Are you new to the property market and about to buy your first house? With such a complex process, it can feel like a jungle to navigate. From assessing your needs to financial considerations, there's a lot to take into account.
The fear of making the wrong choices can be overwhelming. That's why it can be crucial to seek advice from experts like Bomae. Our buyer's advisers guide you through the process, provide insight and support, and can even help with communication with the bank.
Let us help you make the right decisions on your home-buying journey
What should first-time house buyers prioritize? Research the market, take your gut feeling seriously, and be realistic.
In this buyer's guide you can read about:
- Good things to consider when looking at houses
- Preparing before buying a house
- The purchase process itself
- Legal and financial considerations
- After buying the house
- Get buyer's advice from Bomae
Good things to consider when looking at houses There are several factors that you, as a first-time house buyer, should keep in mind. For example, you should always research the market thoroughly and not make hasty decisions. You might also consider the following:
- What three things are at the top of your priority list for your future house? (Is it, for example, location, the size of the house, the surroundings, etc. that matter most to you?)
- Should there be room to extend if the house becomes too small for your needs?
- Is the area attractive? Perhaps an attractive new neighborhood is being built nearby, or infrastructure is being improved. Both of these factors can play a positive role in increasing the value of the house. Conversely, it can have a negative effect if there are plans to build a major road in the area or similar.
- What does your gut feeling say? Do you feel comfortable in the house and the area, and can you see yourself living there? This is an incredibly important factor that should not be underestimated.
- Once you've found a house you're considering, bring a tradesperson along to inspect the house and give an estimate of what it would cost to make the improvements you want.
Preparing before buying a house Before you start buying your dream home, there are some things you need to consider and prepare for. Here are some important points to take into account:
Make a realistic budget plan
Before you start looking at houses, you should take the time to make a realistic budget plan. This involves assessing your current financial situation and setting a price limit for how much you can afford to pay for your new home.
There are several factors that come into play when the bank assesses how much house you can buy. Among other things, they look at your age, income, debt, disposable income per month, and the down payment you can pay in cash — in other words, your own equity contribution.
A rule of thumb says you can buy a house for 3.5 times your income before tax. There can be significant individual differences from person to person, though. But how much should you ideally be able to put down? Here's another rule of thumb: you should be able to pay 5% of the house price in cash. This, however, is only the minimum requirement from the Danish FSA (Finanstilsynet), so in reality it can be 25% or higher. The 5% minimum requirement was introduced at the end of 2015, but before that it was actually possible to buy a house without being able to put down any cash at all.
It is not permitted to borrow the money for the down payment, so it must either be money you've saved up over time or a monetary gift of some kind. However, it is possible to draw on your overdraft facility (kassekredit) at the bank if you already have one, but it's clearly preferable to be able to put the money down in cash yourself.
When working out how much you can put down for the house, also remember that you are responsible for paying external costs yourself. External costs include, for example, the ejerskifteforsikring (change-of-ownership insurance), registration of the deed, and an external/legal adviser such as Bomae. Budget around 50,000 kr. for external costs (this amount will often be different when buying a privately owned flat, as you won't, for example, pay change-of-ownership insurance, but will instead pay other fees to the owners' association).
Look for the right location
When buying a house for the first time, it's important to look for the right location. The location of your home can have a major impact on your lifestyle, so it's important to find a place that suits your needs and wishes.
One of the first things you should consider is whether the location fits your lifestyle. If, for example, you work in the city, you might want to find a place close to public transport or close to your workplace. If you have children or plan to have children, you might want to find a place close to schools or parks.
Another thing to consider is whether the location fits your future plans. If you plan to stay in your new home for many years, you might want to find a place close to family and friends or in an area you really like.
Finally, you should also look into the local community and neighborhood before making a decision. It can be a good idea to take a walk around the area and see what it's like. You can also talk to neighbors or local businesses to get a sense of what the local community is like.
