The "Buying a house in Switzerland" thread

[bigblue2]

This is the thread where we'll document our trials and tribulations of buying a house here, no hearsay, rumours, I heard it from a mate etc.

So we found the (almost) perfect house for us, we want a detached farm house, the older the better, with views etc we used the usual resources to look (homegate, papers, friends in the know etc), for obvious reason I wont post the house up here until its a done deal, don't want any of you vultures guzumping us

First things first, deposit. We have the 20% in cash, but the plan would be to use some of my pension too as the place needs a little work and I want a new garage built too.

We have an appointment with the bank for a mortgage, they have asked to see various documents about the house which the seller has provided us with.

Its not through an agent, don't know if that will make the whole process easier or harder? (it made it a lot easier in the uk for me)


update 20/10

Been to some banks, all of them agreed to give us a mortgage no problem at all, then got into a mini bidding war over interest rates, family discounts, free first payment etc very unexpected and welcome

I think it helped that they could see we had done our homework and had all (in fact more then they wanted) documents they needed.

so next step is haggling with the owners and getting a quote for the work we want done. Which is happening tomorrow. At this rate it'll be ours by christmas (have I just jinxed this now??)

so far the process has been a million times easier then buying in the uk

Update 17/12/2010

New update,

House sale is supposed to complete next week, notary has just called to query why we say the asking price is X but the contract sent to him says X-8000, we paid a 10k deposit but the owners have told him we only paid 2k (we have proof of the 10k) now I know the owner is doing this to limit the amount of tax he is going to have to pay, but WTF! is it really worth his time lying on legal forms to save the tax on 8k??

This is the same owner who wanted me to pay him 40k in cash.

Notary says he will sort it out

Update 22/12/2010

We are now home owners again, went to the bank yesterday and had to sign about 6 forms in duplicate, the bank then took us to the notary who went through the contracts with the sellers and there solicitor in german and english, took about an hour, then signed 10 or so copies of the contract and got the keys, all sorted. now the fun begins

[justbeingme]

Here is some of my personal stories so far of trying to purchase a house or a flat.

We have been looking for about a year and a half with no success for in Bern. We are only looking for houses or flats close or in Bern. Unfortunately, there are so few houses or flats available in the market, that competition is fierce in trying to purchase a house.

So far we have seen the following:

1) A house in Ostermundigen (105 m2) with needs significant work with offers of 800,000
2) A house in Liebefeld (110m2) with offers of 900,000
3) New build flats going for 1,000,000!!
4) 2 to 3 old flats ranging from 480,000 - 750,000 (one was really bad, and the other a bit two pricey)
5) A run down house needing at least 300,000 CHF repairs, going for 690,000 CHF

We currently have more than 300,000 CHF in our bank, and even still we can only get a mortgage for 800,000.
I find this frustrating in getting a mortgage from swiss bank.

First off, the bank (UBS, Cantonal Bank, Post) want 20% down of the mortgage. But the problem which happens, is the price you offer to the owner of the house, and the value of the property can be significantly different.

For example, we find a house say has offers 850,000. But the bank values the house at 600,000. They will give the mortgage for 600,000, but we would still need to cough up (850,000 - 600,000 = 250,000). We would need to have 250,000 + 120,000 for the mortgage!

This makes it difficult in purchasing houses, but not new built flats. Old houses, are significantly valued less than new built buildings, because the bank considers you need to renovate, fix and repair the house.

But new built flats are extremely expensive, but the bank will most likely allow a mortgage for the entire price. Why? Because the banks have the fingers in both pies. They have given a loan to the builders of the building. And now the builders want to sell the flat. And now the bank wants to recoup the money, so they are very willing for you to buy the flat.

Moreover, in Bern, and most likely in the other cities, you may see new built flats which have a reasonable price. Unfortunately, that most likely means, the flat has a yearly lease (Baurechtzins), which we have seen ranging from 3000 - 7000 CHF per year.

One of the most annoying thing I find, is the two offer approach. If you want to purchase a house, you go for a viewing, and then within a couple of weeks you provide an offer for the house. The owner or the agent, will take the top 5 (e.g.) offers, and now you can make second offer. This second offer, needs to also provide documentation from the bank that you have the funds to purchase the house.

