The 5 most important factors for a property search | key4.ch

The 5 most important factors for a property search

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13.01.2021 | 5 minutes

Your own house and garden, designed according to your personal wishes and ideas: this is a dream shared by many people. Whether you want to live close to the city or in the middle of nature, your choice of home must be well thought out.

Serious financial planning is essential when preparing to buy real estate. It is equally important to take a close look at your desired property and future place of residence. The following five points should be on every home buyer’s checklist:

1. Property location

Many people think this is first and foremost a matter of personal inclination: a short commute or proximity to family. While preferences of this kind are not insignificant when buying a home, many other factors put property location at the top of the list of criteria. After all, it determines the purchase price – and its future development – to a considerable extent. That’s why it’s so important to inform yourself in detail about the location, the infrastructure and the neighborhood or surrounding area before making a decision:

Infrastructure

Anyone who examines property details, monitors real estate listings and studies sales particulars will find that a fundamental distinction is made between the macro-location and micro-location, i.e. the spatial environment in the broader and narrower sense. When it comes to the macro-location, the city’s infrastructure is crucial: are there stores, schools, doctors, restaurants and recreational facilities available locally? How good are the local or public transportation connections?

The following points are often taken as key criteria for determining the macro-location:

  • Population structure
  • Economic development, industries
  • Public institutions (offices, courts, administrations, etc.)
  • Transportation infrastructure and connections (airport, rail, roads, etc.)

The focus is therefore on economic and structural aspects. The macro-situation covers the bigger picture: the region, the canton, the city or the district. The quality of the infrastructure and hence the attractiveness of the region is vital for determining the price of the property.

If you are looking for an investment property, you can focus on objective criteria that influence the value of the property. When buying your own home, on the other hand, the macro-location is often based on subjective criteria such as proximity to the workplace.

Neighborhood

The micro-location describes the direct surroundings of a property, i.e. the immediate neighborhood: what population groups live in the area? Is it a quiet or lively area? Is there a bus stop right outside the door, or will you need a car?

The following points are usually relevant for the micro-location:

  • Noise influences
  • House condition
  • Shopping facilities and provision of services (doctors, schools, etc.)
  • Public transportation and road access
  • Distance from the city or town center
  • Leisure and recreational opportunities
  • Social status

2. The municipality as a location factor

The municipality the property is situated in has an impact on the taxes you will have to pay. Local factors also affect the property value and future price development.

Taxes

Generally, all taxes related to a property are paid to the canton or municipality in which it is located.

These include:

  • income tax
  • property tax
  • real estate gains tax on the sale of a property
  • real estate transfer tax, which is due even without a sale if you inherit (receive) or give away a property
  • real estate tax, which depends on the market value of the property

The complexities of tax legislation can quickly become confusing, so it’s advisable to seek advice from a professional. Click here for an overview of potential tax deductions in connection with home ownership.

A lake and a church with a pointed tower can be seen in front of a mountain panorama.
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3. Assess renovation needs

Another important question to answer before buying a property is: what condition is the house in? Especially when acquiring an older property, you should think about the costs of renovation early on. Tax savings are possible thanks to modernization measures.

The following tips will help you to assess the renovation requirements of the property:

Tip 1: stay realistic

With a little paint here and some new flooring there, you will be able to transform a tumbledown property into your dream home. At least this is the impression given by various TV shows. But renovation is not quite that simple. And in the worst-case scenario, you will not only exceed your budget, but also delay the move-in date.

That’s why it’s worth visiting a property with a cool head. Don’t underestimate the work involved and above all, don’t let yourself be blinded by appearances. This is true in both a positive and negative sense: always ask yourself if you could be losing interest in a property simply because you are bothered by minor “cosmetic” details such as the wall color, decorating style or landscaping, or whether you are allowing yourself to become distracted from genuine shortcomings by perfect visual staging.