In short, it's important to find the right location when buying a house for the first time. By considering your needs and wishes for your lifestyle and future, you can make an informed decision and find a place you will really enjoy living in.
Consider your long-term goals
When buying a house for the first time, it can be a good idea to consider your long-term goals. Owning a house can be a major investment, and it's important to think about how your goals and plans might affect your decision.
One of the first things you should consider is how long you plan to stay in the house. If you only plan to live in the house for a couple of years, it might be a good idea to consider a house that will be easy to sell or rent out when you move. If, on the other hand, you plan to stay in the house for many years, you might consider investing in renovations or extensions to make the house more functional and comfortable.
It's also important to consider your future plans and goals. If you're planning to start a family, it might be a good idea to find a house with extra space or a garden for the children to play in. If, on the other hand, you plan to work from home or run a home business, you might consider a house with an extra room or office space.
Another thing to consider is your financial goals and situation. It can be a good idea to talk to a financial adviser or loan provider to find out what you can afford and what to expect financially when buying a house. You should also consider what would happen if your financial situation changed, for example if you lost your job or became ill.
In short, it's important to consider your long-term goals when buying a house for the first time. By thinking about what you want to achieve in the long run, you can make an informed decision and find a house that suits your needs and wishes, both now and in the future.
Find the right estate agent
Finding the right estate agent can be crucial when you're a first-time house buyer. An experienced and reliable estate agent can help you navigate the process and give you valuable advice on what to look for in a house.
A good estate agent will first and foremost listen to your needs and wishes for your new home. They will then help you find houses that match your criteria and budget. They will also be able to give you valuable insight into the various neighborhoods and areas you're considering buying in.
An estate agent will also be able to help you negotiate the price and terms of the purchase, so you can secure the best possible deal. They will also be able to guide you through the paperwork and ensure everything goes smoothly and correctly.
Another important factor is that a reliable estate agent will be able to identify any issues with a property that you may have overlooked yourself. This can include problems with the property's structure or maintenance, which could result in high costs later on.
In short, an experienced and reliable estate agent can be an invaluable resource when you're a first-time house buyer. They can help you make an informed decision and avoid any regrets later on.
Get a thorough inspection of the property
A thorough inspection of the property is an important part of the process when buying a house for the first time. An inspection can help identify any problems or hidden costs that you might otherwise not have discovered.
An inspection can focus on different areas of the property, including the roof, foundation, plumbing systems, electrical systems, and more. An inspector will thoroughly examine these areas and provide a report on any issues or concerns.
A thorough inspection can also help negotiate the price and terms of the purchase. If problems are discovered during the inspection, you can use it as a bargaining chip and ask for a lower price or better terms.
It's important to remember that the inspector will only examine visible areas and report on any issues they find. There may be hidden problems or costs that can't be detected without removing building materials or carrying out more extensive tests. It can therefore be a good idea to talk to the inspector and ask for their recommendations for further investigation if there are any concerns.
In short, a thorough inspection of the property can be a crucial part of the purchase process. It can help identify any issues and ensure you make an informed decision when buying a house for the first time.
The purchase process itself Once you've found your dream home and had a thorough inspection of the property, it's time to move on to the purchase process. Here are some important points to be aware of:
Entering into the purchase agreement
First and foremost, a purchase agreement must be entered into between you and the seller. The purchase agreement must contain the key terms of the purchase, such as price, handover date and any conditions. It's important to have a clear and precise purchase agreement to avoid any disputes later on.
Reviewing the deed and registration
Once the purchase agreement is signed, a skøde (deed) must be drawn up, transferring ownership of the property to you as the buyer. The deed must be registered in the land register (tingbogen) so it becomes part of the public record of ownership. It's important to have the deed and registration in order to ensure you become the rightful owner of the home.
Buying change-of-ownership insurance
It can be a good idea to buy an ejerskifteforsikring (change-of-ownership insurance), which covers any hidden damage or defects in the home that were not discovered during the viewing. This can give you peace of mind and financial security in the event of unexpected repairs or problems.
