Go Back   English Forum Switzerland > Help & tips > Housing in general  
Reply
 
Thread Tools Display Modes
  #1  
Old 20.10.2017, 19:29
Junior Member
 
Join Date: Oct 2010
Location: Zurich
Posts: 31
Groaned at 0 Times in 0 Posts
Thanked 37 Times in 15 Posts
Quafadas has no particular reputation at present
Buying a flat - off plan - valuation?

The abridged as much as I can story...

My pregnant girlfriend and I have decided to give up the bright lights of the city, and move 'out' of town. We have been fortunate enough to identify a housing project we think we're willing to commit to, we would be buying off plan, so the thing won't be ready until about Summer 2019 (we hope, it'll likely be delayed etc).

Financing this seems to be a bit tricky. My bank (postfinance) refuse to provide the necessary support (zahlungsversprechen), because they won't issue it when before you sign the contract, chicken and egg. I spoke to a young man there, who appeared to be somewhat inexperienced, so I don't know if this is a procedural blunder, a difference in risk appetite, or a potential problem with the project itself.

I've been in touch with 'Hypothek.ch', who note that they don't get involved in off plan financing.

The bank recommended by the developer, who I assume is financing him as well, is the Zkb (Zurich Cantonal Bank). We've been to their offices and gone through the documentation process for the project. The ZKB appear to be willing to support us in the transaction (I'm fortunate enough to have some savings to throw at the deposit).

I note so far I have no reason to doubt the integrity of either the project developer or the Zkb. However, at this stage I only have one opinion on the 'value' or 'fairness' of the purchase price.

So questions aside about timing in the housing market etc (probably not great), what I'm struggling with, is the valuation. The flat will be expensive to buy, but then stuff in Switzerland is expensive.

What worries me, is that I don't have a second data point or opinion on whether the price is 'fair' for such a project...

Is such a worry reasonable? Is there a way that anyone would know of to reach an Independent conclusion on the costs / reasonable market price off an off plan development? Can I simply trust the statement of the ZKB that the project is fairly priced? Is there an Independent service I could turn to? etc etc... opinions welcomed!
Reply With Quote
  #2  
Old 20.10.2017, 20:01
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 7,841
Groaned at 330 Times in 224 Posts
Thanked 10,926 Times in 3,799 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

I have a ZKB mortgage. Lenders work on a square metre value x location valuation, not a market one.

You are probably the best one to rate the value. Presumably you spent months if not years trying to find somewhere and have a feel for the market.

I wrote elsewhere here that I have been told for the last 45 years that I should have bought 10 years earlier as it was all about to go down the pan. I expect to hear that for the next 45 (ish)...
Reply With Quote
The following 2 users would like to thank AbFab for this useful post:
  #3  
Old 28.10.2017, 23:49
Newbie 1st class
 
Join Date: Sep 2013
Location: Lausanne
Posts: 11
Groaned at 0 Times in 0 Posts
Thanked 3 Times in 3 Posts
ismhad has no particular reputation at present
Re: Buying a flat - off plan - valuation?

I would ask at least 4-5 banks, some big ones (CS, UBS) as well as some smaller ones (Raiffeisen, Migros Bank, ...) to value the project in order to get a feel for the price. If they all value the project within their range then this should make you feel more comfortable.
Also look at how many of the apartments have already been sold/reserved? This could give an indication of the fairness of the pricing.
Note sure if some consultants / architects can value the project for you though.
Reply With Quote
  #4  
Old 29.10.2017, 00:05
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 19,104
Groaned at 392 Times in 297 Posts
Thanked 18,933 Times in 10,199 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

you don't know the actual price of flats sold. In the UK often large cash backs are given to get a high figure at the land registry
Reply With Quote
This user would like to thank fatmanfilms for this useful post:
  #5  
Old 29.10.2017, 08:40
Forum Legend
 
Join Date: May 2007
Location: Tessin
Posts: 6,162
Groaned at 122 Times in 89 Posts
Thanked 7,276 Times in 3,428 Posts
Mrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

We are selling houses off plan which will be ready in a year. Perhaps it is not the same as selling an apartment but it is not so difficult to work out the price.

The standard of finishing will affect the price. The banks have their tools to appraise the value. They look at similar propertes in the area too.

