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Real estate is a common necessity, and its price fluctuations, pricing mechanisms, and transaction volume changes follow certain patterns. Even though China's real estate market is closely related to policy regulation, it still adheres to and will continue to follow basic market rules. Perhaps in the past decade, predicting housing prices and making judgments about buying homes seemed like a "mystical science," but I firmly believe that the longer the time frame and the broader the geographical scope, the more universal patterns can be observed in the development of the real estate market. Each country and region, despite its unique characteristics, will ultimately flourish under these universal rules.

Real estate, with its financial attributes, is not a short-term transaction but rather a long-term investment lasting 5 to 7 years. Such long-term investments should be made with careful consideration rather than impulsive purchases.

However, this book will not delve into overly complex financial data, nor will it include regional economic analyses, urban planning comparisons, or the much-discussed predictions of urban housing prices.

This is a manual for first-time homebuyers, written as an introductory guide for those new to real estate. It starts from the experience of buying a home and gradually guides readers on which path may be more suitable for them, the potential pitfalls ahead, how to navigate them, and how to recover if they fall into a pit. The book will include some professional terminology, but there's no need to worry; I will explain everything. In fact, over 80% of the content in this book can be self-researched, and the remaining 20% can be understood after buying and selling a few properties. The purpose of this book is simply to help you sift through the overwhelming information when you stand outside the door of real estate, organize it, verify it, and save you time spent in aimless exploration.

Buying a home is a significant matter; after all, many of us may only buy three homes in our lifetime. Yet, buying a home is also a minor matter because there are many more meaningful things waiting for us to do. At this point, it might be better to leave professional matters to professionals.

Before Buying a Home, It's Necessary to Understand These#

This is a self-assessment checklist I have summarized based on the thought process of buying and selecting a home, combined with my work experience and home-buying experience.

I hope that through the organization of the entire process, I can help you, as a first-time homebuyer, think more rationally, filter options, and ultimately select a satisfactory home.

Have the conditions for the house been met?

Want to buy a house? — Yes!

Do you have money? — Yes!

Buy!

Wait! After all, this is a transaction worth millions; don't rush to pay the deposit just yet. Let's think it over a bit more.

For first-time homebuyers, instead of worrying about missing the best time to buy, it's better to calmly consider whether now is the best time for you to buy a home. The first step in this thought process is to consider "who is buying."

Who is buying? It's not about whether the house is under your name, your parents' name, or your spouse's name. It's about whether you, the buyer, meet the conditions for purchasing a home. Of course, this isn't about meeting the conditions for purchasing based on five years of social security contributions or tax payments, but rather about our own qualifications.

Are there conditions for buying a home? Yes, and there are more than one.

Depending on the purpose of buying a home, the buyer's qualifications can vary significantly. If you already own two homes and want to buy a property in Australia, you need to consider whether you plan to immigrate in the future and who will manage the property after purchase.

Since we are only discussing the first home purchase this time, the aspect of "who is buying" is simpler than other forms of home buying. The main considerations are as follows:

Do you have enough available assets to cover the down payment? Will repaying the loan later create financial pressure?

Is Your Life Plan Clear Enough?#

Next, I will elaborate on these two points in detail. Of course, if you are a rich second generation or a CEO, you can skip the following content and buy a house in full, even if you don't live in it; it can still serve as an investment, although future property taxes may be challenging.

Do you have enough available assets to cover the down payment? Will repaying the loan later create financial pressure?

In earlier years, when housing prices were around one or two thousand per square meter, we had little awareness of financial management, and home purchases were mostly made in cash. However, now, with the sharp rise in housing prices and the budding awareness of financial management among residents, more and more people are choosing to buy homes through loans.

Therefore, mastering the basic knowledge of home loans has become increasingly important.

First of all, the first home loan is very important to us and should not be easily used up. I will explain the details of home loans in the later section "How to Buy." Here, I will only mention the financial aspects for quick decision-making.

First, regarding loan interest rates, the current benchmark interest rate for loans of five years or more is 4.9%, while the benchmark interest rate for provident fund loans is 3.25%. As a major welfare benefit for residents in a socialist country, the interest rate for first home loans in our country can be discounted (usually between 5% to 10%, with past discounts of 7.5% and 8%). Additionally, property loans are also very easy to get approved (recently, loan approvals have tightened, leading to tragic situations where applications were rejected). Moreover, whether in enterprises or public institutions, as long as you are legally employed, the employer will generally pay for your housing provident fund, which is part of the "five insurances and one fund" that everyone refers to. This fund generally earns little interest in the bank and is usually not withdrawable, except for buying a house (in some cities, it can also be withdrawn for renting, and it can be withdrawn across regions, such as in Beijing). Therefore, in just a few years, buying a house with a loan has already become common among ordinary people.

However, how much down payment should we prepare? How many years should we take out a loan? What loan method should we choose? Let me explain in detail.

Our country is vast, and the real estate market conditions vary greatly between cities, so it is difficult to find a fixed value. However, the down payment for the first home is generally between 20% and 35% of the total housing price. This means that for a property valued at 1 million, the down payment will range from 200,000 to 350,000, depending on the region. Conversely, if we have 400,000 in initial funds, we can consider a property worth 2 million with a 20% down payment.

In this case, if you have 2 million, can you consider a property worth 10 million? Yes and no, because in addition to the down payment, we also need to consider the repayment situation later.

If you put down 2 million and only take out a loan for 5 years, guess how much you need to repay in the first month if you take out an 8 million loan with equal principal payments? 165,000! Therefore, after determining the down payment, we also need to consider the ability to repay the loan later.

Moreover, banks are not foolish; bank staff will assess your repayment ability based on your income proof, bank statements, and real estate situation. Generally speaking, a monthly payment below half of your total income is considered reasonable. This means that if your after-tax total income is 10,000, then excluding the provident fund, if your monthly payment is 5,000 or less, the bank can grant you a loan, and the pressure of repaying the monthly payment will not be too great.

Thus, we can reverse calculate the loan amount, loan term, and loan method based on the monthly payment. If you find the calculations too troublesome, you can use any search engine, input the keywords "mortgage calculator," and enter the actual situation to see if you can afford the monthly payment. The longer the term, the lower the monthly payment, but the more interest you will pay.

Using equal principal payments means higher repayment pressure in the early stages, but lower pressure later, suitable for friends who plan to repay early (more than 5 years); using equal principal and interest means lower repayment pressure in the early stages, but more interest in later repayments, suitable for those temporarily short on cash and planning to take the loan to the end or repay in full within 5 years after purchase.

Both methods have their pros and cons, and when making a final choice, you can consult the bank's loan processing specialists for detailed information.

For young people who are certain they will buy a second home and want to buy the first home in first- or second-tier cities, I recommend not choosing provident fund loans for the first home but opting for pure commercial loans instead. I will explain the detailed reasons in the subsequent chapter "How to Buy."

When I bought my home, I was certain I would buy a second home for improvement or investment, so I used a pure commercial loan for the first home and chose the equal principal and interest method, with a 30-year loan at the maximum ratio of 80%. Of course, there were also reasons such as developers not wanting to wait for the lengthy approval of provident fund loans and my limited contributions to the provident fund.

However, using commercial loans for the first home, buying in first- or second-tier cities, leveraging the maximum amount, taking the longest term, and choosing the equal principal and interest method with lower initial repayment pressure is indeed the most suitable choice in the current situation where the renminbi is becoming less valuable, real estate developers will not wait for you to approve for half a year, and everyone is buying two or more properties.