Tip 2: uncover any hidden renovation needs

In addition to obvious defects such as the condition of the facade, windows and floor, there are usually some virtually invisible traps lurking in most properties. There could be a latent need for modernization in the following areas:

  • Heating system
  • Moisture damage
  • Heating, ventilation, air conditioning etc. (electricity and plumbing)
  • Thermal insulation

Especially when it comes to thermal insulation, you can do your share of research: the incidental expenses give an indication of the energy status of a house, for example. Likewise, documents about any renovations carried out by the current owner provide a certain amount of key data on the condition of the property. This information can be requested from the seller.

Tip 3: call in experts and draw up an inventory

If you’ve lost your heart to an older property, you won’t be able to avoid comprehensive modernization, or perhaps rehabilitation. But more recent properties generally require renovation too. Even if you follow tip 2 and investigate potential defects yourself, it’s not easy for a layman to evaluate the resulting renovation costs and the work involved. To get a reliable result, it makes sense to seek advice from an expert, be it an architect, a construction manager or a real estate consultant.

In order to maintain an overview, it’s a good idea to draw up an inventory of the current state of the property with the help of the expert. Make a note alongside each component if and when it will need replacing. You should also ask an expert to estimate the cost of each measure and specify it on your list.

This estimate will also allow you to plan the annual reserves, which must cover the cost of any work that arises.

4. Purchase price and financial viability

Before taking out a mortgage, there are some important questions to answer about financing the property: what is your current financial situation? How much equity do you have available? What about affordability? What type of mortgage is suitable? And finally: is the offer price within your range?

When you first start searching for property, however, the one vital question is: what can I afford? The answer: the maximum cost of a new home depends on the income of the prospective buyers – and on how much money they can invest from their savings. Our purchase price calculator will give you an idea of the purchase price you can afford in your current financial situation.

The key4 mortgage calculator is another useful tool. It calculates the approximate monthly mortgage costs, taking into account the purchase price, equity and gross income, giving an idea of what to expect for different purchase prices.

A balcony and neighboring house are visible from an unclad converted attic.
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5. Have your dossier ready

Attractive properties are in short supply and, given the large number of interested parties, your offer for your dream house won’t necessarily be accepted. Consequently, an essential question for buyers is: how do I improve my chances of obtaining a purchase contract? One method is to prepare your financing documents in advance.

These documents can be requested beforehand. This means you won’t lose valuable time when submitting your mortgage application, which could prevent another prospective buyer from beating you to it.

Documents can be useful even when arranging an initial viewing appointment. Sellers and real estate agents appreciate it when prospective buyers can produce a financing certificate. This indicates whether potential customers can, in principle, afford their desired property – in the opinion of a financing partner. At key4, you can easily have a financing certificate issued digitally within one business day. This will enable you to emphasize the seriousness of your interest right from the start.

Speed and the right preparation are also assets in the next step: the mortgage application. Before granting a mortgage, all banks and insurance companies are required by law to examine each loan application specifically and comprehensively. In addition to full documentation about the property, the mortgage dossier also includes credit assessment documents:

  • Your last tax return
  • Your current salary statement incl. bonus information for the last three years
  • Details of the composition of equity
  • Your current debt collection statement
  • A list of expenses for fixed financial obligations (e.g. costs of main and/or second home, leasing, alimony, etc.)
  • Pension assets (pension fund statement, vested benefits accounts, pillar 3, life/death risk insurance policies)
  • Valid official ID
  • For self-employed persons: financial statements / balance sheets from the last three years

These documents can be requested beforehand. This means you won’t lose valuable time when submitting your mortgage application, which could prevent another prospective buyer from beating you to it.

Conclusion: good preparation is the key to success

Buying your own home is a big investment. This makes it all the more important to take a close look at your desired property and your future place of residence. The factors listed above represent a guide so that you will know what to pay special attention to and how to prepare. Because narrowing down your search not only saves valuable time and nerves, but also costs.


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