ᐅ Compromises in the Property Location and Initial Questions
Created on: 8 Dec 2016 10:24
W
Winniefred
Hello!
I’m new here. I work part-time, and my husband is a full-time IT professional. We have two small children and are both still under 30.
For some time now, we have been considering building a house. Our bank has calculated a possible loan amount of €210,000. We want to keep our monthly payments to a maximum of €1,200 so we can still enjoy a good quality of life, and we want to fully repay the loan in no more than 15 years. We worked with the bank using very conservative assumptions (only one income, no salary increases, etc.) so that we could finance it with peace of mind.
However, in our city, houses like the one we want now cost around €400,000. We’re looking for a house with about 100-140m2 (1,076-1,506 square feet) of living space on a plot no larger than 700m2 (7,535 square feet). We want something modest and standard, with no special demands. Property prices in the city, even on the outskirts, have skyrocketed. Properties under €350,000 usually require extensive renovation, which pushes the total cost back up to €400,000 or more. That sum is simply too high and risky for us. Paying off over 30 years or sacrificing our lifestyle for 20-25 years is not an option. Condominiums aren’t much cheaper either—those typically still cost around €350,000, with no upper limit. In short: everything we can afford is further away than we would like.
My husband’s parents own a plot in a suburb that we could have. On that land, we could build our dream bungalow with our budget of €210,000, including landscaping (at least the paving and a carport; the rest of the yard is fine). The plot is just under 700m2 (7,535 square feet), well-shaped, fully developed with utilities, fenced, and flat. With this plot plus our savings, we would have substantial equity (over 40%) and could finance everything comfortably without stress. We know the area and the neighbors well; my husband grew up there, and we’ve lived there before. There is access to tram, bus, and commuter trains, plus full infrastructure like doctors and schools. The drawback is that it’s 17 kilometers (about 11 miles) from our main city. It’s a nice place, friendly, but it’s simply not “our” city, the one we love. In our city, however, we simply cannot afford anything under our self-imposed conditions. Objectively, nothing speaks against this small town: you can get to the main station in the big city within 15 minutes by commuter train, and a large shopping center is just 10 minutes away.
Have any of you made compromises regarding location? The difference is quite significant. Especially for us, since the plot is already available and wouldn’t need to be purchased for about €130,000 as a similar plot would on the outskirts of the city. And then it would be our dream home, not some awkwardly laid-out second-hand semi-detached house. But is it still reasonable to buy at all? Or would it be better just to remain renters and stay in the city we love? Our current rent is €1,000 all-inclusive, which is actually a bargain for a 102m2 (1,098 square feet) apartment in a nicely renovated older building on the city outskirts. The suburb would be another 10 kilometers (6 miles) further out...
City properties here sell very quickly. There’s no room for negotiation. But once you go to the suburbs or outskirts, prices can be really low.
So as you can see, we’re going in circles. On one hand, we want to own a home. This isn’t driven by fear of rising interest rates—that has always been our wish. On the other hand, we’re afraid to regret compromising on location. But we also don’t want to buy seriously overpriced property that we’d have to pay off for decades. Even if we relaxed our repayment goals, factoring in extra payments, pay raises, and extending the loan term to 20 years, it wouldn’t get us a loan amount of €400,000. Maybe €300,000 to €350,000 max, which would only cover a condominium.
Maybe you have some suggestions or could share your experiences and thoughts.
Thanks!
I’m new here. I work part-time, and my husband is a full-time IT professional. We have two small children and are both still under 30.
For some time now, we have been considering building a house. Our bank has calculated a possible loan amount of €210,000. We want to keep our monthly payments to a maximum of €1,200 so we can still enjoy a good quality of life, and we want to fully repay the loan in no more than 15 years. We worked with the bank using very conservative assumptions (only one income, no salary increases, etc.) so that we could finance it with peace of mind.
However, in our city, houses like the one we want now cost around €400,000. We’re looking for a house with about 100-140m2 (1,076-1,506 square feet) of living space on a plot no larger than 700m2 (7,535 square feet). We want something modest and standard, with no special demands. Property prices in the city, even on the outskirts, have skyrocketed. Properties under €350,000 usually require extensive renovation, which pushes the total cost back up to €400,000 or more. That sum is simply too high and risky for us. Paying off over 30 years or sacrificing our lifestyle for 20-25 years is not an option. Condominiums aren’t much cheaper either—those typically still cost around €350,000, with no upper limit. In short: everything we can afford is further away than we would like.
My husband’s parents own a plot in a suburb that we could have. On that land, we could build our dream bungalow with our budget of €210,000, including landscaping (at least the paving and a carport; the rest of the yard is fine). The plot is just under 700m2 (7,535 square feet), well-shaped, fully developed with utilities, fenced, and flat. With this plot plus our savings, we would have substantial equity (over 40%) and could finance everything comfortably without stress. We know the area and the neighbors well; my husband grew up there, and we’ve lived there before. There is access to tram, bus, and commuter trains, plus full infrastructure like doctors and schools. The drawback is that it’s 17 kilometers (about 11 miles) from our main city. It’s a nice place, friendly, but it’s simply not “our” city, the one we love. In our city, however, we simply cannot afford anything under our self-imposed conditions. Objectively, nothing speaks against this small town: you can get to the main station in the big city within 15 minutes by commuter train, and a large shopping center is just 10 minutes away.