What I have found, is the bank (I don't know why) let's you know about the offers in the first round, if the other bidders are using the same bank. So in effect, you are expected in the second round, to increase your offer.

As you can see I am just frustrated in purchasing a house, when we have I believe a lot of money sitting in the bank?
There must be a way to purchase a property, but we are reaching the point, that we may consider moving back to my home country where we could definitely be able to purchase something.

BTW, this is our first time of buying a house, and I am not sure how difficult is to purchase a house outside of Switzerland, but I am sure it is a lot lot easier than here.

[NotAllThere]

We bought our house in 2007 in Binningen, after 2 years of looking. There was a lot of interest in the house as it had been recently refurbished, and was at a good price - the owners had not had the house long, and so could not sell for more than they'd paid + the expenses of refurbishment - and they'd bought it cheaply themselves.

They chose us above the rest, because

a) We didn't offer money under the table
b) We had our children look around before we made a decision
c )They were moving next door, and so we'd be neighbours
d) They liked us as a family

It even worked out on the moving dates as they wanted out end of February, and our rental contract finished end of March. All very serendipitous.

We put down 15% deposit in cash, and about 15% pledged against my 2nd and 3rd pillar pensions. Using the ubs mortgage calculator this shows that it is entirely affordable to us.

We eventually went with BLKB for the mortage, as they offered us the deal we liked best. The manager (Pratteln branch) was very helpful, and explained this really clearly. There was no problem with the valuation. He said normally he'd require us to have our current account with them, but as they don't offer online banking in English, he waived that requirement.

It was a private deal between us and the owners. Their solicitor drew up a contract. We took it to ours, who recommended a few changes, which were implemented. Then we took a translator friend with us to the notar, met with the vendors, and signed the contracts. After that it was just a question of putting cash into various accounts at the right time. MUCH simpler than the process in the UK.

[meloncollie]

I'm green with envy that you've found your farmhouse!

We, too are looking for that isolated farmhouse with a good chunk of land. We want to stay in SZ, but in 4+ years of searching, have had no luck. At issue is the BGBB, which restricts the sale of Landwirtschaft properties to non-farmers. Non-BGBB properties larger than postage stamps are few and far between.

Property prices in this area have risen massively - the only property with a large enough garden currently available is according to the bank priced at double it's value. The bank will not take into account the recent property price rise when considering lendable value, as they consider this an unsustainable bubble. The sellers are of course firm on their price as well.

This means that, as in Justbeingme's example, the bank will finance 50%, we would need to come up with 30% downpayment on the sale (not valued) price, plus the remainder. And then there are the renovations to be considered - all in all, on such a property you are looking at needing well over a million in ready cash upfront.

Also, there is no concept of a property sale chain here, as there is in the UK and US. So, the for time between when I buy my new home and sell my old carrying two properties will be painful.

The question is: is it worth it?

Given that the 28 Nov. referendum could cause SZ property values to tank, my own feeling is that now is not the time to be buying in the area.

----

The house we currently own was purchased 6 years ago, when the market was not quite so competitive. The purchase went fairly smoothly (well, aside from the agent lying though his teeth, the Bauamt assuring us that there were no impediments to our renovation plans then turning around and refusing permits, my husband being transferred to New York the day after the offer was accepted, and a few other assorted headaches...)

Do be careful of last minute demands by the seller. If you are signing a Vorverkauf, do so with the Gemeinde notary so that is is official. Make sure that everything is spelled out - i.e., 'we promise to purchase property X, as defined by the Grundbuch number 123, on date Y for CHF Z. The seller promises to sell property X, as defined by the Grundbuch, number 123, on date Y for CHF Z.' If you are putting down a deposit (our sellers required 10% of the purchase price), be sure to get in writing the conditions on which you might lose that deposit, or get it back.

I would strongly recommend getting a lawyer to review your contract; your bank can recommend someone if needed. Their interest meshes with yours here, so I'd trust their recommendation in this case.

