Real estate - 5 top priorities for buying well

Many certainties have just been shattered, many fortresses have just failed under the effect of this coronavirus crisis! This pandemic reminds us just how vulnerable we are, and how fragile our organizations seem to be in the face of this global health war. In addition to our protective barrier gestures, we also need to protect our homes. With the famous #RestonsChezNous (let's stay at home) slogan, which has been translated into every language, we're realizing that the antibodies we need to fight the disease are now made of stone! This reinforces our decision to buy real estate to protect ourselves against this new risk. This somewhat troubled period should not lead us to postpone our projects. On the contrary, it should encourage us to invest without delay. If we take a few precautions, we'll be able to start making acquisitions right away.

Step 1: BUDGETIZATION

The account is good

Here's a fact that the coronavirus crisis hasn't upset: every real estate project starts with its financial aspect. Hence the need to consult a banker or broker to study the budget available to buyers. The amount of the loan will depend on the monthly repayments and the term of the loan. To this must be added the personal contribution, which represents around 10% of the total cost of the project.
Coronavirus impact? The rise in interest rates that began with the Covid-19 crisis seems to be confirmed. According to the Crédit logement CSA barometer, the average rate stood at 1.17% in April, compared with 1.12% last November, when it was at an all-time low. If we consider the "usury" rate, including borrower's insurance, administrative costs and guarantees, it now stands at 2.50% on a 20-year loan. In fact, the lending rate for a 20-year loan is now around 2% for a first-time buyer.
In this somewhat troubled context, loan brokers like Meilleurtaux are offering to issue borrowers with a "Visa for credit". This certificate helps you reassure the seller about the financing plan, and enables the buyer to sign more quickly once the property has been found.

Reference

Interest rate for a :
? 15 years: 1.14
? 20 years: 1.34
? 25 years: 1.59
Source Meilleurtaux.com

Step 2: PROSPECTION

A new deal?

If, before this health crisis, the main criteria for choosing a property was its location, perhaps priorities will change as a result of social distancing measures which should mean that we won't be returning to the way things used to be... for a long time to come.
Coronavirus impact? A new relationship with work could lead many buyers to reconsider their housing priorities. Starting with the type of property, which could see single-family homes becoming the preferred choice for many buyers. The experience of confinement will have shown that a house with a plot of land offers an attractive amenity. The introduction of telecommuting is also revealing the need to have a room at one's disposal for the needs of one's professional activity, according to the "home office" concept. This type of organization could also reduce the number of work-related journeys and enable people to move further away from their place of work.
Solution : by moving away from major conurbations, buyers will have access to more spacious, less expensive homes. The real estate market is much less tight in more rural areas. Quality properties can be negotiated at attractive price levels. This is all the more true given that in town centers, houses in need of renovation are eligible for the zero-rate loan, provided that the work carried out represents 20% of the total cost of the project.

Reference

A 5-bedroom house in southern Gironde costs €150,000, compared with €300,000 on the outskirts of Bordeaux, in Pessac for example.

Step 3: SELECTION

Priority to information

As a result of the deconfinement that began on May 11, real estate professionals such as notaries are once again able to receive the public in their offices. But with the necessary social distancing. These measures will limit the opportunities for property visits.
Coronavirus impact? As stipulated in the Conseil Supérieur du Notariat's health rules protocol, the number of visitors will be limited, and the wearing of masks and gloves will be mandatory. All documents relating to the property will have to be communicated by electronic means. If the property is discovered, owners will have to leave the premises for the duration of the visit.
In the meantime, buyers can save time and effort by identifying properties of interest in real estate magazines such as "Notaires" and on the immonot website. While the main information appears on the print medium, all the details of the property appear on the web, along with photo galleries to get a very precise idea of the house or apartment and make the best possible plans.

Reference

Property visits take around 2 hours, which is why it's a good idea to select houses or apartments that precisely match your search criteria beforehand.

Step 4: NEGOTIATION

Never without my notary

Never without my notary
While the real estate market presents a number of unknowns, stone is undoubtedly one of the most resilient assets to the coronavirus crisis. Price readjustments may occur, but this will depend greatly on the region. Where the situation remains tense, prices are unlikely to budge too much.
Coronavirus impact? Health uncertainties, heavy traffic restrictions and the initial effects of the economic crisis could force some owners to sell their property, particularly in view of cash flow problems, inheritance issues, etc.Some specialists describe these transactions as "forced", but they will only concern a small proportion of owners. For the others, real estate is generally part of an asset acquisition logic, and it is important to hold on to one's property over the long term. A sale would be all the less opportune if the loan was taken out under excellent conditions, "which will be very difficult to reproduce for many years to come", as Paris Corporate Housing and Hoche Properties point out.
This economic situation does not call into question the fundamentals of real estate, which is characterized by its security. As Gwendal Texier, President of the Chambre des Notaires d'Ille-et-Vilaine, points out: "Real estate avoids the excesses of speculation, as in our region it primarily meets the need for housing as a principal residence. Any price rises will come from inflation, given the billions of euros that will be injected into the financial markets in response to the economic emergency. Let's hope that households will also benefit from inflation in their purchasing power."
Solution In this period, buyers need to take advantage of a context where new properties should be coming onto the market. It's important to consult your notary, who can give you the best advice on buying at the right price, and on carrying out the transaction in the interests of sound asset management. In all cases, the notary's knowledge of the real estate market and the expert appraisal he can carry out will enable him to give an opinion on the coherence of a purchase price.

Reference

In their latest Note de conjoncture immobilière, published in April 2020, the notaires believe that, provided we manage to find an effective response to the risks of the coronavirus, the real estate market could return to its cruising speed, albeit weakened but still relatively dynamic.

Step 5: TRANSACTION

The right compromise

While some sales may have been affected by the period of confinement, the signing of compromises is set to pick up again in the coming days.
Signed in the presence of the notary, the preliminary sales agreement lays the foundations for the final deed of sale, including the price of the property, the date of sale and any suspensive clauses. Whether it's a compromis or a promesse de vente, these legal documents require the intervention of a notary. The notaries were able to ensure continuity of public service by setting up office hours and videoconferencing during the period of confinement.
In view of the health regulations to be observed during this period of decontamination, some notaries' offices will continue to use digital solutions to assist customers with their real estate projects. This enables them to sign promises of sale using electronic powers of attorney, after presenting the deed by videoconference.

Reference

Over 80% of notaries' offices in France are accessible by telephone, e-mail or videoconference (source: Conseil supérieur du notariat).

Christophe RAFFAILLAC