The Ultimate Tips for Buying Houses at Accessible Prices
A big or small house? Cash or credit? When looking for a house there are always doubts, so it is convenient to have a small guide of recommendations and tips to buy houses and not get lost, both in understanding the procedures and the steps that we must follow.
Buying a house is the dream of many and can represent the investment of the savings obtained based on a lot of work, so before signing the contract and making the deposit, various factors must be taken into account to avoid unnecessary expenses in the future.
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What are the steps to buy a house?
In general, we should follow a series of steps or procedures to be able to acquire a home in a coherent way. They are common points in the sale of properties before buying a house:
How much can I pay to buy a home
The first thing we should know is how much money we can spend to buy a house. Although apparently this may be an obvious issue looking at our economic situation, there are two rules that we must follow in order to be calm throughout future years, be proactive and make calculations based on different possibilities:
The ability to borrow: It is the fee that we can pay every month, which will be calculated based on the net monthly income (It is the base salary, excluding allowances, commissions or supplements). Banks and real estate companies, who know a lot about the subject, recommend not to exceed 35% of the base salary.
The amount of the loan: Banks usually grant between 70 and 80% of the appraised value of the home. In some cases, this fee may be higher if, for example, we have guarantors, we contribute a large sum of money at the beginning of the sale or we have a fixed contract. This is an aspect that should be discussed personally with the bank in the case of requesting a mortgage loan.
These two factors combined are the ones that will determine – to a greater extent – the amount of money we can afford to buy our property.
What are the expenses to buy a house?
The following graph we can test a general scheme of expenses in the sale of a flat. To have an exact certainty – expenses may vary according to autonomous communities – we must always ask the bank, the real estate agency or the Notary’s office and they provide us with a small list where they are reflected. Three will be the key points where the money will go:
- Mortgage expenses: Opening commission, appraisal, notary, insurance … etc.
- Purchase and sale expenses: For new or used housing (Second hand) where we will see the Tax of documented legal acts or patrimonial transfers, VAT… .etc.
- Common expenses: Notary, registry, agency … etc.
Payment methods when buying a flat
The method of payment is one of the first questions to consider, as it will be the first selection filter. The two most used forms of payment are:
- Payment or deposit in a single issue. Perhaps the preferred form of payment for the majority, but one that cannot always be asked the question of… Can you pay for a house in cash? Of course! The benefits it presents is the immediacy with which the property is obtained in its entirety, avoiding making payments for long periods of time and generating interest for the delay in said payments.
- Bank credit. It is one of the most common ways to buy a home. The benefits of this purchase system is that a certain number of payments is established for a certain time, adequate insurance can be negotiated at the time of purchase and the exact payment amount is established.
How to calculate the price of a house
Although on the Internet we have access to a lot of simulators that tell us how to calculate the price of a flat, chalet, town house, premises … etc. We are going to be a little more serious about the real estate market, the value of a house is officially determined by a document called Appraisal, but we are going to extract two values to get an idea.
So, let’s see the real estate value of a property, that is, the price of a house through an appraisal in a quick and easy to obtain format:
- By average sale value apartment m2 neighborhood
We cannot explain the home appraisal process from a technical perspective, but we can apply what is called the “comparison method” which is part of the report itself. This way we will know how much a flat is worth in the neighborhood where we want to acquire the property.
It consists broadly in collecting 6 properties for sale in the neighborhood where we want to buy the home with similar characteristics. And from them we extract the average value per m2 built (Dollars / m2 built). Obviously, other factors influence the calculations of an appraisal (State of the house, height, age of the building, etc.), but for the approximate calculation of the sale of an apartment with the previous graph we will have a fairly approximate value.
Once the visit is carried out together with the real estate agent and a series of data has been collected (State of the home, needs renovations, check facilities, carpentry… etc.), you can have a slight idea of what it would mean to acquire the home in question.
However, in this guide to buying a house it should not be forgotten that not all the data that is extracted from the visit are objective and valid for making a decision.
- The environmental investigation processes
The neighborhood investigation comes first, it knows factors such as the type of life that is lived in the area, possible negative effects that were not seen with the naked eye during the visit, such as annoying noise, construction work, pollution, crime or other problems.
This information is easy to obtain, just by asking a little of the residents of the area you can know what is happening in the neighborhood.
For example; if we have hospitals nearby, shops and supermarkets, schools, metro stops … etc. Important, have good services nearby! … this can determine which house to buy or not.
- Zonal investigation of the housing environment
Neighborhood and community research, is the one that has to be carried out in the same neighborhood community, from this information is obtained about whether it has problems with the builders, the City Council, or simply if a significant spill has been made to correct any reform of the building, since once the house is acquired, this debt is contracted by the buyer.
Remember that student-student neighbors or tourist rental apartments sometimes bring a lot of noise with them.
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