ᐅ Is Buying a House a Wise Decision in the Current Market Situation?
Created on: 23 Sep 2020 14:32
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Alibert87
Good day and hello everyone,
Some time ago, I joined this forum to gather information and read experience reports.
I would like to get your neutral opinion on whether buying property at this time would be advisable. We currently rent in a "very good location" and would like to purchase a home here. Many properties are sold "off-market" or only available at very high prices (I’m talking well over 500,000). There is no land available for development; if there is, a property is demolished and rebuilt. I want to gather some input on whether this whole situation is crazy or if such a project is feasible.
Since we don’t have a specific property in view yet but have been monitoring the market for about 1.5 years and have already done quite a few viewings, I assume the median price for homes or condominiums that suit us would be around 600,000.
He, 33 years old, permanently employed in the public sector, net income 2,600 euros (plus 14 monthly payments plus bonus, around 5,000) – from 2021 about 3,000 net (fixed)
She, 32 years old, permanently employed part-time, 25 hours per week, net income 2,300 (plus additional payments around 2,000)
1 child (child benefit) – possibly a second child within the next 3–5 years
Married, tax class 4
Equity around 110,000 (plus 30,000 as a buffer)
Regarding equity, I have a question: Are bank conditions tiered, so that having, for example, 10,000 more in equity results in a better loan offer (how does this tiering work)?
We are really torn whether or not to take this step. It feels very surreal to spend so much money on housing.
I am grateful for any advice
Regards
Some time ago, I joined this forum to gather information and read experience reports.
I would like to get your neutral opinion on whether buying property at this time would be advisable. We currently rent in a "very good location" and would like to purchase a home here. Many properties are sold "off-market" or only available at very high prices (I’m talking well over 500,000). There is no land available for development; if there is, a property is demolished and rebuilt. I want to gather some input on whether this whole situation is crazy or if such a project is feasible.
Since we don’t have a specific property in view yet but have been monitoring the market for about 1.5 years and have already done quite a few viewings, I assume the median price for homes or condominiums that suit us would be around 600,000.
He, 33 years old, permanently employed in the public sector, net income 2,600 euros (plus 14 monthly payments plus bonus, around 5,000) – from 2021 about 3,000 net (fixed)
She, 32 years old, permanently employed part-time, 25 hours per week, net income 2,300 (plus additional payments around 2,000)
1 child (child benefit) – possibly a second child within the next 3–5 years
Married, tax class 4
Equity around 110,000 (plus 30,000 as a buffer)
Regarding equity, I have a question: Are bank conditions tiered, so that having, for example, 10,000 more in equity results in a better loan offer (how does this tiering work)?
We are really torn whether or not to take this step. It feels very surreal to spend so much money on housing.
I am grateful for any advice
Regards
So you’re looking for a detached house, close to the city center in front near the pedestrian zone (but with a private garage), and a quiet garden at the back (accessible via a private bike path). No major renovation backlog and ideally all this for around half a million (or less, considering that a terraced house already costs that much). Did I get that right?
You’ll notice… you have to make compromises somewhere. Otherwise, you’ll still be renting in five years, maybe even with a notice for owner occupancy in hand by then…
You’ll notice… you have to make compromises somewhere. Otherwise, you’ll still be renting in five years, maybe even with a notice for owner occupancy in hand by then…
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Alibert871 Dec 2020 13:48Oetti schrieb:
Sure, that would be enough. But honestly: that can sometimes take years, and the waiting period can really wear you down. I’d rather have a bird in the hand than a bird on the roof (something like that was the saying, right?). I still remember very well how we searched almost daily on the usual real estate platforms and got more and more frustrated week by week because the dream property didn’t show up or there were no new listings. That was very annoying too.
Ultimately, it’s your decision, and no one else can make it for you. Make a list of the hard facts that your dream home absolutely has to meet and the absolute deal breakers. Compare those with what the offered house provides and then make your decision. That’s not so easy, since you rarely miss something you’ve never had or known. I can live with certain things or processes (like carrying my wife’s e-bike down to the basement every day), but I don’t want to 🙂 Maybe access to the garden doesn’t matter to me at all, I don’t know (just an impression at the moment).
It’s all not that simple because it’s still a fairly blank slate. I can say what bothers me now and, after some time, I could also say what would bother me in this mid-terrace house (if I were living in it).
Alibert87 schrieb:
Not entirely serious... one could wait until, in the current situation (covid-19), some houses become unaffordable and thus more "good" offers come up Many are waiting for that. I work at a financial institution, and our list of clients pre-registered for property brokerage plus financing is long, very long! If the financing of a property, where we are also listed in the land registry, gets into trouble, we know exactly whom to notify immediately. Nobody just sits down and posts that on classified ads websites. So far, however, we have very few cases where corona is threatening the financing. Not much will change there, and the vaccine rollout is already underway.
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Alibert871 Dec 2020 13:54Scout schrieb:
So you are looking for a detached house, close to the city center with a pedestrian zone in front (but with your own garage), and a quiet garden at the back accessible by a private bike path. No renovation backlog and ideally all of this for around half a million (or less, considering that a row house already costs that much). Did I get that right?
You realize something... you have to make compromises somewhere. Otherwise, you’ll still be renting in five years. By then, you might even have an eviction notice in your hand... Exactly! That’s the wish, and I think most people want the same… that’s what I’m working towards. Not to sound naive, but why should I settle for significantly less? I appreciate your honest words though.
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Alibert871 Dec 2020 13:58Jean-Marc schrieb:
Many are waiting for this. I work at a financial institution, and our list of pre-registered clients for property brokerage plus financing is long—very long! If the financing of a property, where we are listed in the land registry, runs into trouble, we know exactly who to notify immediately. Nobody just sits down and posts it on local classified ads. So far, we have hardly seen any cases where COVID-19 is threatening financing. Not much will change now, and the vaccine rollout is already underway. was, as mentioned, not entirely serious. In my opinion, it is also the case here that in the areas where we are looking, there are no "losers"—those who, through their own efforts or substantial inheritances, still have plenty of breathing room. When I think about the inheritances some of my friends are set to receive, it makes me feel uneasy. It’s more than impressive.
And because almost everyone wants it that way, and it meets a low supply level, how likely is that?
Sorry, but most buyers (dual-income households under 40) can afford around half a million, it’s really not that much anymore with the low interest rates!
And why should a seller offer something below market price? I’m not familiar with Osnabrück, but if you have to pay 550,000 euros (about $590,000) for a renovated townhouse, you won’t get your dream home for less than 750,000 to 800,000 euros (about $810,000 to $860,000). So either come to terms with that price or lower your expectations. That’s it.
Regarding the location: I don’t find living close to the city ideal if you have children. Better to consider something in the suburbs, like a semi-detached house. Sure, you’ll have to commute further, but try to find a place with good bus connections or similar.
Sorry, but most buyers (dual-income households under 40) can afford around half a million, it’s really not that much anymore with the low interest rates!
And why should a seller offer something below market price? I’m not familiar with Osnabrück, but if you have to pay 550,000 euros (about $590,000) for a renovated townhouse, you won’t get your dream home for less than 750,000 to 800,000 euros (about $810,000 to $860,000). So either come to terms with that price or lower your expectations. That’s it.
Regarding the location: I don’t find living close to the city ideal if you have children. Better to consider something in the suburbs, like a semi-detached house. Sure, you’ll have to commute further, but try to find a place with good bus connections or similar.