The Best Tips Before You Buy the Housing of Your Dreams.
Acquiring our home, or buying a car or finding a new job or looking for the best school for our children are situations that we do not normally consider until it really is time to take the plunge. But what happens when we have to face these decisions?
It is normal that on these occasions we feel lost in the absence of information or, on the contrary, exceeded by the volume of documents and data to be collected and understood. Having prior information is vital to help us make the purchase of our future home as simple as possible.
Aware of the headaches that can cause to buy a new property here you have all the steps of the purchase process that you have to take into account.
1. Find out What Is Your Maximum Price Before Starting the Search.
THIS IS THE FIRST THING YOU MUST DO , knowing how much you can spend, because if the numbers according to your financial capacity say that you can only access a house of € 80,000, do not waste your time visiting real estate that has a price higher than this amount.
As a starting point it is necessary to know the maximum amount that you can allocate to the purchase. The next question is: how can I calculate the “ideal monthly payment”?
I recommend that the amount you allocate to this purchase does not exceed 35-40% of your stable monthly net income. In addition to this calculation, it is important to consider the money saved in case you have it. Keep in mind that banks in most cases will only leave you 80% of the appraisal price, so the other 20% has to be money FROM YOUR POCKET, that is, money saved.
2. How Will You Pay It?
Once you know what budget you have, it is time to decide how you pay for the new property. In this sense there are different options:
The cash payment represents the total outlay of the price agreed with the seller; normally it is materialized by the delivery of a bank check in favor of the seller simultaneously to the signature of the deed of purchase before a notary.
The mortgage loan is a bank product that allows you to receive an amount of money for the purchase of a property. All loans normally have as a specific guarantee the acquired home itself, but you must know that in addition to the above, the loan is also responsible for the present and future assets of the debtor.
Depending on the age of the buyer and other circumstances, there are financial institutions that offer more or less long repayment terms; it’s all about negotiating the best for you.
The mortgage subrogation consists in the change of ownership of the debtor in the mortgage, positioning the new debtor in the same rights and obligations as the previous one. It is very convenient for the creditor to accept the subrogation prior to the purchase, so you will have to request it in the same entity that the seller maintains the mortgage of the home you are going to acquire. Surrogacy has the advantage of saving fiscal costs with respect to the constitution of a new mortgage, but it has the disadvantage that the amount, economic conditions and repayment terms of the mortgage are already fixed and may not be adapted to your needs; In this case, you must expose your credit institution to your needs to negotiate an extension of the loan amount, or to modify the economic conditions, or to increase the repayment terms, or all at once. At the time of formalizing the deed of purchase with subrogation, what is called a deed of novation of the loan will be implemented in which the modifications to the original mortgage loan that have been agreed with the bank will be included.
At this point you should talk to your bank and also assess the term in which you want to repay the loan, since, in the longer term; the monthly installment will be more adjusted, although logically the final interest charge increases.
You can use the simulators available on the websites of financial institutions or request a study at your branch. However, before deciding, it is important to have different offers of banking entities, in order to assess the economic conditions they offer, as well as the related products that in some cases the entities request (payroll, insurance, direct debits …) so that they can apply more advantageous conditions.
3. Until You Already Know How Much You Can Spend, the Search for Your New Home Begins
Once you know your budget, the search for housing begins. What type of housing are you looking for? New, second-hand, free or protected housing… Next, we share a brief explanation of the characteristics and advantages of each of them.
New housing: they are new construction homes that have not been transmitted to third parties since their construction; they are also called first-transmission housing. Your purchase tax will normally be VAT.
Second-hand housing: these are those houses that have already been transmitted at some time. Normally they will be homes that have already been inhabited, so it will be necessary to pay special attention to the state in which they are located and the work to be carried out in case it is necessary; However, within the real estate offer of second-hand homes you can find homes of banks and private individuals that although they are not first transmission, they are really brand new homes since they have never been inhabited. Their taxation will normally be by ITP / AJD.
Protected housing: it is one that has a more affordable price than the existing one in the market and that is destined to the population sectors that present greater difficulties to be able to access a home. This type of property has economic and fiscal advantages and to access them, a series of personal and / or economic requirements must be met. They also usually entail obligations and limitations that you should know in each specific case.
In addition to the type of property, the location will also be decisive in making the decision. Depending on your needs, it will be necessary to know the infrastructure that the neighborhood has: hospitals, shops, schools, supermarkets, public transport, green areas…
4. Who Are You Going to Buy
If you have decided on the location of your future home and have an indicative price, your searches will be much more productive. It is important to keep in mind that the negotiation and facilities when buying a house are conditioned by the type of seller you choose.
Individuals: It allows you to interact directly with the person who sells the home so the negotiations are more direct and quick, although there is the inconvenience that you are not advised by professionals and may arise unwanted technical and legal problems. When dealing with second-hand homes, we must pay attention to the state and conservation of the same.
Real Estate Agencies: Having the help of a real estate advisor who accompanies you, advises and advises during the entire purchase process can be very useful, since they will show you those properties that best fit your needs and budget, while solving all your technical concerns , financial, and legal.
Promoters: Acquiring a property directly from a developer guarantees you the facilities of living in a newly built house, although you will have to keep in mind that, on occasion, the choice of housing will have to be made on the plan and this can make the final choice difficult. Keep in mind that every work under construction, and more if purchased on a plane, has some degree of uncertainty as to its correct completion depending on different factors. You can ask the promoter to provide guarantees to your satisfaction if you have to deliver amounts on account before writing.
