Real estate terms

In principle, buying a home is always a good solution. But it involves a huge variety of terms, concepts and even jargon. Since housing is usually a pretty big investment, it’s not a good idea to do it if you don’t really know what you’re talking about.

I myself have been involved in the housing trade and I have found that there are a few basic terms you need to understand before you get too excited. Let’s start with the pricing of the property:

A stopping example

For example, I’ve had a client call me who had found a new property for sale and was about to buy an apartment virtually over the phone when “it only costs a little over €80k and it’s brand new!”. The enthusiasm quickly waned when I explained that it was the sale price, which is the same as the purchase price. By paying this fee, you get the shares that entitle you to own the apartment in question. Shares, which also include the corresponding share of the construction loan. Which in this case was about 170k€. Even after this, there will still be a payment to make, because nowadays very often the plot is separated into its own use. In this example, if the buyer had also wanted to acquire his share of the plot, the bill would have been about €60k higher. So in this case the total price of the property was about 320k€. A little more than the €80k that inspired the enthusiasm.

Let’s stick to the same example: as I said, you could have “got hold” of the apartment at that purchase price and leave the company loan and land plot contributions to be paid monthly in the form of contributions. Then the poor person would be penalised by a monthly maintenance fee, which is still payable even if he or she has bought the property without debt. This contribution – as the name suggests – is used to pay for the maintenance and management costs of the company. In addition to this, the company would have had to pay a finance charge to cover its share of the company’s loan servicing and repayment costs. And still a land objection, with the same formula. This would have meant monthly housing costs, excluding the cost of managing your own mortgage, of around one and a half tonnes. Then no deal was done.

Terminology of new and old

New buildings have their own terms and old buildings have their own terms. If you are about to move into a brand new home that is said to be an RS property, it doesn’t mean it will be any sportier or more powerful, as the RS label often means in cars. In housing, RS stands for Recommended by the Monetary Institutions“, which means that the developer, the builder and the founding shareholder are bound by a number of different obligations defined by law. Such as post-construction and performance guarantees provided by the homebuyer as security. In old housing companies, on the other hand, there is often a redemption clause in the articles of association. It sounds downright scary, but with a clause like that, no one can come ringing the doorbell and tell you they’re buying your home now. The redemption clause specifies when it can be used. For example, if you are selling your home and the redemption clause specifies the right of redemption to the company or another shareholder within a certain period of time, someone specified in the clause can redeem the home that was sold at the same agreed price under the nose of the first buyer.

So to sum up: buy a home, but only after you understand all the details of the project. And if you don’t understand something, ask someone who really does. Inevitably, that cousin-in-law of your uncle’s godfather, who always appears to know everything, may not be the best adviser.

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Forced to bang your brains out, ...

…because we have a history of delivering ordered services quickly, often talking about hours. We understand that the pressure to buy once you find the home of your dreams is intense, which is why we promise delivery within 24 hours of your order. At the latest. This way, you don’t have to hold your breath in your shopping pants for an unnecessarily long time.

One report

There are quite a lot of different documents involved in a housing transaction, ranging from a sales brochure to a floor plan to an audit report. All are necessary for the evaluation, but it is still possible to summarise the essentials in plain language in a single report. Good riddance to the legalese and welcome the core facts with one (1) single report!

Trade documents

Even if the deed of sale of a residential property is a free-form deed, it should still contain all the essential information. We will check that this is the case. We will also check all the annexes that go on the side of the deed, i.e. the entire bundle of documents. You can then breathe a little easier as you sign the deed to your new home.

Negotiated bidding

We are here to help you negotiate your offer. We tell you what to look out for, what to ask the seller/agent and how to interpret the answers. And what conclusions can be drawn from the situation

Making a takeover bid

There is more to a takeover bid than just the price offered. We will help you to identify critical issues and check that all the agreed issues are properly recorded in the offer. And only the agreed things. So that you can sign it with confidence.

Sales price

And by that we mean the final price. We also take into account any company debt and the plot share. We compare the price to other comparable realised transaction prices in the area, not to asking prices. Apartments are always individual, and their equipment and condition vary greatly. However, we will find out if the price area is reasonable and acceptable.

Level of care

We estimate the level of the management fee charged by the company compared to other comparable housing companies in the area. We also look at whether the level has been right for the costs and whether there are clear upward pressures.

Zoning of the area

We’ll find out if there are any zoning changes afoot, or if that sea view you bought at great cost is about to disappear behind a new tower block in a year’s time. Or whether there are some less radical things happening around the place you are considering.

Management of the housing company

We look at how the management of the company has performed, including both the management and the board. Has the management been concerned only with making savings at every point or with keeping the company in good shape and maintaining or even increasing its value? 

Future renovation projects

We assess what kind of renovation projects are expected in the near future and the timeframe in which they can be expected to take place.  We might also throw in some guesses as to the expected costs!

Repair history

We look at when and what measures have been taken in the company and mirror them against the technical lifetime of each item. For example, we use the definitions of the Finnish Building Information Foundation RTS and the Central Association of Plumbing and Heating. This allows us to estimate whether the company has a repair debt.

Housing company finances

We carefully read through the company’s balance sheet and annual report, calculate the company’s indebtedness, liquidity and assess the overall financial situation. We compile our findings into a plain-language report that gives you an overview of the company’s situation.