When borrowing money it can be easier to borrow against a new house as a buyer will not need to make large investments in repairs and renovations.

When buying off plan the question is how much money do you need to put down up front. This can be worrying especially if the project start date depends on them selling other units.You could face huge delays.
__________________

Reply With Quote
  #6  
Old 29.10.2017, 10:26
Blueangel's Avatar
Forum Legend
 
Join Date: Nov 2015
Location: Küsnacht, Switzerland
Posts: 3,888
Groaned at 105 Times in 96 Posts
Thanked 10,610 Times in 4,679 Posts
Blueangel has a reputation beyond reputeBlueangel has a reputation beyond reputeBlueangel has a reputation beyond reputeBlueangel has a reputation beyond reputeBlueangel has a reputation beyond reputeBlueangel has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

Quote:
View Post
Is there a way that anyone would know of to reach an Independent conclusion on the costs / reasonable market price off an off plan development?
Have a good search of the area you're buying in on this page...

https://en.comparis.ch/immobilien/mashup/show

It has the rental and sale prices of property over the last 5yrs.
Reply With Quote
  #7  
Old 29.10.2017, 11:06
robBob's Avatar
Forum Veteran
 
Join Date: Mar 2012
Location: Zurich
Posts: 2,419
Groaned at 45 Times in 32 Posts
Thanked 2,154 Times in 1,169 Posts
robBob has a reputation beyond reputerobBob has a reputation beyond reputerobBob has a reputation beyond reputerobBob has a reputation beyond reputerobBob has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

The big banks like UBS have special SW for this purpose. Location is the main factor. They can verify the price. As for a loan, try one of the insurance companies. Axa once gave me a good offer.
Reply With Quote
  #8  
Old 30.10.2017, 10:53
RTN RTN is offline
Forum Veteran
 
Join Date: Nov 2009
Location: Uetikon am See
Posts: 1,409
Groaned at 12 Times in 8 Posts
Thanked 1,575 Times in 705 Posts
RTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

I think it is not wise to commit to an apartment off plan, put politely. I work in the building industry and see a lot of problems here with this approach in todays market.

If you do some research about extra costs here it will open your eyes a bit.

Without knowing the area you are choosing it is difficult for us here to give you an opinion on "value" which is very subjective. The biggest problem is the advertised price is not the price you will pay, think of it like a car, no one buys a new car and selects zero options but the advantage is those options are listed with prices. In your dream apartment the prices for extras are not set or based on actual cost but more what the company (who has a monopoly) thinks they can get away with because the are the developer's supplier.

Further to this, what is shown as projected finishes and images can and will vary in the finished product, it is almost impossible for you to protect yourself from material downgrades in the common areas. Gardens images are shown with full grown trees but you only get small saplings is one example, you pay for the image but get something less which is hard to quantify.

The real estate market is flat or decreasing in value, I see nothing on the horizon to indicate more confidence coming back to it. Trump in the office and student loans in the US are just 2 things which could cause another GFC.
You will be pretty much locked in on forward pricing an apartment which by your own experience with the banks not offering finance off plan should be ringing alarm bells, even they with their experience do not want to predict what the price should be so they won't offer finance at this stage.

If your heart is really set on this apartment there is no real disadvantage to wait before committing, you have 2 years to find a better deal. In your situation with a family on the way I would only consider a finished apartment even if it needs a bit of renovation (which is tax deductible) as you know what you are committing to. In spite of what every one says, renovation has never been cheaper than it is today so don't write this off as a possible solution.
Reply With Quote
The following 5 users would like to thank RTN for this useful post:
  #9  
Old 30.10.2017, 11:22
Forum Veteran
 
Join Date: Mar 2010
Location: Greater Zürich Area
Posts: 921
Groaned at 119 Times in 76 Posts
Thanked 701 Times in 388 Posts
EPMike has an excellent reputationEPMike has an excellent reputationEPMike has an excellent reputationEPMike has an excellent reputation
Re: Buying a flat - off plan - valuation?

