Buying a home is like a marriage

Feelings and perceptions often guide the home-buying process. Choosing a home isn’t a legal procedure, but buying one is. When dealing with contracts worth hundreds of thousands of euros, it’s essential to keep emotions in check – no matter how tempting the dream of that perfect man cave in the basement is.

Purchasing an apartment (shares) and buying real estate are not identical in terms of content or regulation. They’re clearly related, but still different. For simplicity, we’ll refer to both as “real estate transactions” below.

Preparations before finding a home

When preparing for a real estate transaction, it’s a good idea to sort out your finances ahead of time. When you find your dream home, it’s nice to be ready so that making an offer doesn’t get delayed by loan negotiations, comparing banks, waiting for collateral, or waiting for loan approval in general.

Sellers may not always accept conditional offers that depend on financing coming through. They’re also unlikely to wait around for the buyer’s financial situation to be clarified if a faster bidder comes along. The loan process can take weeks, and sellers don’t always have the patience to reserve the property for you during that time.

Investigating the property’s condition

Once you’ve made an offer, withdrawing it is usually not possible without financial consequences, such as penalty fees or compensation. However, you can make a conditional offer. A conditional offer becomes binding if a specific requirement is met, such as securing finances or a satisfactory property inspection.

Most inspections are done without looking into the structure, so issues hidden inside walls may remain undetected, although potential risks are often noted in the report. The inspection brings these risks to the buyer’s attention, which could bind the buyer to investigate further. If the buyer is made aware of risks, it’s assumed they will address them carefully. If the buyer doesn’t request clarifications or follow up, it may be harder to later claim compensation for issues that arise. Property inspections are a double-edged sword.

What should I do if there’s a defect in the property?

Buying a home usually goes smoothly, but sometimes life throws unexpected problems into the mix. Small issues are almost inevitable, but not every problem entitles the buyer to compensation or a price reduction, let alone the right to cancel the sale. The defects must be significant and affect the property’s value.

If problems arise after the transaction, they should be assessed without delay. Filing a complaint (known as a notification of defects) is necessary to preserve the buyer’s right to make claims against the seller. Acting “without delay” doesn’t mean rushing, but it does mean avoiding unnecessary waiting. In court cases involving real estate disputes, one of the first questions examined is whether the buyer has lost the right to make claims due to a delayed or incomplete complaint, even before the actual defect is investigated.

Dispute or compromise?

Even if the case seems clear, and your sense of justice suggests you’ll win in court, litigation always carries risks. In an ideal world, the same set of facts would always lead to the same outcome, but that’s not guaranteed. After all, court cases are settled by humans, with all their imperfections.

When assessing the outcome of a dispute, it’s important to consider not only the possibility of winning, but also the chances of partial success or losing entirely. Settling often leaves both parties with a slightly uncomfortable grimace on their faces, it’s the compromise you make when you feel you’re right. Think of it as a quick lesson in marriage: you might be right, but how sensible is it to argue endlessly about the cleaning schedule with your spouse to achieve the “ideal” result? Sometimes, vacuuming every other week helps life flow more smoothly. Settling isn’t the goal, but a reasonable compromise can be accepted – a bad one, however, should not. You can’t vacuum every day!

What happens if there’s a defect?

At the end of the legal process, the court may, at the buyer’s request, order the seller to pay a price reduction, compensation, or even cancel the sale. A price reduction adjusts the relationship between the property’s condition and the price paid. If the seller acted negligently or recklessly, the court may also award compensation. This could include costs beyond the property itself, such as expenses for temporary accommodation. Additionally, the court may declare the sale canceled if the defect is so significant that the deal cannot reasonably be upheld.

In conclusion

Buying a home will likely go smoothly and without major issues, just like most marriages. There will always be a few bumps along the way, but in the end, it’s rewarding. And even when there are things left to do around the house, you’ll sip your coffee on the new balcony, watching the sunset together. Congratulations on your new home 😊.

Jukka Pasanen
The author is an attorney, Master of Laws, and Master of Economics from the law firm Jurentia.