An issue to watch out for is making sure that the seller pays his tax on the property sale in full - because you as the new owner will be held liable if he defaults. (If your seller is leaving Switzerland, be very careful here.) The Gemeinde notary walked the sellers down the hall to the tax office to take care of this when we completed our contract - others set it up so that a portion of the sale price is put directly into an escrow account to pay the taxes. Either way, discuss this with the Gemeinde notary well in advance of the contract signing - you need to make sure the seller doesn't pull a fast one. (Happened to a friend of mine - he was left on the hook for about 5 figures, payable in 30 days thank-you-very-much.)

Best of luck to you - soon you'll have the home of your dreams.

.

[Odile]

Remember that each K/Canton has its own rules re selling to foreigners- so it is difficult to have a thread about 'buying a house in Switzerland'. Prices vary hugely too - our ginormous 16C Vicarage with a big garden and 2 large fields was the same price as a 2 bed flat in Geneva or Zurich (possible quite a bit less).

[bigblue2]

	Quote:	meloncollie
	Given that the 28 Nov. referendum could cause SZ property values to tank, my own feeling is that now is not the time to be buying in the area.

The what?? whats that about then?

[Mark75]

	Quote:	bigblue2
	The what?? whats that about then?

It's an initiative for minimum tax rates for taxable income above CHF 250'000/year and taxable assets above CHF 2'000'000. Places like Freienbach SZ or the Canton of Zug would have to raise tax rates significantly.

Here's a link to the Socialist Party's website: http://www.sp-ps.ch/index.php?id=5
...and the committee against the initiative: http://www.steuerinitiative-nein.ch/de/home/

[bigblue2]

	Quote:	Mark75
	It's an initiative for minimum tax rates for taxable income above CHF 250'000/year and taxable assets above CHF 2'000'000. Places like Freienbach or the Canton of Zug would have to raise tax rates significantly.

ah, well that wont affect me then (unfortunatly )

[dodgyken]

Here is my experience of buying:

1) Have a place suggested to us
2) Look at 2 houses
3) Look at 1 house for the second time
4) Make offer of asking price
5) Have offer accepted
6) Goto ZKB and CS
7) Have good experience with ZKB. Go with them because they will structure the deal according to how we would like
8) Pay deposit
9) Agree moving date
10) Sign papers
11) Move in a few days early

Admittedly post move wasn't quite so great. He hadn't removed, or made any effort to remove animal urine smell - and so a lot of time and money was spent doing this ourselves - which caused much heartache and "WTF are we doing?" conversations - and arguments!!

However the house is now feeling more like home - even though we are only there 2 weekends in 3. We have had the balcony refurbished by the local timber man - and he has done a great job using single length pieces of wood.

We have spent a lot of time in the garden clearing back a decade of "Letting it go wild" and starting to get a feel for what we can do. And we have got halfway through decorating one of the (many) rooms that needs to be refreshed.

It is a "lifetime" project - but I enjoy the time up there doing things that I don't get to do in my daily job.

[Karl]

We bought a house a year ago. After looking at the ridiculously priced houses in and around Zurich, we started browsing Kanton Aargau in homegate.ch
After a few underwhelming houses, I found one that said "this is it" the minute I walked in. House is 19 yrs old, fully renovated, solid as a rock with all the Swiss accouterments: bomb shelter, built out attic and cellar, underfloor heating, quiet, sunny with mature grape vines and 2 meter hedge. Near to everything we want. So, we go to ZKB, get a 5yr mortgage for 2.3%, plop down about 50% (the house costs half of what it would around Zurich) agree on moving date with owners, buy half their fixtures very cheap as they were nice and they didn't want to hassle with dismounting them anyway. Sign papers at public notary. Go to "handover the key ceremony", shake hands, received a loaf of bread and bag of salt (some kind of tradition they said), and moved in!
A year later...everything hunky dory, nice house, nice dorf, kids have new friends already. I have 35 minutes to work, my wife 20 minutes. 700CHF/mo mortgage payments, everything hunky dory. Much easier than I thought it would be.

