We are (close to) buying our first home in Switzerland!!!

As you may have noticed, my blogging publication rhytme slowed down in May-June.
Be reassured, I'm not giving up with mustachianpost.com as I did in the past with other blogs. I'm still motivated to share with you our journey towards financial independance in Switzerland.

You are amongst the first to be in the confidence: we might have found the place we will own for the next decades!!!
I say might as we didn't signed yet at the notary...

Our (potential) new home

This is crazy how fast this happened. It all started at the end of May when we were being really pissed off by the lack of real estate opportunities in the area that we look for.
We then decided to enlarge the "Vicinity" parameter on Homegate.ch by some kilometers...and then: boom!
We did hit a very nice apartment at a reasonable price.
We checked one of our main deal breaker criteria which is the closeness to a train station. There was one quickly accessible! Great, no need for another car!
All the rest was fine and matching our household criteria: brand new (i.e. no renovation work needed), modern design, enough space for our family, but not too much either.
Last but not least: Italian shower!!! Yeah, I know, a Mustachian could do it on its own but I'm not in the construction thing (yet).

One other point we weren't sure about at the beginning is that it's in a small countryside village. We like small cities (there is one close) with easy access to train station and last-minute groceries shopping.
But the hesitation was quickly gone when we thought about all the advantages: raising children in a better environment with less daily speed, proximity with wild (gosh guys, there is a forest within a distance less than 2kms!!), less city noise, less city lights at night, and so on and so forth with all what make countryside a nice place to live! Checked!

After one month of watching pictures, visiting the place several times, it's a clear yes for both my wife and I. We've seen quite some real estate opportunities so far but none was even close to the gut feeling we together have since the first time we visited it!
If it's a clear YES, then it's a clear YES!

Call me Mortgage Hunter!

Once we were clear that we wanna proceed, I started to hunt for the best mortgage interest rate out there in Switzerland, as we want the best from the start - unlike car insurance and mobile phone subscription that I decreased iteratively due to my lack of knowledge of Swiss specificities.

Just so that I've it written somewhere: we missed an enormous mortgage opportunity back in January this year when Crédit Agricole Financements opened a new office in Yverdon-les-Bains with their 0.98% on 10 years!!!
God I wish we had found the apartment earlier... But well, there must be a good reason. Probably that CAF will soon be out of business due to its french holding - one tries to convince himself as one can!

Back to our topic: first thing I did was to open Comparis.ch and find the top ten banks/insurances with the best mortgage interest rates.
I also randomly checked other websites just in case Comparis wouldn't have listed them all.
I will publish a dedicated post about this when we will have (hopefully) closed the deal!

In parallel, our real estate middleman proposed a company with whom he works with. They're called DL and are mainly present in Romandie.
What do they do? They take in all your financial infos and then, based on their experience and knowledge, they go to the best mortgage possibility for your case.
If your case is refused or they consider the offer not good enough, they jump onto their second best option. Then third, and so on and so forth.
They told me that usually they go up to two until they get the deal they consider the best.

Sadly (or not), I already started my own investigations before I met the DL guy so in order to not confuse banks/insurances with paralell contacts, I followed my way and in case I wouldn't have found something good enough, I could have contacted back the DL people.
What I didn't do so far as I found a good deal - to be detailed if we finally get this new home!

My feeling about this DL is somewhat mixed. As it was recommended to me by the broker himself, I feel the one guy who know about my finances could guide the one trying to sell me a more than half a million property at the price he really wants...
I'm almost sure they don't share numbers as it's not legal, but maybe some indicators like "Yeah yeah he can really afford this..." - read "Don't give up in the negotiation, they will give up themselves!". If I would start over, either I would do it all myself, or else I would chose a company like DL, but independent of the broker.

Real estate, a world on its own

It's incredible how each business domain has its own rule. Thankfully I love to learn new things, else I would probably have given up...

The most important topic I learnt about during last month is the negotiation power curve - i.e. when you have the most/least power to ask for your price.
This applies to new building construction (maybe to other types of real estate property to some extent, but I have no clue about them).

There are three main sale phases for a real estate promoter:

  • 1/ The promoter have an idea on paper about a new building. He prepares his case, then manage to get a loan for his project.
    That's when he enters the promoting phase: the ONE thing he wants most is to find one or two buyers for his theoretical project so that banks are unlocking the loan money in order for him to start his construction work.
    Needless to say that in this phase your negotitation power is up to the highest! Your offer or no deal! That's (almost) it.
  • 2/ The second step is the construction phase where the promoter isn't actually promoting anything anymore as he is in the process of building the house/apartments. This is the step in which we fall down unfortunately...
    As they told me, they are not really keen to sell as there are many additional stuff that change compared to the initial plan, hence the price is constantly (at least sometimes to often) adapted. And in case the promoter is ok to take the time to sell, his price is normally almost non negociable as he is sure he will manage to sell the properties in the end (welcome on the Swiss market!).
  • 3/ Finally, there is the third and last after-construction promoting phase. Here the promoter is over with the current building, and probably already on to some other construction plans. Hence he wants the sale to go fast, and you are back with high negotiation power.

My advice as a rookie in the real estate realm is to try as best as you can to fall into phase 1 or 3.
A pro tip if you look for your new home: you can be in phase 1 by attending various salons like the SIL or the "Comptoir" events. Promoters are often there as such (vs. constructor) with their beautiful shiny projects and attractive prices.

What's next?

We got our offer accepted by the promoter which is the first very good news. Then, we are now trying to find an agreement on mortgage rate and conditions with the loan entity (that seems to go in the right direction at the moment).
Once all that will be solved, we should have no more blocker to sign at the notary and celebrate this huge step in our lifelong financial goals.

I'll keep you posted with more news about the topic. Also, we will go through each details of the transaction in further blogposts so that I share all what I learnt with you dear readers.
Your feedbacks are obviously more than welcome as the topic is so huge that I can't pretend to know it all!


UPDATE 22.07.2015
We finally signed and bought are first home in Switzerland!!!



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