Own home 22 Jun, 2021

Own home: the complete guide to buying your first property in 2021

The dream of homeownership surrounds the imagination of most Brazilians. However, this transaction involves risks, a lot of planning and compromises the families’ budget for a long time. Therefore, it is very important to exercise caution throughout the process. The ideal is to plan financially, cut costs and if possible, save as much money as possible to make a significant contribution and reduce the amount financed.

In addition, it is important to know all the procedures of this commercial transaction. Do you know all forms of payment for a property? Do you know what are the extra costs and expenses involved in this purchase? These are fundamental points to avoid making mistakes when buying your own home.

Choosing your property

Buying the first property is a high investment and the dream of those who want to get out of rent. The home itself guarantees stability for the family. However, for this to happen it is necessary that there is consistent planning so that the dream of homeownership does not turn into a headache. So, the first step is to choose the property with great care since it is a high investment.

Define which property you are looking for. Do you intend to move to an apartment? Or does a home best suit your needs? Then, it is important to trace the characteristics of your ideal property. Make a list of what the property needs to have. This ensures that you set priorities and are not lost during visits to properties.

New, used or on-site property: understand the differences

When buying property many possibilities will appear in front of you. Among them, we can mention the choice for a new or used property, in addition to a property in the plant, which is still under construction. The three options offer advantages and disadvantages. Deciding between what is best is up to the profile of each buyer.

New Property

A property classified as new is one that is part of the most recent developments by the construction companies. They have no former residents and were recently completed. These properties are great because, usually, they present the most innovative in the market, following trends. In addition, because they do not have former residents and have just been built, these properties do not require repairs and are in perfect condition.

However, precisely because of these characteristics, new properties tend to have the highest prices on the market since they are more valued. Some units can even be sold already furnished, which increases the market value. Basically, these properties are excellent options for those who are willing to pay more and move out as soon as possible.

Property used

Buying a used property requires extra care. This is because it is important to avoid properties that will require losses and extra expenses. Thus, these developments require a more accurate verification of the condition of the property, in addition to its history to ensure that it is already paid off.

In addition, other details must be analyzed before buying a used property. These projects require verification of the financing conditions, if there are debts in the condominium and if the documentation of the property is regularized. The great advantage of buying a used property is its value. This is because, generally, it is cheaper than a new property. In addition, these residences are ready to live, which can be a differentiator for those who are in a hurry to move. These units are also the largest part of the offer on the market, which can make your search for the home of your dreams easier.

Property on the floor plan

Buying an apartment in the plant involves some peculiarities. In this model, the buyer basically finances the construction costs. Therefore, it is very common for some people to think that the value of these properties is greater than purchasing a new property. However, this is only because the value at the entrance is higher.

When the work is completed, the buyer can decide whether to pay the remaining total amount or proceed with the financing request. In addition, one of the biggest advantages when buying an apartment in the plant is the option of installment payment. For a ready-made apartment, it is necessary to pay between 20% and 30% of the entry at the time of purchase. For properties in the plant, it is possible to divide this value by the construction time.

There is also greater flexibility for negotiations, such as improving payment conditions or even choosing the best view. Another very important point concerns the personalization of the property. Buying an apartment on the floor plan allows you to negotiate certain characteristics of the property with the construction company.

However, buying a property in the plant can be a risky venture, since there is a possibility of not receiving the equity. The reasons may be financial problems for the construction company or it is not a trustworthy company. In addition, buying an apartment in the plant also presents the risk that, at the end of the construction, the projects may be different from what was promised. This is because the apartments may undergo changes during the construction. In addition, to invest in an apartment in the plant it is necessary to keep in mind that the initial value may rise due to readjustments.

Home Ownership Payment Options

After choosing your ideal property, it is important to research the payment methods. There are several options on the market and what will decide what is best for you will be your financial situation.

Cash payment

Buying your own home in cash is the dream of most Brazilians. This is because, this investment does not compromise the income of families in the long run. Unfortunately, few are able to opt for this form of payment, since the amounts are very high and out of the financial reality of the majority. This form of payment also allows for greater negotiation flexibility. This is because most real estate and construction companies offer a discount on the price when the property is paid in cash.

Property financing

Property financing is the alternative most used when purchasing the house itself.  A real estate financing is done by banks. Thus, financial institutions pay the seller of the property the amount requested by the buyer who must pay the bank to settle the debt. However, it is not possible to finance the entire value of the property, and it is usual for the buyer to make an input between 20% and 30% of the total value.

