Real estate is in great demand for a long time.Those who carefully examine, will still find attractive and affordable objects.But not every purchase is a goldmine. Twelve criteria must be checked before the signature is placed.
The word real estate comes from the Latin word “immobilis”, which means immovable.For years, this was also true for the prices of houses and apartments, which stagnated.But now movement has come on the market, because in times of the euro crisis concrete gold is considered more than ever as a stable alternative to cash.
Germans are still particularly interested in their own four walls.According to a survey from last year, more than a third of Germans dream of their own home or have already planned their purchase.But who wants to invest in a property, often faces a mountain of questions.Even the search for a suitable object is difficult and tedious, few can estimate whether the price of an offer is realistic or excessively overpriced.Even real estate buyers who want to rent, are often uncertain: Only if the object and environment are right, can achieve an attractive return.
Euphoria is there a bad adviser.On the other hand, those who carefully examine, explore the market and the situation and do not put themselves under pressure will still find attractive offers.The joy of home ownership is then inclusive.
The test criteria: Avoiding risks
For most buyers, real estate is the biggest investment of their lives.It is all the more important to observe some basic rules.Often “dream house” or attractive apartment have hidden defects, and even in the complicated and extensive contracts may lurk some pitfall.But whoever checks carefully and can not be put under pressure avoids expensive mistakes and nasty surprises.
1. Paper is patient: do not trust only the prospectus
Under no circumstances should the prospective buyer buy an object that he only knows from the prospectus.Such glossy brochures are nice to look at – but sometimes they have little to do with the truth.The greater the disappointment then, when the new owner determines that the building is poor, the house is next to a busy street or an apartment can not be rented because of other serious shortcomings.Therefore: without personal inspection no purchase.If possible, the prospective customer should visit the object several times and at different times.For example, a weekend’s quiet street can turn into a noisy “highway” on weekdays or rush hour.
2. Brokers also have interests: Inquiries are worthwhile
A real estate agent is not a neutral adviser, but also has its own interests: He wants to sell, because only then he gets his commission.In case of doubt, he will not emphasize the disadvantages of a property and will rarely explicitly warn you about any defects.Therefore, healthy skepticism is appropriate when describing the benefits of a property in bright colors.The prospective buyer should specifically inquire about damages and defects and inquire several times in case of doubt.It can also be helpful to make inquiries with the neighbors or the municipal administration: there, for example, the interested party learns of any planned road or other construction measures.
3. The location counts: analyze the location of the object
The location of a property is one of the most important factors for the buyer: it decides on a possible increase in value, the leasing opportunities and the quality of living.Buyers should pay attention to the macro and micro location.Is the property in an economically prosperous region with good future prospects?Then you can expect further rising property prices.But also the infrastructure of the surrounding area is important: Are there enough schools, doctors, pharmacies and shops?What is the recreational value?What is the connection to public transport?Such information is not only important for self-users, but also increases the leasing opportunities.
4. Experts know more: turn on the expert
For used real estate applies as with cars: bought as seen.Only for maliciously concealed defects, the seller must be responsible – and bad faith can hardly be proven in practice.Therefore, the cost of an expert is usually a worthwhile investment.The expert examines the dream property and can also find hidden defects that remain hidden to the layman, such as inadequate seals in the basement or poorly insulated roofs.The cost of the check depends on the size of the object and the scope of the test.As a rule, 800 to 1500 euros are due, but are well spent in the face of the risk of expensive repairs.A publicly appointed and sworn expert is also liable if he has culpably overlooked defects.
5. Files make smart: Check documents and logs
When buying a property file study is helpful: So it should be clear what burdens are still on the object or whether rights of third parties are registered.Construction plans or invoices can provide important information about the condition of the property.For condominiums, the prospect should read the minutes of the owners’ meetings.”As many as possible,” advises Matthias Schwarzer, specialist lawyer for rental and condominium law from the law firms Weber, Schwarz and Schwarzer in Munich.The logs often give indications of imminent repairs or planned investments.Also important is the community order, because, according to lawyer Schwarzer, “the basis for all regulations in the community of owners”.For example, together with the declaration of division, it specifies in detail which areas are in special or joint ownership.
6. Hurry with awhile: do not pressurize
In no case may the buyer push for completion or be put under time pressure.Dubious providers like to argue with “other prospects who are just waiting to sign the contract,” or a “last opportunity.”But such a hasty purchase many re payers have regretted.Only after careful consideration of contracts and object should the buyer sign.Even if the certification in an appointment at a “midnight notary” – ie to take place at night or on weekends, mistrust is appropriate.Such practices are uncommon in legitimate businesses.
7. Worthwhile investment: check the rental situation
For solid rental income, the condition of a residential complex is crucial.It depends not only on the building fabric, but also on the relationship between the owners.If, for example, signs of frequent quarrels or even lawsuits are found in the minutes of the owners’ meeting, caution is required.If a number of flats in a plant are empty or want to sell more than one owner, this can be a sign of impending refurbishment or other expensive investment.Important: the maintenance reserve.Only when it is high, the risk of unforeseen special charges is low.Interested parties should also check which rents are realistically achievable.Information about the tenant structure in the facility or the tenant fluctuation helps.
