Do real estate clients often buy real estate on credit? What does it depend on – the price of the apartment or house?
The most part, as much as approx. 80 – 90 percent of real estate transactions are carried out with the help of a loan. The purchase of a real estate in the form of a plot, flat or business premises is still a luxury that the average person cannot afford.
The purchase of even a small apartment is an expense exceeding the wealth of accounts not only for young people. Getting a loan to buy a property is sometimes the only way you can get a roof over your head.
Real estate prices are obviously a factor that strongly influences the decision to buy on credit. However, sometimes it happens and such a situation that taking a loan in a bank is cheaper than spending own funds, which is another sector that may bring higher profits.
What are the disadvantages and advantages of buying on credit?
The advantage of buying a property financed with a loan is one basic. You can buy a property without having accumulated its own funds. An additional advantage is that it is not burdened with a mortgage and can be sold at any time.
The disadvantages of buying a property on credit are several. The negotiating power of money is a huge asset. The property owner, when agreeing on the terms of the sale transaction, agrees to lower the price faster and easier when he hears about cash payments.
When crediting a purchase, there is also a risk of not receiving financing from the bank. When signing the preliminary contract, the buyer pays a deposit, which in the event of no credit is lost. Deciding to commit your own contribution in such cases is therefore very difficult and risky.
How does the transaction go if the buyer takes a loan?
Is it taking longer or do more documents need to be completed? The property sale transaction with the participation of a bank loan extends over time and is divided into two phases.
Two agreements are signed: a preliminary sale agreement and after the buyer obtains the loan, the final agreement is signed. Bank formalities take 4 to 8 weeks to complete. When paying in cash, you can immediately sign the sales contract after agreeing on the transaction terms.
The documents to be completed and prepared for this task are the same in both cases. Additional documents that buyers in a bank must have are documents confirming their creditworthiness. After signing the loan agreement with the bank, they submit it to the notary’s office when signing the promised agreement.
When does the buyer become the owner of the apartment?
In both cases, when buying a property with a loan or cash payment, the buyer becomes the owner of the notary upon signing the notarial deed. Is it worth signing a preliminary contract pending a loan?
When we find the dream property, which sometimes requires a lot of time, stress and nerves from buyers, everything should be done to reserve this property. The best and most reliable method is to sign a preliminary contract. We can be sure then that during the period of applying for a loan at the bank, the owner of the property will not sell it to anyone else.
However, before signing the preliminary sales contract, you should carefully verify your creditworthiness at the bank to minimize the risk of not getting a loan.
Can the customer use the services of an intermediary to count on help in finding a loan or related formalities, e.g. indicate where and what to do, help to collect documents and fill them out?
Using the services of a real estate agency, we can count on help in obtaining a loan. Real estate agents work closely with credit advisors. The customer can count on help in completing the documents necessary to obtain a loan, completing all applications, as well as substantive assistance.