[meloncollie]

	Quote:	Mark75
	It's an initiative for minimum tax rates for taxable income above CHF 250'000/year and taxable assets above CHF 2'000'000. Places like Freienbach SZ or the Canton of Zug would have to raise tax rates significantly. Here's a link to the Socialist Party's website: http://www.sp-ps.ch/index.php?id=5 ...and the committee against the initiative: http://www.steuerinitiative-nein.ch/de/home/

	Quote:	bigblue2
	ah, well that wont affect me then (unfortunatly )

It's the repercussions from changing the tax rates that worries me, as an average taxpayer and homeowner, and soon to be seller and buyer.

Property prices reflect the desireability of the area, tax rates currently are a factor in that assessment. (Hence the massive price rise in the Steuerparadis cantons.) By suddenly taking away the tax advantage, will the Canton Congo still be a desireable place to live? Or if there is no tax advantage anymore, properties in high tax, low price towns closer to the city may become more attractive, meaning more competition - and thus higher prices - for those areas.

My take (and bearing in mind that this is only my gut instinct) is that given the over-heated market in some areas, and the possibility of fundamental change to an important market factor, there is too much uncertainty at the moment to buy in those areas. I've decided to stop house hunting, at least until after the referendum.

[70sKitch]

I found the two big banks (CS and UBS especially) reluctant to value the house I bought at the price I was paying. However, Kantonalbank said they knew the local market well, had no problem with the valuation, and lent me the money at a very good interest rate, so I suggest you try them.

I was told property prices are stable in Switzerland, but I bought to live in rather to invest so didn't really have a problem with that. I was recently delighted to find that after 4 years my house has probably more than doubled in value - not that I'm selling!

I don't expect the value of my house to 'tank', regardless of how the referendum goes, but I don't think the recent increases can continue. I expect them to be sustained though.

[tesso]

We bought a bungalow 2 years ago.(in Zurich)
Seen it on Saturday morning went by ourselves Sat. afternoon to mooch around.
Sat evening phoned the seller (who told us we were to late already had 3 buyers, but if anything didnt work out he`d be in touch)
Monday morning he phoned at eight o clock to say other buyer hadnt confirmed that he had a morgage, the other 2 on the list hadnt answered the phone( at 7oclock on a Monday morning) so it was for us.
Monday afternoon 2oclock had the key in my hand.
3weeks later went to the notariat all finished.
By the way the Bank said that we got the house nearly free, as the land was worth nearly what we paid

[dodgyken]

The kantonalbanks are far happier to lend on mortgages at the moment. Neither CS or UBS appear to have the appetite - and aren't being too helpful with their valuations. In our case ZKB called SGKB who just said "That sounds about right" for the market value.

[tesso]

The post or the insurances are giving out the best deals

[ljm]

Here are some of my personal stories so far of trying to purchase a house or a flat.

We were looking for about 4 years and a half in or around Geneva. We saw over 50 houses we know the local market fairly well. To make a long story short, houses here are ridiculously overpriced. If you think that Zurich is expensive, it is actually reasonable compared to Geneva. A small three-bedroom house with a tiny garden costs at least 1.2 million in La Cote (places like Rolle or Morges) and the same in Geneva will set you back for 1.5 million or more. When I say small I mean around 600m3. I learned that in Geneva it is not the number of rooms or square meters that counts, it is the volume that gives you the accurate picture or how big a house is. A decent family home should have at least 750-800 m3.

The banks were very happy to provide mortgage for houses that cost up to 1,200,000. We actually never wanted to borrow more so I do not know if they would have been happy to give us more. With no exception (we talked to UBS, CS, Cantonal Bank, PostFinance) they valued the houses we showed them at their asking prices. They all wanted to see proof that we had the 20% downpayment.

Three times we came close to buying (once an off-plan flat, twice existing houses), every time the banks gave us a nod -- but we never bought and have now stopped looking.

Why? Everybody was telling us that having a house is important, that we throw money on rent, that mortgages are really cheap at the moment. Yet for us the deal always seemed unreasonable. We are currently renting a 3-bedroom flat in central Geneva. We figured out that, in order to justify buying over renting, we would either have to find a comparable flat that will cost approximately the same per month or pay more in mortgage for a house in a good location with a garden and at least one extra bedroom but with some commuting involved (either in Geneva suburbs or in Vaud).