Have any of you made compromises regarding location? The difference is quite significant. Especially for us, since the plot is already available and wouldn’t need to be purchased for about €130,000 as a similar plot would on the outskirts of the city. And then it would be our dream home, not some awkwardly laid-out second-hand semi-detached house. But is it still reasonable to buy at all? Or would it be better just to remain renters and stay in the city we love? Our current rent is €1,000 all-inclusive, which is actually a bargain for a 102m2 (1,098 square feet) apartment in a nicely renovated older building on the city outskirts. The suburb would be another 10 kilometers (6 miles) further out...
City properties here sell very quickly. There’s no room for negotiation. But once you go to the suburbs or outskirts, prices can be really low.
So as you can see, we’re going in circles. On one hand, we want to own a home. This isn’t driven by fear of rising interest rates—that has always been our wish. On the other hand, we’re afraid to regret compromising on location. But we also don’t want to buy seriously overpriced property that we’d have to pay off for decades. Even if we relaxed our repayment goals, factoring in extra payments, pay raises, and extending the loan term to 20 years, it wouldn’t get us a loan amount of €400,000. Maybe €300,000 to €350,000 max, which would only cover a condominium.
Maybe you have some suggestions or could share your experiences and thoughts.
Thanks!
B
Bieber081513 Dec 2016 14:13Winniefred schrieb:
So our very first priority is the location and then the home. Maybe both are even tied for first place. The drawback with priorities is that there can only be one number one. In your case, that’s the location. This means if you can’t find a property in your preferred area, you might end up without a home. (I think that’s completely fine.)
Winniefred13 Dec 2016 17:09At least until the kids move out, we would probably remain without property, yes. After that, as I said, one could simply buy a nice three-room apartment. Well, who knows what the market will look like in 20 years.
I wouldn’t have thought to call the real estate agent on a Saturday afternoon. I just contacted them by email to ask for the detailed brochure, mainly to find out the exact address and to arrange a viewing appointment. This morning I received the message that the house was already gone. I really wonder about that. Do people buy a house after only one viewing, and one without a building inspector? They must have seen the house on Sunday or Monday and agreed immediately. I don’t think that’s fair. I believe you should at least get the chance to see it. But I guess that’s wishful thinking.
In any case, thank you all for your opinions! It has also helped me to sort out my thoughts.
I wouldn’t have thought to call the real estate agent on a Saturday afternoon. I just contacted them by email to ask for the detailed brochure, mainly to find out the exact address and to arrange a viewing appointment. This morning I received the message that the house was already gone. I really wonder about that. Do people buy a house after only one viewing, and one without a building inspector? They must have seen the house on Sunday or Monday and agreed immediately. I don’t think that’s fair. I believe you should at least get the chance to see it. But I guess that’s wishful thinking.
In any case, thank you all for your opinions! It has also helped me to sort out my thoughts.
C
Caspar202013 Dec 2016 17:42Smaller real estate agents are mostly phone-driven. Larger ones usually have an office that might read the emails.
You could ask a real estate agent how many times they have "sold" the same apartment. Nothing is binding as a buyer until you sign with the notary.
After the first step, appraisers and other experts come into play.
You could ask a real estate agent how many times they have "sold" the same apartment. Nothing is binding as a buyer until you sign with the notary.
After the first step, appraisers and other experts come into play.
Winniefred13 Dec 2016 17:53Well, if he says the house is reserved, apologizes, and no longer wants to arrange a viewing, then it is obvious that he does not intend to offer the house anymore and assumes the sale is already agreed upon. So far, I have always called briefly (but during weekdays), requested the brochure at the same time, and then arranged an appointment for later (often because the owners only offered specific dates).
Winniefred schrieb:
Do people buy after just one viewing, without a building inspector? They must have seen the house by Sunday or Monday and agreed immediately. I don't think that's fair. I believe you should at least get the chance to see it properly. But I guess that’s wishful thinking.Yes, that’s exactly what people have been doing for a while. We experienced it ourselves two years ago and even made an offer right after the first viewing (which is non-binding anyway as long as nothing is finalized with the notary). We were actually the very first to view it (three hours after it was listed on the property portal). We called two days later; they said they would get back to us, but the house was already sold. The two viewings after ours ended up bidding against each other, and it went to the highest bidder—not “fairly” to the first, which was us. Also, the others arrived in cars with petrol engines, giving the impression they had ready cash available sooner.
If you see something interesting, hold on tight. Emails are too slow, weekends don’t count. But you’ve learned that yourself by now. This has nothing to do with fairness—the seller wants to sell, so should they wait fairly for anyone?
Similar topics