Is Your Life Plan Clear Enough?#

Globally, people typically buy their first home around the age of 35, while in China, it is generally around 25. We must admit that Chinese parents are among the most caring in the world, but buying property too early and being bound by mortgages can indeed stifle some young people's "possibilities." How much "love" ultimately becomes a "burden" is a question every Chinese family needs to ponder.

So, when is the right time to buy a home?

When your life plan is clear enough. You have determined that you will firmly root yourself in a certain place in the future, no longer fantasizing about wandering the world, and have realized the beauty of a simple life, hoping to have a home.

A simple way to test whether you have truly reached this level is to ask yourself — if after buying a home, the housing prices never rise again and remain stable for 10 years, would you panic? (Stop here, think about it, and then continue reading.) If you view the property as a home to live in rather than an investment made of concrete and steel, you won't panic so much. After all, a home is priceless, and it is a place where you can enjoy living for 10 years.

Of course, if you are not an ordinary person and plan to achieve financial freedom in the next decade, you can treat your first home directly as an investment. But you should also ask yourself whether you can withstand potential fluctuations in housing prices in the future.

Whether for personal use or investment, the most important question we should ask ourselves about the first home is not "When should I buy?" but rather "If I buy it, will I regret it?" To answer this question, we must first ask ourselves, "Why buy?"

To Live in or to Invest?#

Why buy?

It's certainly not as simple as "buying a house on a whim." Even billionaires wouldn't just buy without thought. So, what reasons for buying a home can truly support the act of purchasing?

Based on the urgency of buying a home, I have categorized four types:

1. Must-Buy Marriage Home

If your mother-in-law or fiancée has clearly stated that she won't marry you without a house, then even if you think the housing market will crash tomorrow, you must buy. After all, how much you earn or lose is secondary; without your partner, you lose half your world. The same goes for women; even if they really don't want to buy, if both parents oppose the marriage without a home and they can't persuade them, they may have no choice but to buy.

2. Should-Buy Improvement Home

In terms of location, moving from the suburbs to the center, from next to a bus stop to next to a subway station; in terms of layout, moving from a studio to a small two-bedroom, from a small two-bedroom to a large three-bedroom. This is a choice that can enhance the quality of life for oneself and family members. If you have the means, you should buy. In terms of urgency, since there are better options available, it is relatively weaker than the first category. At this point, you should also be more cautious about whether to buy. However, as long as the market isn't crashing tomorrow, such properties can be considered for purchase.

3. Buyable Household Registration Home

If you already have a household registration but need a property to secure it, otherwise you will lose it once you leave your job; or if you don't have a household registration but can obtain one by buying a home, and you really want to stay local. These two ideas support the decision to buy a household registration home.

The significance of household registration varies for different people. However, I believe that in a few years, this uniquely Chinese system will eventually fade away like grain tickets. This process may take 10 years or even longer. Therefore, whether to buy a household registration home depends on how much you value it and whether you are willing to spend millions to obtain it.

4. Rationally Purchased Investment Home

The landlord is too demanding, raising the rent every year, insisting I buy a new table if the old one gets scratched. I really want to buy a home and turn my life around; I made a good profit but have no good investment channels. The Chinese real estate market is so stable that it’s better to buy a property; if I lose, I can just live in it, and if I gain, that’s great. Originally, finding a good landlord or long-term rental company could solve the problem, but I chose to spend a lot of money to buy a home instead; originally, I didn't want to buy, but everyone around me, friends and family, is discussing buying homes, so I want to join the ranks of homebuyers.

Such stubbornness and conformity are not uncommon among young people. However, being a mortgage slave is a deep sea, and being willful is not simple. Buying a home carries risks; never act impulsively. For this kind of impulsive investment, you must calm yourself down, slow down your decision-making process, and ask yourself whether it is truly necessary to buy and whether you are truly ready.

Indeed, the priority of the above categories will vary for different people. If you have an open-minded mother-in-law or a supportive fiancée, you can choose not to buy a home and invest the down payment instead. If you see staying in a place like Beijing as your lifelong goal and believe that not obtaining a "ticket" to Beijing means your life is wasted, then a household registration home becomes a must-buy.

But often, we mistakenly equate "living" with "investing," or misinterpret "can" as "must."

Location! Location! Location!#

Where to buy?

"Location! Location! Location!"

This phrase by Li Ka-shing has been quoted countless times by real estate professionals.

Location is indeed the most important factor for real estate, whether in terms of current price or future sellability.

Even with the development of the internet, the innovation of VR/AR technology, and the popularity of shared transportation, location is not as critical as before. However, a good location remains very important. Location determines price; this is a basic rule of real estate.

So, what constitutes a good location? Which properties are suitable for you? Which properties should you avoid? Let me explain in detail:

How Far is Ideal?

There is an interesting theory called the "5 Kilometers Happiness Theory," which states that if the distance from home to work is within 5 kilometers, people's happiness levels do not differ much. However, if it exceeds 5 kilometers, happiness diminishes with each additional kilometer. Therefore, scientists have concluded that the distance between your residence and workplace should ideally be less than 5 kilometers.

While 5 kilometers is quite specific, what matters more to us is time. If the time it takes to commute by car is less than that of colleagues living within a 5-kilometer radius, why wouldn't we be happy?

Moreover, distance is just a rigid, conventionally agreed-upon metric. With today's advanced transportation, I believe that over time, this ideal distance will extend. However, the closer the distance, the less hassle and more free time you will have; how can you not be happy? For a first home, the layout and community can be less critical, but it should ideally be near transportation hubs like subways and as close to the workplace as possible.

Places to Be Near

• Hospitals: If there are elderly people in the family, living within 3-5 kilometers of a hospital is more convenient; however, for general families, it should be a bit farther away, as hospitals tend to have high foot traffic, which can lead to congestion.

• Primary and Secondary Schools: Families with children who wish for their kids to walk to school should consider a distance of 0.5-2 kilometers; if there are no children in the family or if they are willing to take public transport, they can live farther away. (Children walk at an average speed of 3-4 kilometers/hour.)

• Commercial Areas: A community with commercial facilities will enhance convenience, so a community with operational commercial spaces is definitely more comfortable to live in than one without. Large commercial areas can create noise and heavy foot traffic, so it is advisable to choose a residence at least 1 kilometer away from them.

• Subway Stations and Bus Stops: A distance of 0.2-1 kilometer is ideal. Generally, commercial projects built above subway stations do not house residents, as the noise from the subway can significantly affect sleep. Therefore, a location that is very close to subway and bus stops but does not disturb sleep is an excellent residential location.

• Parks: The closer, the better, ideally within 0.5 kilometers. The reason for suggesting 0.5 kilometers is to avoid the loudspeakers from square dancing in the park. After avoiding the loudspeakers, taking a leisurely stroll in the park with family after meals is undoubtedly one of life's happiest moments.

Places to Be Far From

• Boiler Rooms, Factories, and Other "Big Smokestacks": It is advisable to live upwind of such buildings, with a distance greater than 24 meters. Otherwise, dust will affect our daily lives.

• Landfills and Garbage Stations: Landfills should be located more than 500 meters from residential areas; it is best to avoid buying houses downwind of garbage stations or bins, as odors can drift into homes.

• Crematoriums: It is best to choose a location that is more than 5 kilometers away from residential areas and downwind; even if you don't mind feng shui, consider the potential concerns of future buyers or renters.

• High Voltage Power Lines: High voltage lines are not something to worry about; they are not in the range of places to avoid, but I mention them here because many people mistakenly believe that electromagnetic radiation causes infertility, leukemia, etc., which is pseudoscience. At a distance of over 50 meters, the environmental magnetic flux density drops to 0.14 microteslas, which is the same as the magnetic flux density in indoor environments with electrical appliances.

