, mortgage statement, town planning file, technical diagnosis, trustee questionnaire, etc.) it takes few weeks or even a month or so before you can finally sign in front of a notary the official deed which makes you become the owner. Depending on where you live, your contract will include:
Your marital status, the address of the accommodation, its surface area, a description of all the rooms and furniture possibly sold, the easements, the presence or absence of mortgage on the property sold; the name of the penultimate owner and the notary office concerned, the date scheduled for entry into the premises, the price and the terms of payment.
You then pay the balance of the purchase price as well as the notary fees, broker’s commission (fees, taxes collected for the State, mortgage or surety fees for your loan).
Here are the keys!
They are finally given to you, when signing at the notary are the house keys, as well as the certificates of ownership, which are very useful for your administrative procedures (water, gas, electricity, telephone, fire insurance, enrollment of children in school).
After your signature, the notary sends the deed of sale to the mortgage office for publication in the real estate file. In return, he will receive "an authentic copy", bearing the stamps of the tax administration, of your title deed: he will send you a copy, and keep the original. Usually, about a few weeks have passed since your first visit to the property… which is finally yours!
Congratulations, you are now a homeowner and all that is left is to move into your new home and start decorating it. But remember don’t go overboard when spending money on your house. Remember you still have a bank loan to pay. Slowly and gradually keep adding things to your house and it gives it your own touch.