Financing the home
If you don't have the money to pay for the home in cash, you need to have a financing plan in place. This could be a bank loan, a mortgage credit loan, or a combination of several loans. It's important to explore your options and get clarity on interest rates and loan terms so you can make the right choice.
Getting a condition report and electrical installation report
It's also important to get a condition report and an electrical installation report, which can give you an overview of the home's condition and any electrical issues. These reports can also give you a better overview of any repairs or improvements that need to be made after the purchase.
Handover of keys and documentation
Finally, make sure all keys and documentation are handed over to you upon taking over the home. It can be a good idea to make a list of everything that should be handed over, so you can be sure you have everything you need.
By keeping track of all these points in the purchase process, you're better equipped to carry out a successful purchase of your dream home. It can also be a good idea to have an independent buyer's adviser.
Legal and financial considerations When buying a house, there are also some legal and financial considerations you need to take into account. Here are some important points:
The home's condition report
As a first-time buyer, it's important to review the home's condition report and have a clear understanding of any repairs or maintenance that need to be carried out. A condition report will typically contain information about the home's condition, including whether there is damage or defects in the property. It's important to have a good understanding of the condition report, as it can affect the price or your decisions about buying the home.
Conditions in the purchase agreement
If there is anything in the home's condition report that raises concern, you can choose to include conditions (forbehold) in the purchase agreement. A condition could, for example, be an investigation of a specific part of the house or a specification of repairs that must be carried out before you take over the home.
Debt and easements
It's also important to check whether there is any debt or easements (servitutter) on the property. Debt can affect the price of the home or your ability to obtain financing, while easements can affect how you can use or alter the home. It's important to check these factors before you buy the home.
Home buyer protection
As a home buyer, you are protected by a number of rules that ensure you are not subjected to unfair practices or poor terms. Home buyer protection includes, for example, requirements that the seller must give you certain information about the home before you buy it, and requirements that you have the right to withdraw from the purchase within certain deadlines.
Finances and financing
Finally, it's important to have your finances and financing in order before you buy a home. It can be a good idea to get advice from a financial adviser or bank who can help you find the best financing solution for your needs and options.
By taking these legal and financial considerations into account, you're better equipped to make the right decisions about your home purchase and avoid unexpected costs or legal problems later on.
After buying the house Once you've bought your house, there are still some things you need to be aware of and take care of. Here are some important points:
Insurance
It's important to have good home insurance that covers any damage or accidents that may occur. Check your insurance and make sure it covers your needs and is up to date if there are changes to your home or its contents.
Maintenance and repairs
As a homeowner, it's your responsibility to maintain and repair your house. It's important to have a good understanding of what's required to keep your home in good condition and to carry out repairs when necessary. Keep an eye out for potential problems and address them before they become bigger and more costly.
Energy consumption and efficiency
It can also be a good idea to look into your home's energy efficiency. There may be opportunities to save money on electricity and heating bills by making your home more energy efficient. Consider getting an energy label for your house and look into whether there are opportunities to install more energy-efficient appliances or better insulate your home.
Building permits and renovations
If you want to renovate your home or build an extension, it's important to be aware of any building permits and regulations that apply in your area. You can contact your municipality or a building inspector for help navigating these regulations and ensuring your plans are legal and meet the necessary requirements.
Home value
Finally, it's important to keep an eye on your home's value and the market in general. This can help you make decisions about any renovations or a future sale, and ensure you have a good understanding of your home's financial value.
By taking these factors into account, you can help ensure your home stays in good condition and continues to bring you enjoyment and value in the years ahead.
Get buyer's advice from Bomae At Bomae, we're ready to help you by providing buyer's advice. Our buyer's advisers represent only the buyer, and therefore work solely to ensure the buyer gets the best terms and the right price on the upcoming home.
Fill in the contact form so we can talk about how we can help you with buying and financing your home.