In addition to the above points, there is also a "school district house" that is highly valued by the public. I plan to discuss it separately because I believe the concept of "school district houses" is a specific product of a particular period in China, and over time, it will fade from people's attention. The quality of a school district is determined by the differences in teaching resources among different schools, and the closer the schools are, the less significant the differences will be. With the improvement of the education system, such differences will certainly narrow or even disappear. A good location will inevitably be accompanied by good educational resources, so there is no need to cling to the concept of "school district houses."

Finally, before buying a home, we can also understand the status of the community's owners, their professions, and income levels. As time goes on, real estate increasingly represents a kind of "circle." Even if you don't like circles, having neighbors with similar backgrounds and education levels will provide plenty of common ground. The saying "Meng Mu's three migrations" still holds strong guidance even in the 21st century.

Once the location is determined, we can continue to confirm it from a time dimension.

When is the Best Time to Buy a Home?#

When to buy is a question frequently asked about the best time to purchase a home, involving concerns about the economic situation, housing price trends, purchase restrictions, real estate company rhythms, and personal circumstances.

Here, I will discuss when to buy from both external and internal factors.

External Factors

Every product follows market rules; some are obvious, some are subtle, some have long cycles, and some have short cycles. Real estate, even as a large product mixed with rigid and investment demands, still adheres to this principle, even as a "Chinese manufacturing" product with strong socialist characteristics.

Starting from the developers' "launch" perspective:

1. June 30 and December 25 are two major marketing nodes for real estate companies. If you bring money to the sales office before these two dates, rest assured that the marketing manager will come out to offer you a bottom price. (This applies only to publicly listed real estate companies, as these two dates are performance assessment points for listed companies, and many developers will choose to sell at a lower profit margin to boost performance.)

2. Nowadays, developers, to prevent unsold remaining units, will reserve the best layouts and locations for last, but of course, the prices will be the highest in the entire project. However, when this project announces a clearance sale and struggles to sell quickly, you will have the opportunity to buy a better house for less money.

3. A project that opens in several phases will sell each phase at a higher price. The first large opening of the first phase will definitely offer the most significant discounts and the lowest overall prices. Even if the housing market declines afterward, developers will not lower prices unless absolutely necessary, as lowering prices would be self-defeating.

4. Chinese developers build houses with loans, so "cash flow" is crucial for them. The longer they take to sell, the more interest they have to pay to banks and the more management, marketing, and employee salaries they incur. Therefore, for small developers, the remaining units that have not sold for a long time have significant room for negotiation.

Now, let’s look at policies and economic rules:

1. There are several channels for rapid housing price increases: rumors, planning, construction, and completion. For example, when it was rumored that Tongzhou might become a sub-center, housing prices rose collectively. When the Beijing government officially confirmed Tongzhou as a sub-center, prices surged again. Therefore, if you want to buy, it’s best to do so before these nodes to see immediate appreciation. So, before buying a home, it’s better to ask friends in government departments or check the government website of your city, at least keep an eye on the news.

2. Many top-selling projects are not necessarily because of good products, good sales, or good locations; they are simply because they are adjacent to land kings or building kings. For example, as a property developer, my neighboring project sold for 100,000 per square meter because of new land acquisition and new products. I acquired the land earlier and opened earlier, and my product is not much worse than theirs. So why can't I sell for 40,000 now? Therefore, buying surrounding properties before land kings and building kings appear is a good choice.

3. In cities like Beijing and Shanghai that have purchase restrictions, or even more so in areas like Tongzhou with double restrictions, restrictions are in place because supply is less than demand. Only when the restrictions are truly lifted will housing prices rise to a level that does not require policy regulation. Therefore, for at least the next 10 years, we only need to consider whether prices are rising quickly or slowly. The earlier you buy, the lower the price, but personal cash flow must still be considered.

4. Second-hand housing prices, rents, and first-hand housing prices are always positively correlated, while first-hand housing prices are controlled by the market and determined by developers. However, second-hand housing prices and rents are directly regulated by the market. Therefore, second-hand housing prices not only reflect reality but also change earlier than first-hand housing prices.

5. When favorable policies for the real estate market appear, buy as soon as possible because prices have not yet risen; when unfavorable policies appear, buy as late as possible because prices have not yet dropped.

Apart from all of this, roads can be built, people can move, subways can be opened, and new districts can be applied for, but the only thing that cannot be replicated is the environment formed by mountains, rivers, and lakes. Therefore, from a residential perspective, you should either live by the mountains or by the water. In popular areas, you should seize good environmental positions as early as possible.

Next, let's talk about housing price trends. Since China's reform and opening up, housing prices in first- and second-tier cities, especially first-tier cities, have been rising for almost 30 years. For the foreseeable future, it is still very difficult for real estate to enter a downward channel. This is because China is still a developing country, and the urbanization rate is gradually increasing and will continue to rise. This is the logic behind many people saying, "The best time to buy a house was last year."

So, is it really better to buy earlier? Is it really just about having money to buy a house? Of course not, because when everyone thinks this way, the future appreciation space will be overdrawn, and prices will stagnate for a long time. Moreover, we must also consider the most important internal factors.

Internal Factors

What are internal factors? They are our own circumstances, which can be simply summarized as our current and future financial situations, family situations, etc.

1. If it is a first-time home purchase for self-use, and the assets are sufficient for the down payment, and repaying the housing loan will not significantly reduce the quality of life, then you can consider buying a home.

2. If the primary purpose is investment and self-use is secondary, then you need to consider that your annualized return on investment is likely to be weaker than the annualized increase in housing prices (10% is reasonable), and you will not need a large amount of cash in the future due to entrepreneurship, then you can consider buying a home.

3. If you do not want to miss out on potential future increases and can accept possible fluctuations in the future.

4. Before marriage (marriage home), before children start school (school district home), or before changing jobs (to ensure social security continuity and ease of loan approval) are all times to consider buying a home.

5. Because it is a large purchase, no matter how urgent the time is, it is necessary to reach a consensus among all family members before proceeding with the purchase; otherwise, it may lead to family conflicts due to rash actions.

How to Use Payment Methods to Save Money#

How to buy refers to choosing different payment methods.

Here, I will first list the payment methods for purchasing a home:

1. Full Payment at Once

The buyer pays the entire amount in one go. This is the preferred payment method for both developers and second-hand homeowners, as the money can be received immediately.

The benefits for the buyer include the following four points:

• By paying in full, you can negotiate for more discounts and price reductions.
• If it is a ready-to-move-in property and the developer has released it from the bank, you can immediately obtain the property title (there are no concerns with second-hand homes, which can also be processed immediately).
• There is no need to repay bank loan interest.
• It is very convenient to resell or mortgage your property later.

2. Full Payment in Installments

The buyer pays the purchase price to the developer or second-hand homeowner in several installments. Generally, developers' full payment installments are within 1-2 months, while second-hand homes may vary in time.

This is a relatively balanced payment method that still bypasses bank loans. Compared to full payment at once, buyers have some leeway to gather funds and can control the pace themselves without going through the bank.

3. Provident Fund Loan

The buyer uses their housing provident fund to apply for a loan from the provident fund management center, provided they meet the local provident fund usage regulations.

The biggest advantage of a provident fund loan is its low interest rate, with an annualized rate of less than 3%. This is a welfare or subsidized loan for legally tax-paying residents. Compared to commercial loans, it saves a significant amount in interest each year. However, provident fund loans also have certain drawbacks: the usage conditions are very strict, and many people find it difficult to meet the standards; the approval time is very long, sometimes even exceeding six months, causing many developers and second-hand homeowners to be unwilling to sell to consumers using provident fund loans; and the loan amount has a certain upper limit, which often requires a significant increase in the down payment ratio or a mixed loan to fill the gap.