Quote:
View Post
In spite of what every one says, renovation has never been cheaper than it is today so don't write this off as a possible solution.
What do you mean by that? In absolute terms or relative to the price of an apartment?
Reply With Quote
This user would like to thank EPMike for this useful post:
  #10  
Old 30.10.2017, 12:18
RTN RTN is offline
Forum Veteran
 
Join Date: Nov 2009
Location: Uetikon am See
Posts: 1,409
Groaned at 12 Times in 8 Posts
Thanked 1,575 Times in 705 Posts
RTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

Quote:
View Post
What do you mean by that? In absolute terms or relative to the price of an apartment?
In absolute terms IMHO, the stronger CHF has bought material costs down and slowing new builds putting more resources back into the market, it doesn't mean every firm is re-pricing but more are willing to negotiate. I was given a guide book on quoting cost for a kitchen from 2001 by a friend (and we wonder why a lot of quotes are similar!), I asked if it was still relevant, my friend explained that prices have not really changed in that time. For example a 600w kitchen drawer with Blum slides was +/- Chf250, I can now buy a ready made to size Blum drawer for circa Chf125 but it has steel sides and a higher quality slide mechanism. High quality Parkette I paid Chf120m2 for 12 years ago (retail Chf190) I can get any day of the week for Chf90 now.
Reply With Quote
The following 3 users would like to thank RTN for this useful post:
  #11  
Old 30.10.2017, 13:57
Forum Legend
 
Join Date: Jun 2007
Location: Ticino
Posts: 2,876
Groaned at 91 Times in 63 Posts
Thanked 3,667 Times in 1,474 Posts
Snoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond reputeSnoopy has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

Quote:
View Post
In spite of what every one says, renovation has never been cheaper than it is today so don't write this off as a possible solution.
If you can do stuff yourself, probably. But the aggravation involved in dealing with tradespeople who expect work to fall in to their laps and then do the absolute minimum and cut corners...thanks, but no thanks. And I have found that it doesn't even matter if you are prepared to pay more and not take the cheapest offer...the aggravation is often the same.
Reply With Quote
  #12  
Old 30.10.2017, 15:44
Forum Veteran
 
Join Date: Apr 2007
Location: Zurich
Posts: 1,378
Groaned at 3 Times in 3 Posts
Thanked 759 Times in 465 Posts
axman has a reputation beyond reputeaxman has a reputation beyond reputeaxman has a reputation beyond reputeaxman has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

Quote:
View Post
The biggest problem is the advertised price is not the price you will pay, think of it like a car, no one buys a new car and selects zero options but the advantage is those options are listed with prices. In your dream apartment the prices for extras are not set or based on actual cost but more what the company (who has a monopoly) thinks they can get away with because the are the developer's supplier.


I agree, so you need to add up to 5% of the off-plan price for these additional costs to get the place the way you want it. If you are very careful, you still need about 2-3% I would say. But main thing is to be aware that there is this cost to think about.


Some things can be negotiated if you manage to figure out who is doing the installation work, etc.. But most of the time you have no choice, eg. things that really need to be built-in, like electical sockets. This is where they really push prices up.
Reply With Quote
  #13  
Old 30.10.2017, 18:18
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 7,841
Groaned at 330 Times in 224 Posts
Thanked 10,926 Times in 3,799 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: Buying a flat - off plan - valuation?

Quote:
View Post
I agree, so you need to add up to 5% of the off-plan price for these additional costs to get the place the way you want it. If you are very careful, you still need about 2-3% I would say. But main thing is to be aware that there is this cost to think about.


Some things can be negotiated if you manage to figure out who is doing the installation work, etc.. But most of the time you have no choice, eg. things that really need to be built-in, like electical sockets. This is where they really push prices up.
I've bought off plan twice in Switzerland and would say the 10 to 15% above the list price is normal/reasonable...
Reply With Quote
The following 2 users would like to thank AbFab for this useful post:
Reply

Tags
housing; offplan; zkb




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Buying 'off-plan' NickGB Housing in general 17 03.04.2017 21:50
Buying a flat off-plan from a small company lana Housing in general 14 27.04.2016 16:58
Buying off plan sufficient for residency? Ricard Housing in general 13 03.12.2014 19:34
Bank property Valuation vs Realtors valuation what's the difference? milfordred Housing in general 12 03.05.2013 07:43
Buying house - need advice on valuation witit Housing in general 12 29.04.2009 00:52


All times are GMT +2. The time now is 07:53.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0