Buying a home
Before buying a home, you should get information about the actual price of the dwelling, the land, and your ability to pay. This will help you avoid potentially unpleasant surprises. If you purchase an apartment, you usually become a partner in the housing association.
Get information before making a purchase decision
The debt-free price of the dwelling
- The debt-free price consists of the sales price and the apartment’s share of the housing company’s loan. The sales price is paid directly to the seller, and the share of the housing company’s loan is paid back in monthly instalments.
- The land can be owned or leased by the housing company, which also affects the price. An apartment with a fully owned share of the land is typically more expensive than an equivalent apartment with leased land. On the other hand, the lease payment can increase according to the terms and conditions of the lease agreement.
Your ability to pay and the total cost of the dwelling
- What type of property can you afford?
- Pay attention to the debt-free price, i.e. the price that you will actually pay.
- Pay attention to the total costs of housing. The costs can initially appear low, if you only pay interest on the housing company’s loan. Once the capital repayments start – sometimes years after moving in – the monthly charging can be hundreds of euros.
- Your ability to pay must also cover any interest rate rises.
- You can also apply for a mortgage to pay off your share of the housing company’s loan. Negotiate the mortgage terms with your bank and compare them to the housing company’s loan to see which option will be more affordable for you.
Monthly payments
- What is the monthly payment for your apartment, and what does it include?
- If the building is on a leased plot, how much will you pay for your share of the lease per month?
- What is the monthly repayment of the loan, after the payment of interest alone ends?
- What other monthly costs are there – e.g. water bills, parking, sauna?
Land ownership
- Is the building on its own plot, on leased land or leased land with a purchase option?
- Who owns the land, if it doesn’t belong to the housing company?
- If there is a purchase option, what is the purchase price of redeeming the land share?
- What is included in the purchase price, what other potential costs are there, and what are the terms and conditions?
- How long is the lease?
- What are the terms of rent increase?
- What happens when the lease ends?
- Does the lease agreement involve price restrictions on the resale of shares in the housing company?
The housing company’s financial standing
- Read the most recent financial statements of the housing company. Get information about the housing company, and not just about your apartment.
- The maintenance requirement report and financial statements provide information about the condition and financial standing of the housing company.
- Find out what renovation works have been done or are currently planned.
Local plan
- Is the local area fully developed? Any new construction projects or changes in the surrounding environment?
- The local plan is available on the website of the municipality.
Inquire the seller, the property manager and the estate agent about further details. Read the housing company’s latest financial statements, the land lease and purchase terms, and local plans.