4. Commercial Loan

After paying the corresponding down payment, the buyer applies for a loan through a commercial bank. Commercial loans are currently the main choice for home purchases due to their fast approval time, broad application conditions, and less stringent limits compared to provident fund loans.

Real estate developers and second-hand homeowners are generally more accepting of commercial loans than provident fund loans. Currently, some commercial banks can process applications to disbursement in just 7-10 working days, and first-time home loan interest rates will have certain discounts, with relatively fewer documents required and easier approval. However, the interest rates for home loans are relatively higher than those for provident fund loans, with a benchmark rate of 4.9% for loans over five years.

5. Combined Loan (Mixed Loan)

This is a payment method that combines provident fund loans and commercial loans, commonly used when the provident fund loan amount reaches its limit, and the remaining amount cannot be paid in one go.

This payment method can maximize savings for buyers, allowing them to avoid increasing the down payment ratio while still benefiting from the preferential rates of provident fund loans. Of course, there are also drawbacks, such as sellers being unwilling to wait, complicated loan approval processes, long waiting times, and energy consumption.

These are all the payment methods.

As for first-time homebuyers who want to buy a home, plan to invest or replace it later, do not want to burden their families too much, and hope to repay the loan themselves in the future (yes, the restrictions are that specific), my suggestions are as follows:

If you can take out a loan, do not pay in full; if you can take out a long-term loan, do not take out a short-term loan; if you can take out a larger loan, do not take out a smaller loan; if you can use equal principal and interest, do not use equal principal; if you can use commercial loans, do not use housing provident fund loans.

Before explaining the reasons, let’s understand equal principal and equal principal and interest.

Equal Principal: The monthly repayment amount varies, decreasing each month.

This method divides the loan principal equally over the total number of repayment months, adding the interest on the remaining principal from the previous month, forming the monthly repayment amount. Therefore, the repayment amount for the first month is the highest and decreases each month.

Equal Principal and Interest: The monthly repayment amount remains the same. Essentially, the proportion of principal increases monthly while the proportion of interest decreases, keeping the monthly repayment amount constant. In the distribution of "principal and interest" in monthly payments, the proportion of interest is larger in the earlier period, while the proportion of principal gradually increases after the repayment period exceeds half. Therefore, equal principal and interest have a relatively lower repayment pressure in the early stages compared to equal principal, but the total repayment amount is larger.

Now, let’s discuss the reasons. Why "if you can take out a loan, do not pay in full; if you can take out a long-term loan, do not take out a short-term loan; if you can take out a larger loan, do not take out a smaller loan; if you can use equal principal and interest, do not use equal principal; if you can use commercial loans, do not use housing provident fund loans"?

Because whether it is a housing provident fund loan or a commercial loan, it is a welfare loan provided by the state to every resident. Especially for first-time home loans, regardless of where or when, there are significant discounts. Even commercial loans without any discounts only have an interest rate of 4.9%. Most large financial products in the market can achieve an annualized return of 5% or more, so from this perspective, taking out a loan is very cost-effective.

Therefore, even if you have the money to pay in full, I still recommend choosing a loan. Moreover, as young people, how could we have that much money? Hence, I say, "If you can take out a loan, do not pay in full."

In the current context of rapid economic development, the consensus is that "the renminbi is becoming less valuable." So why not use the future less valuable renminbi to buy relatively cheap real estate now?

Although longer loan terms mean paying more interest, longer terms also mean lower monthly repayment amounts, reducing repayment pressure. Thus, I say, "If you can take out a long-term loan, do not take out a short-term loan."

At the same time, the amount that can be borrowed for the first home is substantial. Depending on the region and time, it can range from 65% to 80%. Since housing loans are a welfare benefit, why not maximize our benefits?

For young people, the earlier you buy a home, the sooner you can move into your own property, take control of your life, and escape the anxiety of rising housing prices. Therefore, I say, "If you can take out a larger loan, do not take out a smaller loan."

Why "if you can use equal principal and interest, do not use equal principal; if you can use commercial loans, do not use housing provident fund loans"?

First of all, this statement is not rigorous, and it may not suit every person or family. Therefore, I will explain in detail which types of first-time homebuyers this method is suitable for.

For example, I have limited cash, a short work history, and have not contributed to the housing provident fund for long. With a not-so-high income, I have to bear the pressure of renting in a first-tier city while managing daily living expenses and repaying the home loan monthly. However, fortunately, my income will gradually increase with age (perhaps), and as a real estate professional, I know that I will definitely not only buy one property in my lifetime (probably). Therefore, I chose the equal principal and interest method and a commercial loan.

Because equal principal and interest has relatively lower repayment pressure in the early stages compared to equal principal, and the monthly repayment amount is fixed, it makes it easier for me to plan my finances. At the same time, if I were a middle-aged man in my forties with a flourishing career, I might choose equal principal, as this method has a lower total repayment amount, and my net income may not grow or may slightly decline as I age. But I am young, and my income will definitely increase; I am not worried.

In addition, considering the "time value of money," equal principal means a higher down payment, while equal principal and interest means a higher financial leverage, allowing me to leverage a larger asset with less money.

Moreover, I cannot keep my first home for a lifetime; I may replace it within 5 years. During the period when the total repayment amount for equal principal and interest is less than that for equal principal, the appreciation and realization of the property often yield a higher investment return.

Considering all the above reasons, although the total repayment amount for equal principal and interest is higher and not conducive to early repayment (if I haven't found a buyer, I won't repay early), I will still choose equal principal and interest without hesitation.

So, why give up the 2.75% provident fund loan and embrace the nearly 5% commercial loan? Is it because my girlfriend works at a bank, and I want to help her achieve her performance?

Wrong! Even if that ex-girlfriend who dumped me worked at a bank, I would still choose commercial loans.

Because choosing a commercial loan for the first home is the most rational and wise choice for me. In the face of the emotional appeal of a man and the substantial cash saved, I wisely choose the latter.

The reason is that first-time loans have an 85% discount (currently, some banks in some regions have tightened discounts), while second-home loans directly increase by 10%. Therefore, the discount for first homes is very important and can offset the relatively high interest rates of commercial loans, preparing for my second home (after the provident fund discount, it is around 2.5%, while the commercial loan discount is around 4.1%).

Additionally, the most important thing when buying a first home is not to miss the opportunity. In hot-selling properties and prosperous years in real estate, developers only accept commercial loans (because provident fund disbursement is slow, around six months, and developers will refuse to sell to you, while commercial loans can generally still get discounts).

Furthermore, the loan ratio for the first home can be quite high, and the total amount will be substantial. However, the provident fund amount is usually insufficient, and the down payment ratio for second homes is high (40% or more). At this time, the provident fund can be used, and with such a low interest rate, even if it increases by 10%, it is still acceptable. Meanwhile, the second home is an improvement property, which is not as urgent as the first home, allowing for a slower selection process. Selling the first home as the down payment for the second home can also significantly increase the down payment ratio, avoiding the 10% increase on the second home. Therefore, I choose a commercial loan for the first home.

"If you can take out a loan, do not pay in full; if you can take out a long-term loan, do not take out a short-term loan; if you can take out a larger loan, do not take out a smaller loan; if you can use equal principal and interest, do not use equal principal; if you can use commercial loans, do not use housing provident fund loans." This is my sincere advice for first-time homebuyers.

After discussing how to buy in terms of payment methods, let’s talk about how to buy in terms of purchasing methods.

