Existing Property: Tips for a Successful Purchase
What is the advantage of an existing property and why should you consider purchasing it compared to a new build property?
The most important points at a glance
When purchasing existing properties, examining the location, the building substance, and the legal framework is crucial for a secure investment.
Careful planning of financing, consideration of additional purchase costs, and professional support during the viewing are essential for a successful real estate purchase.
What is an existing property?
An existing property is a fully developed building that does not require any further construction measures. This type of property includes various types, such as:
Single-family homes
Multi-family homes
Semi-detached houses
Commercial properties
Existing properties can be either in new condition or in need of renovation and often offer the advantage of being quickly ready for occupancy and located in good areas.
The variety of existing properties offers something suitable for every buyer. Whether you are looking for a condominium, a single-family home, or a commercial property, the selection is vast. Additionally, existing properties are often found in established residential neighborhoods, which means stable infrastructure and good access to public transportation and services.
Advantages of existing properties
Existing properties offer a number of advantages that make them an attractive option for real estate buyers. One of the biggest advantages is the price. Compared to new builds, existing properties are often more affordable, making them particularly interesting for first-time investors. Furthermore, these properties can be rented out or occupied immediately after acquisition, providing an instant source of income or use.
Another advantage is the established infrastructure in the residential areas where existing properties are often located. These areas typically offer good access to:
public transport
shopping facilities
schools
other important facilities
Additionally, in the case of existing properties, the waiting times that often occur with new constructions are eliminated, as they are immediately ready for occupancy.
For many buyers, the ability to plan is also a crucial factor. Existing properties are often easier to finance, as the costs are more predictable. This makes them a secure investment, where the risk of unexpected additional construction costs is low. Additionally, existing properties offer the potential for value appreciation through targeted modernization measures and renovations, which can increase the property's value in the long term.
Important factors when purchasing an existing property
When purchasing an existing property, there are several important factors that should be thoroughly examined. One of the first points is the location of the property. A good location can favor future value increases and should remain attractive as a residential area in the future. It is worthwhile to assess the surroundings of the property in terms of shopping facilities, schools, and other important amenities.
In addition to the location, the quality of the building fabric and its condition are crucial. A thorough inspection of the property, possibly by an expert, is advisable to uncover hidden defects and avoid high renovation costs. Technical aspects such as fiber optic expansion and connection to the district heating network should also be taken into account.
Finally, the condition of the property should be carefully checked, including any potential extensions and renovation work. Overlooked construction defects or age-related damage can influence the purchase price and should be considered in negotiations. Careful planning and assessment of these factors can help you make an informed decision and avoid unpleasant surprises.
Building fabric and condition of the property
The building fabric of a property is a decisive factor for the investment, as well-maintained building fabric can save long-term costs. Buyers should thoroughly inspect the external components, particularly:
facades
roofs
windows
Doors
The condition of the window frames and sashes, as well as the age of the windows, should be taken into account during the inspection. Here are some important points to consider:
Damp walls and mold can weaken the structure and pose health risks.
Previous damages such as water damage and moisture issues should be inquired about.
A thorough inspection for moisture, especially in room corners and behind built-in fixtures, is essential.
A detailed checklist for the viewing should include questions about the condition and features of the property. The layout and the number of power outlets are also important aspects that should be checked during the viewing. All these factors contribute to the overall assessment of the property and should be carefully examined to ensure long-term satisfaction.
Energy Aspects and Energy Certificate
The energy certificate is an important document when purchasing an existing property, as it indicates the energy efficiency class and the calculated or measured energy consumption. Sellers must present the energy certificate at the first viewing or display it visibly; buyers should pay attention to when the energy certificate was issued and whether any renovation work has been carried out since then.
Renovation recommendations in the energy certificate provide information about potential weaknesses and savings opportunities. Options for improving energy efficiency include, among others, insulation of wall cavities, retrofitting facade insulation, and the installation of heat pumps.
It is important to consider these aspects to estimate future heating costs and plan for any retrofit obligations.
Heating and Electrical Installations
The condition of the heating system is another important factor when purchasing an existing property. Many heating systems in Germany are outdated and over 20 years old. An outdated heating system can incur high costs and should be thoroughly inspected.
