More house hunting trips and meetings today. Learned more things that seem mostly like a scam.
I’m now a homeowner. Just finished signing everything.
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Congrats! Get some ice for your hand after all those papers you signed/initialed.
15 characters of !
Put in an offer for a new home.
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Any scams involved?
Nothing tingling my spidey sense.
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Second offer accepted on the new home. Kinda lowballed with the first one to get a feel for what’s up.
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I’m curious, how does the homebuying process work in the EU? I’m sure it varies a lot by country and administrative division of course, but I only know this from the US side and I generally assume US methods are fuckier than European methods.
What is it that seems scammy to you? I assume both parties have agents and attorneys, and I assume that whatever bank you’re working through for a loan is pushing a lot of information on you really fast?
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Thankfully, not being a native German speaker, I’m being shielded from a lot of the intricate paperwork and form filling. And thankfully for my girlfriend, her father is super into doing research into mortgages and stuff.
The scams aren’t actual scams, per se, but situations where we as buyers would be in such a disadvantaged place to be super unaffordable.
Both the buyer and the seller having separate agents and lawyers always feels like a scam, as suddenly there are two middlemen each taking a cut of some money.
The place we found needs to go through an agent who is taking a commission, but for the the work he is doing, 5% seems way too much. At least there aren’t two agents.
And yes, even though this apartment has been empty and waiting for a buyer for about a year, suddenly everything needs to be done right away. Of course it doesn’t. We didn’t even expect to find a place so quickly, so thought we’d have time to get all the paperwork squared away with my accountant and with the bank before ever needing to put in an offer on a new home.
The biggest scam-feelings were with a new built home that wasn’t finished yet. It seems that standard thing is to immediately give them the percentage of the cost of the house determined by how much it is built. This was 58% complete so they wanted 58% of the money up front. And we can’t move in for over a year, and don’t know fully what the building or neighborhood will be like when it’s complete. Big fat nope!
There are other weird things, all of which are perfectly legal and probably perfectly normal, but assume you’re buying a property as an investment or a second home or just you have money coming out of your ears. That’s not the position we’re in!
Would you prefer if there was only one middleman with unclear biases towards buyer and seller?
That’s why I like PA’s laws. There’s a fixed 3% of sale price that gets split between the buyer and seller agent as their commission required by law. So literally everyone has an agent but the price is always bounded by your budget.
Only having one agent feels like a scam too. It all feels like a scam.
Next year Berlin/Germany is passing a law/regulation about maximum agent fees with housing. But we’re not buying next year.
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I feel you on this. I feel like if I could’ve waited longer to buy a house that the market might have crashed out again, but life goals/when my rent lease was ending mandated my purchasing window (wasn’t a terrible time and we negotiated a good price from the ask). As a first time buyer you are usually just at the mercy of the macro landscape.
OK wow that straight-up sounds like a scam right there. Buying an unfinished home for any amount of money sounds like a great way to let a building company cheap out on the rest of the work by basically extorting someone who sunk a significant amount of money into a project and is now reluctant to back out.
So, sounds like a good call to me!
Oh wow I totally forgot to post here but uhhh we bought a house in Seattle 
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When we started looking at places to buy, Juliane was really up for something newly built, but I said “a home that actually exists” is going to be one of the biggest factors for me. She didn’t understand what I really meant by that until we visited five or six hypothetical places to live. It doesn’t matter what is in the brochure or in the renderings online, being able to walk around a home is going to trump future possibilities.
Another place we looked at seemed like it would be perfect from the photos and plans online. But it turns out two of the doors were in slightly the wrong place compared to the plan, and one window terrace opened in the wrong place, making an entire room almost useless for what I imagined. It’s so hard to have all that pinned down in advance of the building being finished. But if we visit a place that is finished and empty, we can make actual real-world measurements and know everything is in order.
And I knew that if a house or apartment actually exists, it meant it was possible to buy right away. The sellers want it sold, so a lower offer than asking price is fine. With an all-new development, as long as all the property is sold by the time it’s possible to move in, the developers are happy. If you put in an offer 10% under the asking price, they’ll laugh you off. They know they’re going to sell 100% of the units, so why accept such a price?
Tomorrow we visit again, this time with a surveyor/building expert guy. Not sure who exactly, as the in-laws have organised that bit.
I’m mostly going to be checking out the possible layouts of the kitchen and making sure we don’t need to buy a single new piece of furniture. If we can move house without losing one piece or needing to buy a single piece of furniture, this is going to be the biggest win of my life.
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Pre-selling is quite common in New construction. You are locking in the cost of the house ahead of time (hedging against the market inflating further) meanwhile the builder is hedging against a drop in the market.
There are plenty of communities/lots that complete pre-sell a year out from construction complete date depending on the local market and the models being offered in the States. The other advantage to the buyer is that you can pre-pick your finishes and features for full customization.
Your defense against “cheaping out” on materials or the actual construction is a good closing contract with inspection stipulations on house completion and actions for remediation of any issues. The fall back is always a lawsuit over breach of contract.