As a real estate marketing professional, I have a strong industry attribute and can automatically identify almost all marketing tricks used by developers. However, as a novice homebuyer, what should I do?

Of course, you should come to me (laughs). If you can't find me, think about whether you know anyone in the real estate circle. If you do, you can go directly to them, share your situation and thoughts, and let them help you come up with ideas.

Of course, if you don't have any friends in real estate or don't want to find a home buying consultant, there is still a way! That is to DIY the entire process, which is also the purpose of this book.

First, we need to gather enough market and property information.

Regarding big data, major real estate companies like SouFun, FangTianXia, Anjuke, and Lianjia can provide us with information; for news and real estate information, portals like 58 Real Estate, Phoenix Real Estate, Sina Real Estate, Tencent Real Estate, and Sohu Real Estate can provide us with sufficient real estate news; for real estate tips, pitfall guides, and operational techniques, platforms like Zhihu, ShuiKu Forum, and various real estate self-media and public accounts can definitely meet your personalized needs.

However, the more channels we have for obtaining information, the more mixed the information we encounter, and the more likely we are to encounter incorrect or even dangerous information. At this point, we must think carefully and remember the saying, "The more miraculous it seems, the more likely it is to be a scam." Communicate more with friends and family around you, do not work in isolation, and seek professional help when necessary.

My first home was a new property located in the most central area of a provincial capital city because I firmly believed that the housing prices in this city would rise rapidly to their rightful height. At the same time, my property consultant was my good friend, and I was familiar with the products and pricing principles of this company, fully trusting my friend. Therefore, I did not conduct an in-depth investigation of this project and paid the deposit upon my first visit.

In this provincial capital city, I had only visited twice, including house viewings. The reason I dared to buy this way is that I know that for first-hand properties, a reliable property consultant and a friend who understands the local market are very important; they will help you avoid all the pitfalls and choose the best options.

Different properties will have different price discounts at different marketing nodes. Sometimes, the best deals come from old customers bringing in new customers; sometimes, the largest discounts come through intermediaries; sometimes, simply visiting can yield the best discounts. However, if you don't have my luck, don't worry; you can search for several properties online or find the most reputable local intermediary company. (Make sure to choose a large intermediary. For first-hand properties, intermediary companies receive rebates from developers and do not charge buyers service fees, and the larger the intermediary, the greater the discount you may receive.)

If your first home is a second-hand property, then as a novice homebuyer, from the most prudent perspective, I recommend finding the most expensive and professional intermediary company to provide services. This is because there are many irregular operations in second-hand property transactions, and even real estate professionals occasionally overlook details. Therefore, it is better to choose a reliable intermediary to handle the transaction and leave professional matters to professionals.

However, if your first home is a self-use commodity housing or government-subsidized housing, there is no need to find friends, relatives, or industry intermediaries. You can directly apply on the local application website (for example, in Beijing, it is the Beijing Municipal Housing and Urban-Rural Development Committee website) and wait for approval and lottery results. There is no room for negotiation, the prices are transparent, and the process is simple and fixed with no changes.

Let me briefly talk about self-use commodity housing, which only exists in cities with high housing prices like Beijing. It is a government-subsidized housing project, although it is also built by developers, it is primarily to help the government build and sell houses without making much profit. The biggest feature of this type of housing is that the unit price is about 30% lower than surrounding housing prices, but the unit size is generally below 90 square meters, and the location is usually in the suburbs. The application conditions are very strict, and the probability of success is very low. In the hot housing market of 2016, being able to buy self-use commodity housing through a lottery was akin to winning the lottery.

First-Hand vs. Second-Hand, Ordinary Residential vs. Commercial Residential#

At this point, we are just about to choose a property.

What distinguishes a first-time homebuyer’s property from other purchasing purposes? In this chapter, I will discuss from the perspectives of property nature, land nature, and layout.

First-Hand vs. Second-Hand

Before comparing, let’s define both:

• First-Hand Property: Also known as new property, it is a transaction with the developer.
• Second-Hand Property: A property that has been purchased by someone else, involving a transaction with the homeowner.

Analyzing the pros and cons of both is essentially about finding their differences, including unit price, location, layout, supporting facilities, loans, risks, etc.

• Price: Generally speaking, second-hand property prices are usually lower than first-hand properties. The main reason is lower construction costs and older property ages.

• Location: Second-hand properties generally have better locations than new properties. The development of a city usually spreads out from the center, so the closer to the city center and the more complete the supporting facilities, the more second-hand properties there are, while new properties are relatively fewer.

• Layout: Second-hand properties generally offer more layout options than first-hand properties. Since second-hand properties are spread throughout the city, there is a greater variety of layouts. However, this is not absolute, and generally, first-hand properties have newer layouts, more reasonable designs, and are more comfortable to live in.

• Supporting Facilities: Generally speaking, the surrounding facilities of second-hand properties are superior to those of first-hand properties because second-hand properties have been developed for many years, while first-hand properties are often newly built and may not have completed surrounding facilities.

• Loans: Since many people do not have sufficient funds when buying their first home, most will choose to take out a loan. When applying for a loan, real estate developers will have already negotiated cooperation with specific banks, making it easier for your loan to be approved and processed, with a higher loan ratio compared to second-hand properties. For second-hand properties, if you do not choose to use an intermediary, you will have to handle all the procedures and matters yourself, and it will be more difficult to get a loan.

• Risk: First-hand properties have relatively lower risks. The biggest risk when purchasing a first-hand property is that most first-hand properties are pre-sold, and buyers may have limited knowledge of the developer. The time it takes for pre-sold properties to become available can range from a year to several years, during which many uncontrollable factors may arise. Second-hand properties are all sold as existing homes, so there is no such risk; as long as the transfer is completed, you can rest easy. However, second-hand properties are often transactions between individuals, and some sellers may intentionally deceive buyers by concealing adverse factors about the property, increasing the buyer's identification costs. If you do not carefully discern, you may fall into traps set by sellers.

In summary, if our first home does not require a large down payment, I recommend choosing a first-hand property with lower risks, more transparent processes, and better living conditions. However, if the quality of the second-hand property is not poor, it is purchased through legitimate channels, and the location is very good, and the down payment is not sufficient, you can still choose a second-hand property as your first home.

Ordinary Residential vs. Commercial Residential

Residential and commercial residential properties are classified based on land nature, artificially divided into: residential/commercial properties with a 70-year usage right, which can be automatically renewed upon expiration (as emphasized by Premier Li Keqiang in early 2017); and commercial residential properties/apartments/commercial offices with 50-year/40-year usage rights, where renewal upon expiration remains uncertain. Besides the most obvious difference in usage duration, ordinary residential and commercial residential properties also have the following differences:

1. Water and Electricity Costs: Ordinary residential properties are charged at residential water and electricity rates, while commercial residential properties are generally charged at commercial rates. Therefore, the latter will incur higher water and electricity costs.

2. Water Supply and Gas Pipeline Differences: Recent ordinary residential properties have water supply and gas pipelines, but since commercial residential properties are originally commercial land, some land approved for commercial residential use may not allow the installation of water supply or gas pipelines. In Shanghai in 2017, there were even cases where land was allowed for approval but not for sale, leading to forced removal of water supply and gas pipelines from commercial residential properties.

3. Household Registration Differences: Compared to ordinary residential properties, commercial residential properties cannot secure household registrations, cannot determine school districts, and can only be used for self-living or renting. However, one advantage of commercial residential properties is that they can register companies, which ordinary residential properties cannot do, as commercial residential properties are originally built for business purposes.