8. Everything is regulated: check the purchase contract carefully
The purchase contract should only be signed if the buyer has really understood the meaning of individual passages.Important points are, for example, in addition to the purchase price and the object description, for example, regulations on damage that occur between inspection and handover, or liability for material defects.The seller must also be liable for the fact that the object is free of any previous encumbrances during the transfer; in the contract, if applicable, the takeover of furnishings should also be governed by a possible withdrawal or a reduction in the purchase price.Important: The buyer should be able to assign existing warranty claims and guarantees to contractors or craftsmen.Also the date of the reference skill as well as regulations for missed deadlines are relevant.
Since construction and real estate purchase contracts are usually very complicated, the layman is regularly overwhelmed.Who wants to make sure that no expensive traps are installed should have the contract checked by a specialist lawyer.
9. Neutral advice: notaries must inform
The buyer pays the notary – and may therefore select him.In any case, the buyer should read the contract carefully and thus not just start shortly before the appointment.He must not be afraid to punch the notary in unclear passages.The certified jury is obliged to explain clauses;he may not take a separate consultation fee for this service.However, the economic aspects of a real estate purchase are not part of the notarial advice.
10. Solid calculated: pay additional costs
Who plans the real estate financing, must be realistic and not allow additional costs.Thus, not only the purchase price is due for each real estate acquisition, but also notary and land registry fees as well as the land transfer tax or any brokerage commission.Depending on the federal state, the real estate transfer tax is between 3.5 and 5 percent of the purchase price, the brokerage costs vary regionally.As a rule of thumb: The additional costs make up five to 15 percent of the purchase price.
11. For all cases: budget financial reserves
Regardless of whether you are a new or used property: the owner must always expect unplanned expenses, for example for repairs or rectification of defects.And those who previously rented, as a real estate owner, even for the full oil tank or landscaping care.Such expenses quickly add up to hefty sums of money.Interested parties should always plan for the financing and buffer and reserve.This also applies to unforeseen private expenses, such as an illness or urgent purchases.
12. Clear conditions: also think of the rent deposit
Anyone who buys a rented apartment and wants to continue to rent it, should make sure that the seller also transfers the deposit deposited by the tenant, advises the Munich lawyer Matthias Schwarzer. Reason: The buyer accepts the existing lease and is therefore liable to the previous tenant as a new landlord for the deposit amount.If, for example, the old landlord has issued this security deposit or is it no longer available for other reasons, the new landlord must refund the tenant with the deposit from his own pocket.
Sooner or later, anyone interested in real estate faces this question: The desired object has been found – but is the price cheap, appropriate or excessive?What is the “dream offer” really worth?
The valuation of used real estate is regulated by law.There are three methods standardized: the comparison value method, the tangible value method and the income method.Usually, certified experts and appraisers use these methods to determine the traffic or market value of houses or apartments.This involves complex calculations that capture numerous value-increasing and decreasing factors.As a rule, it is also easier for the layman: the cornerstones of these procedures enable him to first orient and assess an offer.
► Comparison value method
The value of the offered object is determined by a comparison with similar ones.Put simply, what brought a house of similar equipment, design and size to the market?Experts like to rely on the data of the local expert committees, in order to obtain as detailed as possible values.Easier and faster, however, provides the prospective buyer with a first look at the internet: With real estate portals, he usually finds suitable comparative objects for the specific offer.
► Property value procedure
Essentially, this method deals with the question of what the new construction of a comparable object would cost.First, the property value and the building value of the used object are determined separately.From the value of the building and the facilities, an age discount can be made, which depends on year of construction, degree of renovation and remaining useful life, which is usually based on a total usage time of 80 years.Guideline for prospective customers: If 1.25 percent of the building’s value is deducted per year, the current time value or intrinsic value of the building results.
An example from the south of Munich: For a 20-year-old, detached house with 120 square meters of living space and a 500-square-meter plot (current price per square meter in the region 500 euros) requires the seller 480 000 €.According to an architect, the cost of a comparable new building would be around 300,000 euros.
Together, time and property value 422 500 euros, new construction costs and land value 550 000 euros.Now the prospective buyer has first clues to classify the offer.With 480 000 euros, the seller demands a relatively high price.But if it succeeds in downsizing it to about 450 000 euros, the object would certainly not be overpaid given the current booming demand in the region.Conversely, is it worthwhile investing 70,000 euros more and owning a new house for it?
► Income value method
Above all, this method takes into account the annual rent that can be achieved with an object, but factors such as the condition of the building or the remaining useful life are also included in the expert’s calculations.Prospective buyers who want to rent can get valuable information with the income value approach.
Example from Munich: A with 60 square meters of living space is offered for sale for 350 000 euros.The price includes ancillary costs such as notary fees, the costs of registering the land register or the land transfer tax.The buyer should not neglect these positions, they can quickly increase the total price by ten percent.The apartment is rented for 1000 euros per month, the rental income per year amounts to 12 000 euros.An important indicator of the attractiveness of the property is the rental yield.In simple terms, it is calculated by dividing the annual rent by the purchase price.
With this information, the interested party can better assess the offer.From the landlord’s point of view, it is interesting, as it promises higher yields than investing in a bank.There are currently only mini-rates of less than two percent – there is a rental yield of 3.4 percent even more lucrative, even if the investor calculates with one percent maintenance costs.
In general, the rule of thumb is for landlords: the better the location of the property, the higher the potential for appreciation, and the lower the rental yield must be.The worse the situation, the less likely it is to increase in value – and the higher the return must be to make the investment even more interesting.