Buying your first home is one of the most important decisions in life. It is a big step and an exciting venture, but it can also be full of challenges. Here are some important aspects to keep in mind to ensure a smooth and secure home-buying process.
Defining your budget
Before you start looking, define your budget. This includes not only the price of the property but also additional costs such as notary fees, insurance, repairs and furnishing. A clearly defined budget helps you focus on realistic options. Most people buy a home through a bank; to save your own and the seller’s time, calculate your maximum borrowing capacity (check here) and confirm it with a loan manager. This also helps you move into a transaction faster when you find a good offer. Real estate agencies usually have partnerships with banks that can give you an advantage in both response time and contract fees.
The importance of location
Location plays a key role. Research the area where you want to live. Consider transport options, proximity to schools and kindergartens, safety, and nearby services and shopping centres. Also think about how it fits your daily lifestyle. If you are interested in a specific area, contact an agent who works there. That way, off-market offers may reach you. For example, I specialise in 2-3 room apartments in Tallinn city centre and share relevant information in my mailing list.
Financing options
Explore different financing options, including loan types and interest rates. Consult a financial adviser to find the best solution for you. Take your expenses and income into account too. Think long term!
Type of property
Think about which type of property would meet your needs. Do you prefer an apartment or a house? How many bedrooms and bathrooms do you need? How big should the outdoor area be? These questions help narrow down the choice and find the right home.
Technical inspection
Have a technical inspection done before you buy. Find out the condition of the electrical system, plumbing, roof and heating system. This helps avoid unexpected repair costs and ensures the new home meets the required standards. A good tip is to use specialist service providers who do this work for you. €500 invested now can save tens of thousands in the future. One such company is Ehituskaitsebüroo (https://ehituskaitse.ee/). Problems can occur in new developments too.
Negotiations and groundwork
Don’t be afraid to negotiate. Study the offer carefully, ask questions and find out what room you have on price. Check the history of the property, ask for an inspection and, if needed, consult a real estate specialist. Definitely have a friend or relative look over the offer too. Two heads are better than one.
Legal aspects
Notary fees, contract terms and other legal aspects matter. Be aware of the law and make sure all documents are completed correctly. This ensures your security and reduces possible future problems. Fortunately, in Estonia the transaction goes through a notary’s office, and a good agent who does all the groundwork helps along the way.
Jointly owned properties
Joint ownership is ownership of a common asset held simultaneously by two or more persons in notional shares. When one asset has several owners, joint ownership arises. It arises through inheritance, the return of property to several persons, or the purchase of one property by several persons. The return of property to several persons is the main reason why many properties are still in joint ownership today.
Buying or selling a jointly owned share is more complicated than buying or selling an apartment ownership. When buying such property, bear in mind that without a notarised agreement on use, the bank may not grant a loan, so the buyer may need to finance the full amount themselves. If the use of the jointly owned property has been agreed in a notarised agreement, the bank is more willing to lend.
With joint ownership, the other co-owners have a 2-month right of first refusal. They must also be notified of the transaction immediately, from which point the 2 months start running. Disputes are also common where co-owners cannot agree on covering the costs of the property. Questions relating to joint ownership can only be resolved by an agreement on which all co-owners are unanimous.
Another tricky point is that, to keep and preserve the property, one co-owner has the right to make an expense without asking the other co-owner if it is urgent (e.g. the roof is leaking). They can then ask the other co-owner to reimburse the costs in proportion to their share.
Looking ahead
Think about the future too. Do you plan to live in this home for a long time, or is it a temporary solution? Consider possible life changes and make sure the home you choose will meet your needs in the future as well.
Buying your first home can be a challenge, but keeping these important aspects in mind will help you make an informed and well-considered decision. Happy house hunting!