4. Loan Ratios, Maximum Terms, and Costs Differences: The state uniformly stipulates that the loan ratio for commercial residential properties can only reach a maximum of 50% (in Beijing, after the 2017 purchase restriction policy was implemented, commercial residential properties cannot be purchased through loans and can only be bought in corporate form), and the maximum loan term is 20 years, with interest rates 10% higher than the bank's benchmark rate. In contrast, some regions' ordinary residential properties can enjoy a maximum loan ratio of 80%, a maximum interest rate discount of 15%, and a maximum loan term of 30 years.

However, commercial residential properties are not subject to purchase or loan restrictions (in Beijing, restrictions on commercial residential properties began in 2017), which is a significant advantage, giving them strong investment attributes.

5. Land Supply Differences: In any city, the supply of commercial residential land is very abundant, even possibly oversupplied, while residential land is relatively less abundant. This also determines the difficulty in selling commercial residential properties, as the ample supply makes it hard to raise prices, and the large inventory makes it difficult to transfer.

6. Tax Differences: For ordinary residential projects, the deed tax is 1.5% of the total housing price upon initial purchase and transfer, while for 50-year properties, the deed tax is 3% of the total housing price. However, commercial residential properties do not have the restrictions on buying and selling that ordinary residential properties do, and there are no "only for first-time buyers" or "only for properties held for more than two years" limitations; as long as the property title is obtained, it can be sold without restrictions, and there are no differences in tax fees.

7. Usable Area Differences: Since commercial residential properties are often set up as hotel-style apartments, they have more impressive lobbies, wider corridors, and thus more shared areas. In terms of usable area, ordinary residential properties have a higher usable area rate, around 80%, while commercial residential properties have a lower usable area rate, around 60%. (Usable area rate: usable area for residents / total building area, compared to each unit's building area / sales area ratio.)

8. Price Differences: Due to the above differences, even if they are well-decorated and in great locations, the unit price of commercial residential properties will still be 1/3 to 1/2 cheaper than ordinary residential properties in the same city. Therefore, the rental yield and price-to-rent ratio of commercial residential properties are higher, making them easier to rent out.

In summary, if you are not subject to purchase restrictions, I strongly recommend choosing ordinary residential properties with a 70-year usage right as your first home. However, if you are restricted from purchasing and have special reasons (such as being certain that housing prices will rise in the future or your mother-in-law demanding a house to marry), you can also consider purchasing commercial residential properties.

What Makes a Good House?#

So, what kind of house is considered a good house, and what makes a good layout?

Everyone has their own likes and dislikes, so the criteria for a "good layout" will vary from person to person. However, the best layout must meet the living needs of all family members and be comfortable to live in, without any wasted space.

What constitutes a good layout? For a first-time homebuyer, this is definitely a thought-provoking question.

What Do Men, Women, and Children Like?

• Women: A large walk-in closet/wardrobe. One of women's biggest hobbies is shopping, so they need a spacious closet or wardrobe.

• Men: A basement/study/workshop. Men are solitary creatures who need their own independent space for work or contemplation, so they need an attic or basement, a study, or a workshop.

• Elderly: A flat is preferred over a duplex, and a south-facing bedroom is preferred over a north-facing one. Due to the wisdom accumulated over time, the elderly also carry pain and aging, so they prefer single-story residences that do not require climbing stairs over duplexes or multi-story villas. Moreover, the elderly love to sit on the balcony and bask in the sun on a leisurely afternoon. Therefore, having a south-facing bedroom would make them very happy.

• Children: A large and bright living room and a private bedroom. Children are the future of the family and the most energetic members; they need enough space to play and may even invite three or four friends over to play. Therefore, a sufficiently large and bright living room is standard, and as they grow older, their need for independence will become more pronounced, making a private bedroom increasingly important.

What Constitutes a "Square" Layout?

It is said that "square" layouts are good, but how does one find a "square" layout?

A square layout is not a perfectly square room!

Instead, it is a "wide facade, short depth" rectangular layout, as only such layouts can allow sunlight to fully enter and have high space utilization, making it economical without any wasted area. (Facade: the width between the east and west walls of a house; depth: the distance between the north and south walls of a house.)

Tips: Data shows that a facade-to-depth ratio of 1.5:1 is the most comfortable for living.

What Size Should Rooms Be?

In one sentence: large kitchen, large bathroom, large living room, small bedrooms.

1. The kitchen should be > 6 square meters, the bathroom should be > 5 square meters, and ideally, it should have a separate dry and wet design. (In northern inland areas, due to dry air and cold winters, the bathroom can be located centrally.)

2. The living room should be > 20 square meters, and it should be square, open, and well-lit. It is recommended to choose floor-to-ceiling windows while ensuring indoor temperature.

3. Bedrooms should be < 15 square meters, and they should ensure privacy, quietness, and good ventilation.

What Are the Differences Among Different Rooms?

1. Kitchen:

Since kitchens produce smoke and fumes, proper ventilation is crucial; it should be located downwind; otherwise, smoke may backflow. Additionally, kitchens are places for cooking, so hygiene standards are very strict, requiring separation from bathrooms. Finally, kitchen waste can breed bacteria, so a bright kitchen design (with sunlight and windows) should be chosen, and it should be spacious to avoid bacteria growth and facilitate cleaning.

2. Bathroom:

Due to the humidity in bathrooms, when renovating or choosing a well-decorated house, a dry and wet separation design should be selected. Also, due to humidity, bacteria can easily breed, so a bright and ventilated design is preferable, ideally located downwind. (If conditions allow, from a hygiene and privacy perspective, it is best to choose a layout with separate private and public bathrooms.)

3. Living Room:

The living room is the central place for family and friends to interact and should be located in the middle of the house, as spacious and square as possible, without obstructions. If conditions allow, floor-to-ceiling windows are recommended for brightness and openness.

4. Bedroom:

Elderly people prefer sunlight, so the elderly room should ideally face south; children prefer shade, so the children's room should ideally face north.

Since family members will spend eight hours in a small space overnight, bedrooms must have windows and good ventilation. If possible, an independent bathroom should be included.

What Makes a Good House?

Is a house considered "good" just because it has a good layout? Not necessarily; we have more factors to consider.

1. Floor Height and Net Height:

Floor height is the distance between the lower and upper floor slabs; net height is the floor height minus the thickness of the slab.

The national requirement for residential floor height is not less than 2.6 meters. For an average person with a height of 180 cm, a net height of 2.4 meters does not create a sense of oppression.

A lower net height may create a sense of oppression, affecting lighting and ventilation; a higher net height increases costs and creates a sense of emptiness. However, in actual viewings, a lower net height may not necessarily feel oppressive, and a higher net height may not necessarily feel empty. The sense of oppression is greatly influenced by the layout, arrangement, and glass area of the house. Here, I remind everyone not to rely solely on plans but to view the property in person.

2. Floor Level:

• Low Floors: Convenient for going out, easy to escape in emergencies, but generally noisier, more prone to theft, more mosquitoes, and possibly damp.
• Middle Floors: Relatively balanced, quiet, and safe; as the floor height increases, the view becomes more open, but if there is no elevator or if the elevator malfunctions, it becomes increasingly inconvenient for the elderly to go up and down.
• Top Floors: Best views, warmest in centrally heated buildings, but in older communities, water pressure may be low, and there may be issues with roof leaks. There is a saying that the 9th to 11th floors of high-rise buildings are "dust layers," where the air is most polluted; this saying is a rumor and should not be believed.

3. Usable Area Rate:

Usable area rate is the ratio of the area available for residents to the total building area. High-rise buildings typically have a usable area rate between 75% and 80%, while standalone villas have a 100% usable area rate.