To finance a property it is important to pay attention to the terms of payment and interest on the contract. Currently, most banks offer financing options and these are the main points that distinguish them from each other. Thus, when deciding to opt for financing it is important to research all the options and choose the one that best fits your budget.

Consortium

Another very common option is the property consortium. It works like this: a group of people get together to pay a fixed, predetermined amount each month without interest for a certain period. Throughout the months, sweepstakes and bids are held that include one of the members. Thus, the credit he seeks for the purchase of a property is provided. At the end of the term, all participants receive the amount invested to buy their own home.

Using FGTS to pay for your property

The Guarantee Fund for Time of Service or FGTS is a good ally for those who work with a formal contract and intend to buy their own home. The FGTS balance can be withdrawn in whole or in part and can be used, according to CEF rules, to buy a property, amortize or write off the outstanding balance of the financing. This benefit facilitates payment or may even be decisive for it to be released.

For that, it is enough to respect the legal conditions of using FGTS. They involve the profile of the buyer and the type of property desired. Furthermore, it is necessary to pay attention to the requirements of the financial institution itself.

Home purchase expenses

When it comes to acquiring a home, many people organize themselves financially thinking about the value of the property. However, it must be kept in mind that several extra fees and charges must be taken into account.

Documentation and taxes

To finalize the purchase of the home it is necessary to bear costs that go beyond the value of the property. The first of these is the Real Estate Transfer Tax (ITBI). It can reach 3% of the sale price of the property and must be paid in cash.

In addition to the ITBI, there are also documents and notary costs. These papers legally attest to the financial resources for the purchase and transfer of ownership, such as public deed and property registration.

The change

Purchasing your own home means having to organize a move from your current home to your new one. This process involves some costs that are usually ignored when buying a property. In order not to be taken by surprise put the value of the moving service in the budget. Search for companies operating in your city and compare prices to find the one with the best value for money.

Renovation and decoration

When you buy your own home, you can hardly find a perfect property, as was dreamed by the buyer. For this, in many cases, it is necessary to invest in small renovations or even in interior design. These changes in the house can make it more comfortable and adapted to your routine. However, they involve financial investment for the changes, or even, the cost of a rental during the procedures depending on what will be done on the property.

In addition, you can choose to change your decor and buy new furniture. Thus, it is necessary to evaluate what will be taken to the new house and what will be discarded. You can choose to buy decorative pieces and coverings to modify the environment without having to dispose of the furniture you already have.

Condominium fee

To complete the expenses when purchasing your own home we need to talk about the condominium fee. When choosing your property it is very important to pay attention to the fixed expenses that they will add to your expenses. So, make sure you can afford the condominium fee. It is applied in apartments or houses in closed condominiums.

It is a monthly amount divided equally between the units of the condominium and all residents must pay it. This value is very important because it must bear the expenses that are common to residents, such as maintaining the living, cleaning and security areas.

Tips for buying your own home

Buying your own home is a great investment, both because it is a transaction that involves high amounts and because of the payment time when we choose financing. This means committing part of your income for many years and that is why you have to make the right choice.

Enlist the help of a broker

Counting on the help of a broker is essential to reduce the risks of a business. It will help you find the ideal property for your family and help you with legal and bureaucratic procedures. It is very important that you choose a security professional. The tip is to always opt for those who are referrals from friends and acquaintances. If this is not possible, always opt for those who are registered in both COFECI and CRECI, bodies that supervise the profession.

Make an inspection

Property inspection is widely used for rental contracts, but that does not prevent you from requesting one if it is a purchase and sale transaction. It is indispensable when the property you are going to buy is used.

This is a safe way to ensure that the property is free from structural damage, hydraulic and electrical problems, malfunctioning electricity, water and gas services, or any other problem that would result in a construction site or exorbitant expenses. For this, you can count on the services of an engineer or even a company specialized in property inspection.

Search the construction company’s history

As previously mentioned, buying a property in the plant is a risky venture because it may happen that the construction company does not deliver the property. To minimize these issues, it is important to research the construction company’s history. In addition, for these properties it is not possible to carry out surveys, so it is important that the construction company is reliable. Check the other properties already sold and delivered by the company, in addition to your financial health, if there are actions filed in court and if the professionals who work in it are properly registered with the respective regional and federal councils of the category.

Avoid doing business with individuals

Although it seems simpler to acquire a property from individuals, having the support of a real estate company is essential to reduce risks. This support is very important when writing a purchase and sale contract, as these companies have legal advice. In addition, having a real estate agent will ensure that the amount paid for the property is within the standards of the market. In the end, real estate professionals have the necessary knowledge to guarantee the veracity of the documents presented by both parties, avoiding fraud.

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