Banks: People who decide to buy a flat owned by a bank can take advantage of many advantages and preferential conditions in mortgage loans.
5. Touch Visit the Housing.
When you have selected the home you want, the visit will be key, in a few minutes you will have to inspect the property and imagine living in it. During your visit, take a notebook with you to take notes, a meter to do checks and the camera or mobile phone to photograph those aspects that attract your attention. What do you have to look at? Observe the distribution of the rooms, orientation of the house, the ventilation of the bathrooms and kitchen, the enclosures, the state of the electrical installation, painting, the arrangement of the partitions and doors, nearby businesses, the noise … Take this moment to Ask for the energy certificate.
Ask the neighbors. Who better than your future neighbors to inform you about life in the community? The owners are the ones who best know the conditions of the property; they can also update you on the payments of the community and inform you of the existence or not of possible spills. Take advantage of your visit to the house to chat with them, get information and, why not, make new friends.
6. Make an Adequate Offer
When it is time to position yourself as an apartment buyer, it is time to make an offer. Depending on the Autonomous Community, potential buyers request discounts ranging from 10% to 30% of the initial sale price, although in certain urban areas of large capitals the discount margin is practically testimonial.
Go to the property registry: Once you are clear that that house you have visited is your choice, it is important to know the inscribed data related to the description of the property -which must be adjusted to what you have visited, since the physical reality may be different from the description register, check the ownership and the charges that may weigh on the property to avoid last-minute surprises. To know such circumstances you must go to the property registry in which the property is registered and request a simple note. This type of information can be requested by us, the seller or a real estate consultant. The price varies depending on the urgency and the manager who makes the request, ranges between 9 usd and 20 usd.
Confirm that the bank grants you the mortgage. Although it is difficult for the bank to pronounce on the granting of the mortgage without having all the information, try as far as possible not to advance money until they confirm the viability of the mortgage loan requested.
Inspect the home again: It does not hurt to make a second visit to the house to answer possible doubts that have arisen and confirm that it is our future home before formalizing the purchase process. In addition, if another person can accompany you, the visit will be more productive and you can count on a more objective second opinion.
7. The Arras Contract
This document is the first contract that is usually signed and is just as important as the deeds of the house as it tries to safeguard the rights of both the buyer and the seller. When signing the contract, the seller is usually advanced up to 10% of the price of the home. You have to keep in mind that when you sign the contract you are assuming some rights for the delivery of the house but also some obligations, whose non-observance could ultimately lead to the loss of the money delivered.
Therefore, it is important, among other things, that the deadline to formalize the purchase and sale to be indicated in the earning contract is realistic (around 30/60 days from the date of signing the earning contract) as if You have to apply for the mortgage loan, the bank will have to carry out some preliminary procedures (appraise the home, request internal authorization…) that takes a few days.
8. Sign the Writing
In this process, the seller and buyer declare before their notary their willingness to buy and sell, as well as the essential conditions of the sale. The buyer, in general, has the right to choose the notary. In addition, in the act of signing the notary checks the capacity and legitimacy of both parties. In addition to the above, the deed must include the description of the property, its state of charges, the agreed price, the payment method, the applicable tax, and the distribution of expenses.
9. Other Expenses to Take into Account
Many times the buyers obviate the expenses derived from the purchase of the house and it is an important disbursement since the price of the house must add between 10% and 12% of the purchase price.
The main expenses are:
Taxes derived from the purchase such as ITP and VAT.
The purchase of a new first transmission home is subject to the payment of VAT, 10%.
The acquisition of a second-hand home does not have to pay VAT but the Property Transfer Tax (ITP), whose percentage varies depending on each province and / or community.
Municipal Goodwill, also called Municipal Tax on the Increase of Value of Urban Nature Lands (IIVTNU). It is a direct tax, established by the municipalities, who are responsible for its management. In any case, unless otherwise agreed to be included in the deed, this tax must be paid by the seller.
Notarial charges: Notary fees are derived from the preparation of the deed. Normally it is agreed that they be assumed by the buyer.
Registration fees in the Property Registry: It is the administrative institution responsible for giving official publicity to the property on real estate, as well as the rights and charges that they may have.
Keep in mind that if you request financing through a mortgage loan you will have to add to the above the expenses and taxes necessary for the constitution of the same, whose approximate amounts will be provided by the financial institution itself.
These expenses are: Notary fees for the preparation of the mortgage deed, registration in the Registry, prosecutors (Tax of Legal Acts Documented by the constitution of the mortgage) and fees of the agency in charge of processing the documents. If you do not need financing for the purchase, you have time and a little patience you can avoid these expenses, taking the documents directly to the Treasury and the Registry.
Finally, you have to consider whether or not there are other expenses or products related to the mortgage, such as home insurance, life insurance, loan opening fees.
And you will have to see if the house needs REFORMS, because if so, the purchase price could be different when making your offer to the owner. Consider the approximate cost of how much these works would amount to.
10. Do not forget to change the ownership of supplies
You are already the owner of your new home! Do not forget to appear as such in the supplies that affect the house. You must also keep all documents, supporting documents and invoices related to the acquisition in a folder, you never know when you may need them.
And of course… Don’t forget to pick up the keys. Now: Enjoy decorating to your liking, what will be your new home!
Read more here: we buy houses company in Houston, TX