We could never see that happening. When we add up the interest, amortisation and associated costs, the rent always ends up significantly lower than mortgage even at current interest rates.

In the meantime house prices in Geneva continued to rise. A house that we saw in 2006 for 950,000 is now on the market for 1.4 million. Do I feel sorry about not buying it back then? No. When we looked at it in 2006, planes were landing over our heads so we could barely hear what the agent was telling us. Even if its monetary value significantly increased, putting up with airplane noise was not worth it.

[bigblue2]

I don't understand how renting can be cheaper for you?

Our rent is 2600 pm excluding all bills, on top of that we have to pay for another parking place (150)

If we buy it will be 1000pm mortgage plus bills, so I've already saved 1750, the house is bigger then our appartment, we'll be able to do exactly what we please when we please (no neighbours) and won't have to worry about our son or dog damaging the place.

on top of that with interest rates the way they are the money I have in the bank is just dead at the moment.

ok I'll pay more tax, but I think the trade off is worth it.

[jaudi]

The interest and amortisation on 1.2m with minimum deposit are very different from that on 450,000 bought mostly with proceeds from another house sale.

nice place, BTW Bit remote....

[Karl]

	Quote:	bigblue2
	I don't understand how renting can be cheaper for you? Our rent is 2600 pm excluding all bills, on top of that we have to pay for another parking place (150) If we buy it will be 1000pm mortgage plus bills, so I've already saved 1750, the house is bigger then our appartment, we'll be able to do exactly what we please when we please (no neighbours) and won't have to worry about our son or dog damaging the place. on top of that with interest rates the way they are the money I have in the bank is just dead at the moment. ok I'll pay more tax, but I think the trade off is worth it.

Don't forget the lost interest on the downpayment, additional insurance (fire, water damage), the extra tax you will have to pay for "eigenmietwert", extra costs for maintenance, usually estimated at .5% to 1% of the purchase price per year, and your 1750 savings figure will be halved, at least.

[Kittster]

Reading all these stories of it taking so long and being outbid and stuff has me worried because it was nothing like as complicated for the flat that my father bought for me (I will pay rent, just not insane rent, sorry, no spoilt rich kid here). Add to that the old adage that any house / development that makes it on to the free market is a bit of a dead duck and I'm getting worried...

Basically for me it was:

• get given price range in which to seek, with a preference for a new build (November 2009)
• hunt high and low in Zurich City, get increasingly frustrated at morons paying twice of what the places are really worth (or were worth two years ago)
• get tip off from friend that there is a project just on the borders of Oerlikon
• realise that I can't move in until 18 months later (January 2010)
• more fruitless hunting in Zurich itself
• see that flats in the proposed project are selling fast, go look at the surroundings, get a good feeling, instruct finance department that I've found what we want and that we have to move fast (first week of February 2010)
• downpayment is made, stuff is signed, last minute change to buy one floor up (second week of February 2010)
• signing with notary etc. (mid-March 2010)
• choosing all the fittings, deciding on sockets etc. (mid-April to May 2010)
• wait and hope that it was a good buy, hopefully soon allowed to go see the "Rohbau", I'm sitting on hot coals to finally get a feeling for what the thing that was bought will look like!

What I have learned - if you want something that is already fit to move into right now, you will pay quite a bit over what the place is worth. The last flat for where I'm moving to was sold in May, so more than a year in advance of moving in. Other places going up have sold out 18 months in advance, despite the plans and price not being great IMO. The low interest rates and difficulty of finding a reasonably priced apartment in Zurich together with ever rising rent prices has lead to a bit of an "own home" frenzy.

I said to my dad, if he had thought of buying two or three years ago, it would not have been such a problem to get something in town that costs what it was actually worth. But I am very excited about this new project and look forward to upgrading my standard of living by about 300%, even if my commute into town will be twenty minutes longer than it is now (i.e. eight minutes on foot to Hauptbahnhof).

Buying an old house has MANY caveats in Switzerland, a) getting it and b) being allowed to do ANYTHING to it. My mum owns a 250 year old farm house and it's a nightmare when it comes to renovations. The amount of money that was invested is mind-boggling and the number of forms and stuff to complete surreal.