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  #21  
Old 16.01.2015, 12:41
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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I think you could argue Force Majeure maybe? "Sorry, guv, but the SNB has caused my money to be devalued and I can't afford to buy your house any more. I know we agreed a price, but the best I can do now - if I transfer the money today - is 4 Francs" (or whatever your savings are currently worth).
I would not show this "Force Majeure" card initially.
First establish with 100% certainty that the verbal is binding/non binding.
Only play the "Force Majeure" card if the verbal agreement is binding. Even then it may not be be enough.
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  #22  
Old 16.01.2015, 13:06
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

At some point you are going to have to bite the bullet & go for it, otherwise you will never buy anything. And if you don't do it today & don't have a tomorrow, you'll be up there on a cloud thinking it would have been nice to live in my own house.
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  #23  
Old 16.01.2015, 13:09
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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You can even withdraw from the sale up to the point of the exchange... albeit you will lose the deposit paid.
Got it in one, you lose your 10% deposit and that is why they ask for 10% deposit
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Old 16.01.2015, 13:11
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

The NZZ just published an article on this topic. UBS is predicting a "soft landing" for residential dwellings while a somewhat harder landing is expected for business properties. The paragraph under "Preiskorrekturen mφglich" summarizes the scenarios:

http://www.nzz.ch/wirtschaft/immobil...ver-1.18462347
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Old 16.01.2015, 13:11
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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Do you know the reason the property is being sold? Are the sellers moving overseas? If so, you may have some scope for renegotiation on the price as they will be up more than 10% on the currency changes yesterday, and may be willing to pass on some of their good fortune.
So why would anybody want to do this, it's same as handing over cash or a cheque !!
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  #26  
Old 16.01.2015, 13:15
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

If you have a deal, you have a deal, written, oral or whatever.

Would you be happy if the currency had gone other way and the seller pulled out ?

Any point in any deal there is an element of trust, and without this and saying yes, then pulling out is not nice.

A deal is a deal !
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  #27  
Old 16.01.2015, 13:18
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

If you have other options, the answer would have to be no!

If you have to buy, don't expect the property to hold or increase its value in the short term and if you need a mortgage you'll find that they will be more expensive in the very near future as well.

I believe the Swiss housing market has been heading for a downward correction for a while and yesterdays two decisions haven't helped.

You've probably been hit by a double whammy and I just hope your wages or pensions are paid in CHF.
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  #28  
Old 16.01.2015, 13:20
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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The NZZ just published an article on this topic. UBS is predicting a "soft landing" for residential dwellings while a somewhat harder landing is expected for business properties. The paragraph under "Preiskorrekturen mφglich" summarizes the scenarios:

http://www.nzz.ch/wirtschaft/immobil...ver-1.18462347
I also wanted to mention this, read it in a low-level newspaper yesterday, but might be...

Actually I don't have much knowledge regarding real estate but there is also a factor that Russians are probably less likely to buy stuff in Switzerland at the moment. Not sure if it reflects on middle-income housing but I understand they were quite a factor on upper scale housing...

Btw, does anyone know/remember what happened to housing prices when they introduced the 1.2 cap three years ago? (I would kind of expect some reverse movement)
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  #29  
Old 16.01.2015, 13:46
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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If you have a deal, you have a deal, written, oral or whatever.
In my long search for that elusive farm house, I've had a seller pull out after having reached a hand-shake agreement to accept my offer (someone offered more money the next day) and one pull out after having agreed to the sale in writing but before the signing of the Vorverkauf (again, someone offered more money).

The sticking point - at least in SZ - is that until a Vorverkauf contract is signed, there is no (enforceable) deal. Although we had a verbal agreement in one case and a written agreement in the other, neither was sufficient to constitute a contract and the seller walked away without penalty.

If I remember other threads on the subject, in some cantons it might even be that a Vorverkauf is not binding until registered with the Grundbuchamt. (Too lazy to search for the thread...)

As a Swiss lawyer friend said 'When it comes to property purchase, a verbal agreement is pretty much worth the paper's it's printed on.'

As with everything in Switzerland but most especially property sale/purchase - YMMV by canton, Gemeinde, phase of the moon. So in this case, the OP needs to determine what constitutes a contract in his canton, and what if any penalties might apply if a contract is broken. The Grundbuchamt should be able to clarify.
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  #30  
Old 16.01.2015, 13:55
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

I have been agonizing over this buy/don't buy thing in Switzerland for a while now. Having bought and sold numerous properties in the UK over the years my conclusion is this.

Your home is typically the biggest and most used investment you have. It can bring you happiness or frustration every day you live there. If you love it and can afford to buy it, do so.

Over 6+ years you will not loose money in Switzerland, it may dip for 3-5 years as the UK did, but the limited supply of really good properties (many Swiss properties i have looked at are horrid/weird and dated by uk standards) will ensure it comes good over time.

Sadly i have not found the "I love it" place yet, but if i had i would buy it immediately.

...my rather devalued 2€ cents!
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  #31  
Old 16.01.2015, 15:17
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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I have been agonizing over this buy/don't buy thing in Switzerland for a while now. Having bought and sold numerous properties in the UK over the years my conclusion is this.

Your home is typically the biggest and most used investment you have. It can bring you happiness or frustration every day you live there. If you love it and can afford to buy it, do so.

Over 6+ years you will not loose money in Switzerland, it may dip for 3-5 years as the UK did, but the limited supply of really good properties (many Swiss properties i have looked at are horrid/weird and dated by uk standards) will ensure it comes good over time.