A higher usable area rate is not always better. While a higher usable area rate can give our housing a higher cost-performance ratio, it also means a smaller shared area, which may indicate that the corridors, lobbies, etc., are relatively narrow, affecting the living experience.

4. Greening Rate:

Greening rate is the ratio of the total vertical projection area of greenery to the land area of the community.

The national requirement for greening rate is not less than 30%.

It is also important to note that numbers do not indicate the degree of greening in the community; you must personally check the greening situation in the community. Additionally, be careful to distinguish between greening rate and green land rate (as long as there is grass, it counts as green land, so some developers may confuse greening rate with green land rate).

5. Floor Area Ratio:

Floor area ratio is the ratio of the total building area of the community to the land area.

The floor area ratios for different types of properties are: residential 2.0-3.0; garden-style apartments 1.0-2.0; villas and similar properties around 1.0. When choosing a property, not only should you look at the floor area ratio of the project, but also the surrounding area. If the surrounding area is filled with high-rise buildings that block the view, even a low floor area ratio will not improve your mood.

6. Building Spacing:

Building spacing refers to the distance between buildings.

The spacing between front and back buildings should be: building height: building spacing < 1:1.2

The spacing between left and right buildings should be: multi-story (4-6 stories) to multi-story > 6 meters; multi-story to high-rise (12 stories and above) > 9 meters; high-rise to high-rise > 13 meters. Discussing ratios without considering distances is not reasonable.

The benefits of larger building spacing include: a sense of privacy; a wider view; no direct line of sight issues; and ample sunlight.

The drawbacks of smaller building spacing include: neighbor noise disturbances; potentially poor ventilation; direct line of sight issues; and relatively insufficient lighting.

Only Properties with Five Certificates Are Reliable#

In simple terms, properties with all five certificates are "big property rights properties" that are legally protected.

The five certificates for commercial housing are: Construction Land Planning Permit, State-owned Land Use Certificate, Construction Project Planning Permit, Construction Project Construction Permit (also known as Construction Start Permit), and Commercial Housing Pre-sale Permit.

Although these certificates may not seem directly related to us, they determine when the developer can form a sales team, when construction can begin, when the sales office can be decorated, and when the first opening can occur. The acquisition of these certificates is sequential, from the first to the last.

The one that is most relevant to us, and possibly the only one that matters, is the final Commercial Housing Pre-sale Permit. This is because once the developer obtains this permit, they can start selling.

Most developers choose to open for sales shortly after obtaining the permit. Additionally, the advertising laws have become stricter; developers cannot openly and directly advertise "selling houses" before obtaining the pre-sale permit. Therefore, any project that dares to openly advertise for sale, especially physical advertisements like billboards on overpasses, must have a pre-sale permit (some small places may have violations, and the identification method is simple: check whether the advertisement has a pre-sale permit number). For projects that have obtained the pre-sale permit, you can directly visit the sales office to view the property and pay the deposit.

The pre-sale permit looks like this:

Master the Entire Process of Buying First-Hand Properties#

The process of buying first-hand properties is not complicated.

To illustrate an extreme case: when I was a property consultant, I had a client who casually visited the sales office around 1 PM, saying she just wanted to take a look. I prepared to introduce the area map and model, but she insisted on seeing the show flat. After about 10 minutes, she received a call from a friend inviting her to go shopping, so she decided not to continue listening. Then she took out her bank card and started paying the deposit. Yes, it was not a reservation but a deposit, which is generally non-refundable. The entire process of viewing and buying the property took her less than an hour.

Of course, this is a very special case. Most buyers would not make such a hasty decision, and for first-time homebuyers like us, we need to be more cautious, even more cautious.

First, let’s discuss what we can do before arriving at the sales office.

Before going to the sales office, we can choose to use an intermediary for assistance. The benefit is that intermediaries will recommend several properties suitable for you based on your needs within their area.

The biggest feature of real estate intermediaries is their thorough knowledge of their area. Information on the internet may be inaccurate or not updated in time, but the information from real estate intermediaries is usually accurate and timely.

As a buyer, you do not need to pay a fee to the intermediary company for first-hand properties (except for some companies), as they earn money by charging commissions from developers (but ultimately, the cost is borne by the buyers). In most cases, the final price we ordinary people reach through negotiation is unlikely to be lower than the consensus amount reached by intermediaries and developers, so at this point, there is no need to bypass intermediary companies.

Of course, if you have enough confidence or connections, you can still buy first-hand properties without going through intermediary companies. With the development of internet technology, there are more and more channels to obtain property information.

Before going to the sales office, it is best to understand the specific location, product types, and total price of the property. Otherwise, if your budget is only 1 million, but you end up in a community with a minimum price of 8 million, it would be quite awkward.

Upon arriving at the sales office, a property consultant (salesperson) will accompany you to view the property.

The property consultant's reception follows a certain order and cannot be bypassed. However, if you really do not like the consultant who is receiving you, you can request a change. When visiting the same project for the second time, be sure to inform the customer ambassador (the staff responsible for registration at the sales office) who your previous property consultant was; otherwise, due to your negligence, it may lead to a conflict between the two consultants (this has happened more than once).

After the property consultant begins the reception, they will engage in small talk, asking about your understanding of the project, your purpose for buying, budget, and whether you qualify to purchase. Then, they will introduce the entire project’s location map, which includes the project's location, surrounding commercial, transportation, medical, and educational facilities, as well as important mountains, rivers, lakes, famous landmarks, and large industrial parks. It is important to be cautious during this part, as the "distance" information provided is often very imprecise.

For example, when I was a property consultant, the project I worked on was located near the sixth ring road in Beijing, close to the sixth ring. However, we would say it is "outside the fifth ring, inside the sixth ring." By mentioning the fifth ring first and then the sixth ring, it makes the project feel like it is a whole ring closer.

From our project to the core area of Tongzhou New City, it is about 5 kilometers, but I would only say 3-4 kilometers (this is how salespeople speak). Therefore, when listening to the location map, do not take the numbers at face value; if you really want to understand the distance, use the map software on your phone, and it will be clear.

Next is the community model. This part will introduce the community's floor area ratio, greening rate, land area, architectural style, available building numbers, and the types of units for sale.

This part is relatively valuable; you can learn about the latest situation of this property and ask about recent sales (they may not disclose), which unit sells the most (they may lie), what units currently have special prices (there may be none), and what promotional activities are upcoming (there may always be some).

After this, the property consultant will take you to view the show flat and tour the community. If the show flat is within the sales office, you will see it first; otherwise, you will circle around to see half of the community first, and after viewing the show flat, you will see the other half of the community.

While touring the community, you can ask about information that is inconvenient to inquire about at the sales office. For example, what methods can be used to obtain greater discounts (sometimes through intermediaries, sometimes through external connections, sometimes through relationships); which property is the most cost-effective (every ambitious property consultant will be familiar with the special properties on the sales control table, provided you believe this property is worth buying).

When viewing the show flat, we mainly focus on the design, height, and spacing of the layout. This content has been discussed in the first chapter, so I will not elaborate further. The decoration of the show flat is often luxurious, aimed at creating a buying impulse, so even if you really like the decoration style of the show flat, remember that decoration is not within your consideration range, at least not the soft decoration.

Additionally, show flats may also be sold during the project's final phase, but since show flats are primarily for display purposes, there may be hidden issues in places that are not visible.

If you hire your own renovation team, you can seek out the relevant person if problems arise, but if you directly buy the show flat, it will be difficult to claim your rights. Moreover, if problems arise, the cost of dismantling and redoing the decoration will be significant. However, if you clarify these rights and responsibilities before purchasing the show flat, it can still be a good buy.

