Your own four walls where you can lead a self-determined life. A dream for which many of us have been saving for years. However, there are some things to consider when buying a house or apartment. We have put together the most important questions and tips for you.

Thirty-six percent of Swiss citizens own residential property and have fulfilled their dream of a self-determined home. Would you like to join them soon? We’ll show you what steps you should take when buying a house or apartment. 

1. What can I afford? How much equity do I have to contribute? 

When buying a property, you normally need 20% equity, and 80% of the purchase price can be financed with a mortgage. For a purchase price of CHF 1 million, you will therefore need CHF 200 000 in equity. 

The equity must be covered with at least 10 percent cash assets. Cash assets include, for example, private savings such as account balances, pillar 3a savings, a prepayment of inheritance or a gift. The remaining equity can be taken from a pension fund. You can read more about equity here: Equity for a home: with these tips it works

Your income also counts. You need a certain minimum income depending on the purchase price, and you also need to take account of the viability of the property. Our affordability calculator helps you determine whether you can afford the property over the long term.

Clarify your financing situation with an expert early on, as it is central to your search.

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Financing is an individual affair and there are numerous financing options. Speak with an expert.

2. Where can I find the right property?

Browse online real estate portals on a regular basis. Be sure to narrow your search so you can see the results that interest you. But don’t be too strict with the filters, or you may miss an interesting opportunity. It’s worth setting up a search alert that regularly summarises the latest listings.

In addition to online portals, you can contact real estate companies and property management companies directly and let them know you are interested in buying a home. You can also use your private network and inform your friends and acquaintances of your intention to buy. With a bit of luck, you’ll be the first to learn about a property for sale.

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3. How can I narrow my property search?

Determine as early as possible which type of property is for you and your self-determined life. You can define various criteria, such as

  • Price
  • Region
  • City/town, country or agglomeration
  • Minimum/maximum number of rooms
  • Minimum/maximum number of square metres
  • Availability of parking
  • Homes with or without a garden/terrace/balcony
  • Surroundings: Proximity to shopping facilities, public transport links, educational facilities for children

The criteria can be extended as necessary. However, you should not limit yourself too much. Remaining expansive in your search criteria or prioritising your criteria will enable you to compare the options better. Think about where you are willing to compromise as well – the absolute dream property is difficult to find.

4. Where can I find the right mortgage?

You can obtain a mortgage from banks, insurance companies or pension funds. You can choose from various mortgage models, namely variable, SARON and fixed-rate mortgages. It is important for the mortgage to suit you and your situation. 

Which mortgage suits your situation?

Our experts would be happy to advise you on the right mortgage for your home – at a location of your choice or online by video.

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Enjoy a transparent overview of the latest mortgage interest rates.

5. I have found an interesting property. What do I have to look for when viewing it?

Make sure you view it during the day. Make a checklist in advance so you don’t forget or overlook important details. This could include, for example, the structural condition of the apartment: have the floors been laid properly? Has the exterior façade been well maintained? Are the rooms well insulated? Personal requirements should also be taken into account, such as the view from the windows, etc.V

isit every room of the property, including the basement, attic and garage. In addition to these factors, you should also find out about the surroundings and the neighbourhood. You should establish why the owner wants to sell. 

As a rule, a viewing takes 30 minutes.

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Go with your gut feeling. In most cases, you already have a significant impression when you first step into the house or apartment.

6. What do I do if I want to buy the property I have visited? 

Each sales process is individual. Ask the seller which documents you need. As a rule, you will receive a list of all required documents.  

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Remember nowadays ‘first come, first served’ is often the key to success. You need to react quickly. We recommend that you involve your bank as early as possible so it can prepare everything and provide proof of financing quickly if you intend to buy.

7. There is a bidding process for the property. What do I need to consider?

A bidding process is the sale of a property in which the seller does not define a fixed purchase price, but instead asks interested buyers to submit a purchase offer. Often a minimum amount is specified.

In a bidding process, it is important to know your maximum price. Define in advance exactly what you can afford. You should also clarify what the maximum estimated value of the property is. 

In some bidding processes, the seller is interested not only in the price, but also in so-called soft skills. These include, for example, family members, community affiliation or how well they like the buyer. A personal conversation or an accompanying letter can have a positive impact in such cases.

8. How does the actual home purchase work? 

After the buyer has agreed, you usually first sign a reservation contract and make a deposit to demonstrate your intention to buy. 

The official purchase contract is drawn up and notarised by a notary. As a first step, both parties are instructed to forward all relevant information to the notary. Based on this, the purchase contract is drawn up and sent to the buyer or seller as a draft. This takes place two weeks before the official date of sale. Until then, both parties have time to carefully examine the contract. On the day of sale itself, the official certification takes place, at which the seller, buyer and notary are present and officially sign the contract. 

Payment is made after the meeting with the notary. The main part of the purchase price is usually paid upon submission of the land register entry relating to the transfer of ownership. In most cases, the buyer’s bank provides an “irrevocable promise of payment”, after which the transfer is carried out following the transfer of ownership. At the same time, the buyer’s bank requires the delivery of a mortgage note from the seller before payment is made. 

Once receipt of payment has been confirmed, the land register is amended, whereby the buyer becomes the official owner of the property. 

9. What other costs need to be kept in mind in addition to the purchase price? 

Other costs aside from the purchase price are due when purchasing a home:

Real estate transfer tax 

The real estate transfer tax is due upon registration of entry in the land register and varies by canton. Ownership is not transferred until the real estate transfer tax has been paid. Learn about costs online, e.g. on the website of the cantonal notary. 

Costs for a notary public and entry in the land register

Every property purchase must be certified by a notary and also entered in the land register. The costs for this vary depending on the canton and are calculated as a percentage of the purchase price. The entry in the land register is also a percentage of the purchase price. In Zurich, for example, the notary costs are 0.1%; entry in the land register costs 0.15%.  

Mortgage note

In the case of mortgage loans, a mortgage note must be submitted to the land registry. There are fees for this; the calculation of the fees varies by canton. They are generally between 0.1% and 0.3% of the purchase price.

Pension withdrawals

Taxes are due on pillar 3a or pension fund withdrawals. Ask your financial advisor for an overview of the costs.

Insurance fees

As a house or apartment owner, you should insure your new property. Buildings insurance protects you against damage caused by broken glass, water or fire. Click here to find out more.

Would you like expert advice on buying a home?

Would you like to work with a Swiss Life expert to find out the best way to buy a home? Make an appointment for a personal consultation – at your home or by video.

image source: Philip Brand, Unsplash, Patrick Robert Doyle

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