Sadly i have not found the "I love it" place yet, but if i had i would buy it immediately.

...my rather devalued 2€ cents!
I agree with this sentiment. we bought in september last year having spent a year and a half looking. It may drop a bit, but when it comes down to it, there is still an acute housing shortage so I think it will recover.
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  #32  
Old 16.01.2015, 15:40
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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If you have a deal, you have a deal, written, oral or whatever.

Would you be happy if the currency had gone other way and the seller pulled out ?

Any point in any deal there is an element of trust, and without this and saying yes, then pulling out is not nice.

A deal is a deal !
The point that is being discussed is whether an offer is legally binding or not. It is not. You are changing the argument to one of morals, and you may have a point there.

I have heard of many cases where an offer has been accepted, but then the deal can not be closed. It happens from both sides. Seller changes their mind, or the buyer gets cold feet. I also was trying to hi-light a potential scenario where the seller and buyer could both win if they talked.
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Old 16.01.2015, 16:03
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

I would agree that it's worth trying to re-negotiate if you are ready to accept that this might result in the seller refusing and backing out altogether - which is something I heard recently, though not in Switzerland.

I don't think it's fair for people to take the moral high ground here. The op had full intentions to buy. The removal of the euro-franc peg and resultant strength of the franc was a big shock for many, and really couldn't have been predicted. The op would now be paying 14% more than predicted. For the seller, I think it's unlikely he will get a quick sale, as it looks like the situation will cause a lot of unclearness and slow the market at least in the short to medium term.

On an aside, we bought our house 6 years ago in France with a chf mortgage as advised by the bank. We didn't stop to think much about it, as we earn in Swiss francs. However its true that if we needed to sell it now or soon, it would have to be in euros but the value of the loan has increased by over 25%. It will probably work out ok in the long run, but unfortunately as expats you're never really sure you'll be here for the long run. Previously I thought that if we needed/wanted to leave, we'd probably hold on to the house and rent out, but the rent wouldn't pay the mortgage, and the sale price probably wouldn't cover the outstanding mortgage. In retrospect, we should have perhaps thought more long term, despite the fact that a CHF loan is lower interest. Sorry for hijacking part of the thread!
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  #34  
Old 16.01.2015, 16:11
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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I don't think it's fair for people to take the moral high ground here.
I always get a laugh out of this one:
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Old 16.01.2015, 16:27
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

Mortgage rates have never been so low. I believe there at 1.4% guaranteed over the next 10 years.


At those rates, I'd buy.
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Old 16.01.2015, 18:55
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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Mortgage rates have never been so low. I believe there at 1.4% guaranteed over the next 10 years.


At those rates, I'd buy.
Oh yeah? First time buyers.................Names please.
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  #37  
Old 16.01.2015, 19:33
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

Don't buy now.
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  #38  
Old 16.01.2015, 19:49
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

If it was me I would have said that my savings are in GBP and that I would struggle buying at the new exchange rate. Maybe you get some discount and then decide if you can or want to afford.
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Old 16.01.2015, 20:28
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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If it was me I would have said that my savings are in GBP and that I would struggle buying at the new exchange rate. Maybe you get some discount and then decide if you can or want to afford.
Yes.

Just lets take another scenario that the GBP increased in value agianst Chf, to say Chf 2 = 1 GBP.

What would your reaction be if the seller said, well your tranfering GBP's now to buy my Swiuss house and your GBP's are worth 25% extra than they were, so can i increase the price of my house by something too ?

How or in which currency the deposit comes from is not really of any concern to the seller, he has a house in Switzerland being sold in Swiss franks, the price agreed hasn't changed to my knowldege.

I trade commodities, i agree on a deal with somebody, what happens after wards is of no concern, the price goes up, goes down, this week, next week, on delivery date, the deal is done, concluded and executed.

Sure you can try to back out of it by various underhand means, but morally you know it's not right and one day somebody will do it back to you; it's really not nice.
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Old 16.01.2015, 20:38
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Re: Bad time to buy property in Switzerland – following currency fluctuations?

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Yes.

Just lets take another scenario that the GBP increased in value agianst Chf, to say Chf 2 = 1 GBP.

What would your reaction be if the seller said, well your tranfering GBP's now to buy my Swiuss house and your GBP's are worth 25% extra than they were, so can i increase the price of my house by something too ?

How or in which currency the deposit comes from is not really of any concern to the seller, he has a house in Switzerland being sold in Swiss franks, the price agreed hasn't changed to my knowldege.

I trade commodities, i agree on a deal with somebody, what happens after wards is of no concern, the price goes up, goes down, this week, next week, on delivery date, the deal is done, concluded and executed.

Sure you can try to back out of it by various underhand means, but morally you know it's not right and one day somebody will do it back to you; it's really not nice.
GBP raising does not have to affect Swiss housing prices, but changes in CHF are more likely to. The OP is probably not the only person in Switzerland rethinking whether to go on with his planned purchase.

Morally... I am not sure it is wrong. I am the first person who would feel weird to ask for price change and if had my money in Franks, would most likely go on with the agreed price despite the feeling that I am knowingly wasting my money. But if had in GBP and did all my calculation according to that, would consider dropping out.

I have heard of many real estate deals being agreed and getting canceled. It is quite regular. And I think it is different to commodities. You are probably dealing with repeat customers.
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