After viewing the show flat, the sales consultant will take you back to the sales office, provide you with the floor plan and brochure, and if you are interested, they will help you calculate the down payment, inform you of the time to complete the full payment after paying the deposit, and what materials you need to bring.

Here, I will clarify some of the payments made at the sales office. Due to differences in regions, companies, and periods, the names of the payments collected at the sales office may vary.

Some sales offices collect payments in the form of "reservation fee/earnest money - deposit - down payment - full payment"; others may use "small card - large card - down payment - total price (as given by the bank)"; some may simply use "deposit - down payment - full payment." Although the forms differ, the essence is largely the same.

The reservation fee/earnest money/small card amount ranges from 1,000 to 10,000 yuan, possibly more or less, but it is important to remember that the reservation fee/earnest money is clearly refundable in full. If you decide not to buy, you can return to the sales office with the receipt and get a full refund. The purpose of the reservation fee/earnest money is to reserve the property for about 1-3 days, giving you time to consider. After 1-3 days, the property will no longer be reserved for you.

The deposit amount ranges from 10,000 to 50,000 yuan, and for luxury properties, it can reach 500,000 yuan, but more often, it is just a gimmick. In principle, the deposit is non-refundable, and during the period from paying the deposit to completing the down payment, the sales office cannot sell the property to someone else. The meaning of the deposit is that once this money is paid, it secures the property for you. If you breach the contract, the sales office will clearly inform you: the deposit is non-refundable.

However, we may encounter various unexpected situations. If there is a special reason to request a refund of the deposit, what should we do?

At this point, the advantage of first-hand properties emerges; you can explain your reasons to the sales consultant and request a refund of the deposit. If the developer refuses, inform the sales consultant that you will complain to the local housing and urban-rural development committee, as the state stipulates that developers cannot confiscate buyers' deposits under any name. At this point, the developer will likely relent and choose to refund the full amount. However, if the buyer is entirely at fault, a portion of the payment may be forfeited. As long as no online signing has occurred, refunds can be processed. If you are not good at defending your rights, you can hire a professional real estate lawyer to resolve the issue without worry.

After paying the deposit, it is time to gather the down payment and prepare the loan materials. There will usually be about 10 days (more time may be needed for submission) to complete the down payment, and as long as it is done within this time frame, everything will be fine.

When paying the down payment, a purchase contract must be signed. The purchase contract contains many terms, and there are generally no issues; even if there are issues, they cannot be modified. During my time in real estate marketing, I have never seen a buyer have the right to modify a contract. However, there have been many breaches of contract; that is another story.

So, we either sign or buy; that’s all. But should we not review the contract? Of course, we should! We need to check whether the property area, property number, name, and address are correct, and we should also look at what the supplementary clauses in the contract say (almost all original contracts have no issues, but many supplementary clauses may contain unfair clauses or disclaimers). If any issues are found, they should be raised with the property consultant on the spot. If the other party cannot answer, ask the project manager or marketing director.

If you cannot accept the supplementary clauses, you can choose not to buy. However, from the moment the agreement is signed, the contract has legal effect, and the sales office will generally submit the information to the housing and urban-rural development committee's website on the same day or the next day.

Regarding the loan processing, I have detailed this in "How to Buy," so I will not elaborate further.

Once the loan is processed, you will wait for the disbursement and monthly repayments. If, like me, you bought a pre-sold property, unfortunately, until the handover, we cannot move in and enjoy any comfort, yet we must repay the loan monthly, which is indeed a difficult feeling.

If you bought a ready-to-move-in property, you can collect the property from the sales office or property management after the bank disburses the loan. During the handover, you need to bring the purchase contract, invoice, ID card, household registration book, and other materials, and pay the deed tax, public maintenance fund, property fees, and other amounts. The largest amount is the deed tax, which varies based on the area, whether it is the first purchase, and the square footage. For example, due to local government policies, my deed tax was directly exempted (as a graduate purchasing benefit).

If you are collecting a pre-sold property, due to discrepancies between the developer's plans and actual conditions, the area of the pre-sold property may differ from the actual area. In this case, the principle of "more refund, less payment" applies, and the unit price will be calculated based on the agreed unit price.

It is worth noting that if the actual discrepancy exceeds 3%, according to Article 14, Paragraph 2 of the "Interpretation of Several Issues Concerning the Application of Law in the Trial of Disputes over the Sale and Purchase of Commercial Housing," "If the buyer requests to terminate the contract and return the paid purchase price and interest, it should be supported. If the buyer agrees to continue performing the contract, and the actual area of the house is greater than the area agreed in the contract, the price for the portion of the area discrepancy within 3% (inclusive) shall be supplemented by the buyer at the agreed price, and the price for the portion of the area discrepancy exceeding 3% shall be borne by the seller, with ownership belonging to the buyer; if the actual area of the house is less than the area agreed in the contract, the price for the portion of the area discrepancy within 3% (inclusive) shall be refunded to the buyer by the seller, and the price for the portion of the area discrepancy exceeding 3% shall be refunded to the buyer by the seller at double the price." Although such occurrences are becoming increasingly rare, if they do happen, we must use legal means to protect ourselves.

After paying various taxes, you can collect the keys from the property management with the sales consultant's assistance and then inspect the property you purchased. The inspectors will be quite professional and will check the quality of various hard installations and whether the property leaks. If you do not trust the developer's inspectors, you can hire a third-party inspector through online platforms. Regardless, you must be meticulous and thorough because once the property is handed over to you, any issues other than leaks, such as damage to cabinets or windows, will not be repaired or replaced by the developer or property management.

Once the handover is complete, the entire process of buying a first-hand property can joyfully conclude.

Must-See for Homebuyers! Selection Strategy + Negotiation Tips + Purchase Process (Super Comprehensive)#

1. How to Choose the Buying Area?

2. How to Select the Property?

3. How to Choose the Building?

4. How to Choose the Layout and Floor?

5. How to Negotiate the Price?

6. What to Pay Attention to in the Purchase Process?

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This summary is for those who are buying or planning to buy a home. If you find it helpful, feel free to bookmark and follow!

✔ Location Selection#

Buying a home is like choosing a potential stock boyfriend: buy expectations, choose the future.

1. Areas that are valued by the government and have long-term plans.
2. Areas with sufficient job demand: finance > IT internet > manufacturing.
3. Areas with adequate planned supporting facilities (I mean planned, not existing): schools, medical facilities, shopping malls, hospitals, parks, etc.
4. Quiet, clean, and pollution-free areas: no heavy industry, chemical plants, etc., and avoid places close to bus stations and train stations.
5. Try to choose areas within ≤10km of your workplace.
6. Choose areas primarily populated by young people.
7. Avoid areas with overly dense communities and populations; second-hand homes are hard to sell.

▲ Note: Location is the primary factor determining housing price trends.

✔ Property Selection#

1. Never buy apartments; after 40 years, you will own nothing! Only buy residential properties.
2. Buy properties from reputable large developers; quality is guaranteed, and appreciation is assured (do not choose small developers; if they go bankrupt, you are finished).
3. Avoid properties near elevated roads, expressways, main roads, railways, and next to shopping malls.
4. Consider properties with branded property management for better future management and appreciation assurance.
5. Buy properties with a parking ratio ≥1.2; every household will have at least one car, and properties without parking will be hard to sell.
6. If you can buy a furnished property, do not buy an unfurnished one; furnished properties avoid renovation noise and group rentals, which is beneficial for appreciation.
7. Buy properties with a moderate scale of 500-1500 households (excluding villas).
8. Prefer small high-rises over high-rises.

**▲ Note: When you cannot take all the advantages of buying a home, prioritize in order.