Mature couple sitting in front of an open patio door and chatting.

Many people dream of owning a house or apartment – it’s better to invest in your own home and build up assets than to pay rent. To make your dream come true, we have put together a guide on buying your own home that explains the typical pitfalls.

Preparing to buy a house or apartment

Purchasing a property is the biggest acquisition in many people’s lives. This change can have far-reaching consequences for their personal finances and quality of life. This makes it all the more important to do thorough groundwork beforehand. Make sure you allow enough time.

The first pitfall looms even before you start looking for property – not knowing your own budget. You should therefore start by calculating the maximum price you can afford. It’s not just the purchase price itself you should take into account, but also any conversion or renovation and, in particular, maintenance costs. Make a list of the criteria that are important to you, such as location, size or furnishings. After these two steps, you will be much more focused in your search for your dream property.

Protecting yourself from financial risks

If the property is a new build, you must be especially careful.

As a rule, the seller will assure you that any reservation payments will be offset against the subsequent purchase price. However, many people are not aware of the risks involved. If, for example, the seller (or general contractor) files for bankruptcy during the construction phase, you may lose your deposit.

Any installments and payments on account during the construction phase are also often insufficiently secured. In the worst-case scenario, the apartment may not be ready for occupation on the planned date, or you could become the owner of a ruined building if the funds run out before the project is completed.

More specifically, any security deposits must cover two different phases:

  • Financial security during the construction phase (performance guarantee)
  • The risks after acceptance in the event of construction defects (warranty guarantee)

The general contractor’s security for the period from the conclusion of the contract to final acceptance usually takes the form of a performance guarantee. This guarantee comes into play if the contractor fails to fulfill the project in accordance with the contract. It is important to agree in advance on the cost arrangements for this type of guarantee. The general contractor usually bears the costs.

The aim of the warranty guarantee is to protect the client’s claims arising from the contractor’s liability for defects. If, for example, a tradesman is unable to repair any construction defects, the warranty guarantee payments enable the correct repairs to be made.

First Home

0.30% interest rate reduction on your first home with UBS, or to replace an existing mortgage with another bank.

Rights and obligations of buyers

The general principle to observe is “buy what you see.” You must check the property and purchase contract thoroughly before signing. Unless otherwise specified in the contract, it is subject to the applicable statutory provisions.

Claims regarding defects in the work or property asserted by the buyer or customer lapse two or five years after acceptance of the work or delivery, depending on the cause. However, depending on the basis for the defect, other limitation periods may apply. The notification and rectification of defects should be demanded rapidly; the burden of proof lies with the buyer. The purchase contract can usually only be canceled in extreme cases. Conversely, you are obliged to pay the contractually agreed sums on time, although a reduction in the price to be paid is possible under certain circumstances.

Pitfalls when buying a home

Buying your own home: what to watch out for

Clarity: Costs, deadlines and services must be defined precisely and in as much detail as possible. All the documents describing the property must form part of the contract. Caution is advised if the building description is brief and imprecise.

Price: Be wary of promises of fixed and all-inclusive prices. In practice, buyers often find that many equipment details are not included in these flat rates. In addition, high surcharges may be demanded for changes and additional requests.

Modifications: When you buy a property off-plan, it is usual for the buyer to request modifications. The kitchen, floor coverings and bathroom fittings are often customized. Make sure that the procedure is set out in the contract. The additional costs and expenses incurred by the contractor must be agreed in writing in advance. Verbal or unclear statements can be expensive.

Condominium ownership: You should also check the condominium ownership documents. In particular, these include the regulations and the publicly certified deed of foundation, which defines the value quotas and size of condominium units, the renovation fund, etc.

Contact points and sources of information when buying a home

If you need any further information, you can contact the following associations:

Financing confirmation: the documents you need

Obtaining financing confirmation from the bank will enable you to clear an important hurdle on the path toward buying a home. The lender will check your credit rating and the value of the property.

The following documents are regularly required to obtain financing confirmation:

  • Personal ID card
  • Detailed information about the property
  • Salary statement (for the last three years in the case of variable remuneration components)
  • Proof of availability of equity
  • Proof of income (tax return or current salary statement or, in the case of paid employment, balance sheet and income statement for the last three years)
  • Proof of assets (tax return or separate statement of assets and pension assets)

“Home ownership” checklist

There are a number of points that you should critically assess before choosing your property. We have summarized them in our “Home ownership checklist: important points and requirements when searching for property.”

Bank appointment

Make an appointment with one of our client advisors. They will clarify whether you meet the financial framework conditions and discuss which mortgages are suitable for you.


The purchase contract for a property must be certified by a notary. As a rule, a notary draws up the contract. It essentially contains details of the parties, the purchase price, any advance payments, payment terms, transfer fees and the date of transfer of ownership. The contract should be available before the notary’s appointment so that you have enough time to check it thoroughly. If necessary, ask for assistance.

Transfer of ownership

You only legally become the owner when you are entered as such in the land register.


It pays to closely examine contracts and to call in experts.

Take a close look at the property and don’t forget the rest of the building (in the case of condominiums, the shared parts, the renovation fund, etc.). You must read and understand all contracts carefully.

If in doubt, you should seek advice.

When obtaining financing, you should ensure that you have a sufficient financial cushion that takes into account not only the purchase price, but also any renovation, conversion and maintenance costs.

Good to know