18/03/2022 | Broker Tips

Mistakes not to be made when buying real estate in Switzerland

By Vincent Grognard, director of IMMO 4G real estate agency and partner of Lookmove

A real estate purchase is not something that can be taken lightly. You might regret missing out on a good deal for a week, but you might regret doing a bad deal for a lifetime.

Active in real estate since 2012 and in residential real estate brokerage since 2018, I have helped more than 85 people to become real estate owners in Switzerland.

Here I share experiences of the biggest mistakes you could make when looking for and buying a home in Switzerland.

Not defining your project well

The starting point for a successful purchase is to clearly define your desires and needs.

There are two areas with which you have been in constant contact since your birth. These are food and accommodation.

In my opinion, it is useless to tell you that you must look for a property with a parental bedroom and a bedroom for each child. On the other hand, take the trouble to mentally dream up your ideal home.

It may not match something that exists. But you can at least approach this personal ideal.

To have a chance of finding the property of your dreams, take the trouble to dream it. Then write down your criteria and rank them in order of importance to you.

You can then turn this list into a checklist that will help you during your visits.

Badly estimate your purchase budget

Estimating your purchase budget does not yet mean that you will sign a mortgage contract. However, you should have a good idea of the budget available to you.

Your ability to buy depends on two main factors: your income and your personal funds.

Very briefly, you must have 20% personal funds, 10% of which cannot come from your second pillar. The interest charges for your home, calculated on a theoretical interest rate significantly higher than the current rates, must not exceed 1/3 of your income.

Many online tools as well as very competent mortgage brokers can help you with this step.

Take the trouble to establish the maximum budget for your real estate search.

Not inspecting the property thoroughly

Before making an offer to purchase, I strongly advise you to visit and inspect the property and its documents several times.

Most of us are not building professionals. You can have the property you are looking for inspected by an expert. But this solution can be expensive and waste valuable time in a very tight market.

The solution, in my opinion, is to develop your sense of observation in order to determine, for yourself, if the property which interests you is in a state that corresponds to what you are looking for.

It is an ability that you must acquire during your search.

Not inspecting the immediate environment

Walk around the neighborhood for several hours of the day on weekdays and weekends. Check for yourself the distances to public transport, the time it takes to go to school, the possibilities for shopping, etc.

Take your checklist and check each of the points that seem important to you. You can of course ask your questions to the owner-seller or to the broker who represents him, but what really matters are your impressions and conclusions.

Not making your own estimate of the value of the property

Everything is bought and everything is sold, it just needs to be at the right price. If you are about to buy a property that needs major renovations, this is not a problem, provided that you buy it at the right price.

How do I know if the asking price is correct?

It’s up to you to check it. You must make your own estimate of the property.

The profession of expert valuer exists, there is even a federal degree just for this specialization.

You don’t have to become a certified valuer to know that 2+2 is 4.

Many articles explain the basics of real estate valuation and reading them will give you enough understanding of the subject to be able to check for yourself the correctness of the asking price.

Don’t compare like with like

Apartments compare to apartments. Villas compare to villas. South facing apartments with balconies compare to south facing apartments with balconies…I think you get the idea.

Unfortunately, information from real estate advertisements is not always reliable when it comes to comparisons. It is common to see confusion about different areas, for example.

This is where you need to go into more detail so you can compare like with like. In terms of areas, for example, I advise you to make your own measurements on site. The living area will correspond to the sum of all the heated and naturally lit rooms which may be used for dwelling – which means the living room, the bedrooms and all their annexes such as bathroom, kitchen, cupboards, stairwell, distribution hall, corridors, etc.

By measuring yourself, you will know exactly what you are buying.

Not comparing mortgage offers

Once you have agreed with the owner-seller about the price and when you will take possession of the premises, it will then be time to find a partner to finance your purchase.

This is when you will be able to really compare mortgage financing offers.

Depending on your financial and professional situation, it will be more or less easy for you to negotiate the conditions.

I’m certainly not telling you anything new, but know that the people who get the best terms from the banks are… the millionaires.

In my work as a real estate broker of properties intended for the housing of their buyers, I meet extraordinary people such as you, but few are millionaires.

Getting the best rate is one thing. Getting a package deal that best fits your criteria is even better.

Mortgage offers come with a retirement plan, savings, insurance, etc. You will have to determine the optimal solution for you.

A well-meaning mortgage broker can help you find the optimal solution.

Not being reactive

No matter how tight or soft the market is, when you finally find the right deal, you need to act quickly.

Although I do not advise acting in haste, I advise you not to procrastinate when all the indicators show you loud and clear: GOOD DEAL!!!

You won’t be the only one to have spotted it.

Do all your checks, go through all your checklists, visit it several times, inspect it properly. But do it all quickly.

Abandon your purchase plan

Life is not a long quiet river. Your real estate search will certainly be strewn with pitfalls. You will miss deals. You will get carried away and then learn that the owner has sold to another.

It is a learning process. When you get to the point where the bargain escapes you, it’s really not the moment to give up.

Take your courage in both hands and stay on the lookout. Perhaps the house you visited two months ago, which was 200,000 francs above the market price, is suddenly offered at the right price. When that happens, following the previous advice will be very wise.

If you want to learn more about tips for a successful real estate purchase, I invite you to consult our real estate blog full of advice for buyers.