The electrical installations should also be checked before purchase, as outdated electrical systems can pose safety risks. When renewing electrical installations, modern smart home solutions should be considered to increase the property's value and enhance comfort.
Legal and Financial Aspects
When purchasing an existing property, legal and financial aspects play a crucial role. Important financial points include equity, ancillary costs, and expenses for renovation work. Modernization measures can increase costs both now and in the future.
Financing and funding opportunities
The financing of real estate purchases is a central aspect that should be well planned. It is important to understand the terms of the loan agreement in order to minimize financial risks. Various government funding programs, such as KfW programs, support the purchase and renovation of existing properties. A combination of savings contracts, government funding, and low-interest loans can facilitate financing.
Knowledge of one's own financial upper limit is fundamental to the negotiation strategy. Understanding the demand for the property significantly influences the chances of negotiation. Solid financial planning can help you successfully complete the real estate purchase.
Purchase ancillary costs and maintenance
The ancillary purchase costs are an essential factor that is often underestimated. These can amount to a total of 10 to 15 percent of the purchase price. This includes the property transfer tax, which can account for up to 6.5 percent of the purchase price. Notary fees and brokerage fees must also be taken into account.
Minutes from homeowners' meetings provide important information about future costs and necessary renovations. A thorough calculation of these costs is essential to avoid financial surprises.
Property viewing and valuation
A thorough inspection and valuation of the property is essential to make an informed purchasing decision. Both houses and apartments can be evaluated in this process.
In case of uncertainties, a construction expert should be consulted. They can provide valuable information about the condition of the property and uncover hidden defects. Professional support can also be helpful in price negotiations.
Checklist for the viewing
Good preparation for the viewing is crucial. It is recommended to schedule viewing appointments during the day to better recognize lighting conditions and possible defects. Bringing a construction expert to the viewing can provide valuable information for price negotiations.
This professional support is recommended to identify possible hidden damages to the building structure. The number of competitors can also significantly influence the negotiation scope. A detailed checklist can help ensure that nothing important is overlooked.
Experts and property valuations
Experts are professional specialists who create valuable reports for assessing the property price. The legal basis for property valuation is provided by the Property Valuation Regulation (ImmoWertV). There are various methods for calculating the market value, including property calculators that can quickly determine the value. An appraiser can also provide valuable support in this process.
A property value can be determined for foreclosure sales, divorces, or home sales. Before price negotiations, it is important to research the actual value of the property. The difference between property valuation and value determination lies in the fact that the valuation is professional while the value determination is rough.
Negotiations and Purchase Completion
To realistically assess the market value of the property is crucial for successful negotiations. It is important to analyze comparable properties and their sale prices. A goodwill strategy and setting a starting price below market value can be helpful in achieving better negotiation results.
Before the purchase completion, a thorough legal review should take place to ensure that all necessary permits and documents are available. The purchase agreement should include information on ancillary purchase costs, payment modalities, and the rights and obligations of both parties.
Market Value and Price Negotiations
The market value of a property can be determined using a property value calculator. It is important to accurately assess the market value of the property to avoid surprises and to have a better basis for negotiation.
If the purchase price is close to the market value, the buyer benefits. In this case, they can secure a good deal. A well-founded market analysis and knowledge of the actual value of the property can help you succeed in negotiations.
Legal Review and Purchase Agreement
The purchase agreement is a central component of the real estate transaction and should specify all essential details such as price and payment modalities. The real estate purchase agreement should contain clear regulations regarding warranties to protect buyers from unexpected costs. A real estate purchase agreement should clearly document all important agreements to avoid misunderstandings later on.
Before the purchase, it should be verified whether all required permits for the property are in place. Here are some points to consider:
Check whether roofs or extensions may have been constructed without permission.
Ensure that the property has all necessary permits.
Conduct a thorough legal review to identify potential issues.
A careful review is essential to avoid legal difficulties.
Summary
Purchasing an existing property can offer many advantages, from immediate readiness for occupancy to established infrastructure. However, like any major investment, buying real estate requires thorough planning and careful examination of all relevant factors. From the building substance to energy aspects to legal and financial considerations – every step should be well thought out.
Careful preparation and consideration of the tips mentioned above can help you make an informed decision and enjoy your property in the long term. Take your time during the viewing, involve experts, and plan your finances carefully. This way, your real estate purchase will become a successful and rewarding adventure.