How I bought my first flat (almost)

For the past 1,5 years, I wanted to diversify from my investments and buy something from the real world. As I’ve been employed for ~5 years, getting a mortgage should not be that hard and I was actually really keen to start getting some debt. I really think a lot differently of dept what I used to a few years ago. So this is a story of how I wanted to buy a flat, and if I was eventually successful.

In 2020, I thought that real estate prices might temporarily decline because of the corona. I was thinking I would buy a flat if that happens. I live in the Czech Republic, but I always knew long term I wanna live in Slovakia. That is why in 2020 I was still in dilemma, whether I would buy a flat in the Czech Republic, or wait a few years and buy something in Slovakia. At the end of 2020, I finally decided I won’t buy real estate in the Czech Republic, as I expected I would move to Slovakia soon.

Getting a morgage

In March 2021 I reached out to banks/financial advisors to help me get a mortgage. As I had income from the Czech Republic, I knew it can be problematic. I was afraid I would have complications with my mortgage if I found a flat but banks would suddenly reject my mortgage. I found out there is a pre-approved mortgage, that way I should get approved before actually having a dream flat slip through my fingers. I was told only two banks offer these pre-approved mortgages, ČSOB and Unicredit bank. I’ve been a client of ČSOB in the Czech Republic for 10 years, while past 5 years I have a premium account with them. I thought that might help me when requesting a mortgage, but to my surprise, they refused to pre-approve my mortgage, and as a reason, I was told I have a salary in Czech crowns (guess what Č in their name stands for). Life goes on, so I went with the second option – Unicredit bank. I got a pre-approved mortgage for 1% and a 10-year fixation. I thought it’s a steal, and I do to this day.

Real estate in Slovakia?

I thought I would start tracking what the real estate market in Slovakia looks like. I did more or less this:

1. Like with everything I do, I try to find shitload of information about it so there is a lower chance of me doing some fuckup. Buying a flat is pretty expensive, if I do a fuckup I am draining few years of my work earnings down the toilet. Also 1% difference is not negligable. I’ve read some books, watched a lot of youtube videos, etc.
2. Do a weekly check how many flats are available in your location – Martin. I am in IT, I think data are very important and having right data improves a chance of me making a good decision. Weekly graph looks like this (I later did a script to do same graph for 20 biggest cities in Slovakia):

3. Check locations – I was aware that location is very important. Neighbours, infrastructure, services and future development were something I was looking at. I created a google spreadsheet tab for every location in city and put all real estate listings there by data. I had there date, number of rooms, link to listing, size, total cost, cost per meter, notes, expected mortgage payment and colors indicating status (sold, reserved, ok, old, too expensive, …)
4. I wanted to go to check multiple flats in real life. Even if I didn’t think I would buy the flat, I needed to have experience dealing with real estate agents, what to look for and what questions are important for me. It isn’t as easy as in big city, but I have been to ~20 flat shows.

Buying a flat

Buying a flat from a different country is hard. As I had a spreadsheet with available flats updated, I knew what was still available for sell and when I came to Slovakia, for a week, I went to see a few flats. I thought I have enough time to buy a flat. I would like to find a flat by the end of 2021, so no hurry, right? So I liked this flat. It was in my top location (Sever), 110 000 eur for 74m2, no balcony. They had somebody interested in the flat already before, but they did not get a mortgage. I mentioned I have pre-approved, which seemed to please an owner and a real estate agent. That evening we called to accept the price (I wanted to offer a lower price, as that is what often happens in CZ/SK, but in the current market situation, it would be risky). We signed the reservation form, sent money to the real estate agency, and waited for contract signing. To my surprise, a few weeks later I got a call it is canceled. Previous “somebody” got mortgage approved before reservation contract expired, so the owner would have to pay 5% fee for breaking it. He did not sign ours yet, as he was on holiday, so no brainer for him. I was thinking of paying the fee, but that flat had a lot of work and it would not be worth it. This was in July 2021.

So after using 5 days of holidays for searching flat and doing related paperwork, I was back in Brno looking for available flats again. In August 2021 I found a nice one in the same locality. It was a complete reconstruction, a pretty nice flat. 123k eur for 73m2 + 6m2 balcony. Again, taking the offer the same day, signed the reservation form, and coincidently it was the same real estate company as in flat number 1, so I did not have to send the reservation deposit again. I was happy the first flat didn’t go through, as this seemed a better deal to me. A few days later, again when I was in Czechia again, I got a call about the owner’s cancellation. They were supposed to get divorced, but their son didn’t handle it well and ended up in psychiatry. Owner cancels.

Well, back at square one. In October 2021 we went again to Slovakia, for a few days of holidays and another batch of flat seeking. There were no more flats in the same location as the previous two flats. So I moved to another location I found reasonable (Ladoven). It’s not ideal, but I really want to use my 1% fee mortgage, with 200 real estate offers total for the whole city and the majority of them sold or duplicated. At this point, if there appears a nice flat, I was willing to call right away, jump into the car and travel 4 hours to Slovakia to see it. Something like that happened, on Wednesday 7:00 I noticed there is a new real estate. I called right away, demanded a flat show as soon as possible, and got one on Friday. When I came there, it was a nice flat of 72m2 for 103k eur. It was next to the main street (heavier traffic) and some parts were unchanged since its inception in 1979. I wanted to let it go through my head, but the real estate agent said there are 4 flat shows right after us. Well, considering the state the flat looked like, I took it before the next flat show. So I have another flat reserved, third time is the charm, right?

Nope. Owners had an idea to sell two flats they had and buy a house. When they managed to get to a bank to ask about this, the bank did not recommend doing so, so they canceled again. Unlucky they didn’t do this before looking for buyers.

So flat number 4 is this. There was a reconstruction just 4 years ago, but students lived there and they managed to ruin the place. It’s 68m2 for 103k eur, and there is more work here. I reserved this flat, so hopefully, this will come through. With fewer flats available, I really don’t want to pay a fee for not using a pre-approved mortgage.