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Real estate is a common necessity commodity, and its price fluctuations, pricing mechanisms, and changes in transaction volume 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 only flourish under these general rules.

Real estate, with its financial attributes, is not a short-term transaction but should be viewed as a long-term investment lasting 5-7 years. Such long-term investments require careful decision-making rather than impulsive purchases.

However, this book will not delve into overly complex financial data, 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 real estate novices. 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 those pitfalls, and how to recover if they fall into them. 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 researched and learned independently, 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 while standing 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 small 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 purchasing and selecting a home, combined with my work experience and home-buying experience.

I hope that through this entire process, I can help you, a first-time homebuyer, think more rationally, filter options, and ultimately choose a satisfactory home.

Have the conditions for the house been met?

Want to buy a house? — Yes!

Do you have money? — Yes!

Buy it!

Wait! After all, this is a transaction that can easily reach millions, so don't rush to pay the deposit; let's think it over a bit more.

For first-time homebuyers, instead of worrying about missing the best time to buy a house, 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? This is not about whether the house is under your name, your parents' name, or your spouse's name. It’s about whether you, the prospective buyer, meet the conditions for purchasing a home. Of course, this is not about satisfying conditions like having paid social insurance or taxes for five years or more, 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 conditions for buyers can vary significantly. If you already own two homes and the house you want to buy is in Australia, then 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 this time, the aspect of "who is buying" is simpler than other forms of home buying. The main considerations are as follows:

Whether the available assets are enough to cover the down payment; whether repaying the loan later will create pressure.

Is Your Life Plan Clear Enough?#

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

Is the available asset sufficient to cover the down payment? Will repaying the loan later create pressure?

In earlier years, when housing prices were only a couple of thousand per square meter, we had little financial awareness, and most home purchases were made in cash. However, now, with the rapid 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 housing loans in the later section "How to Buy," but here I will only mention the amount part 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 housing provident fund loans is 3.25%. As a major resident benefit in a socialist country, the loan interest rate for first-time homebuyers can be discounted (up to 15% off, at least 5% off; there have been instances of 25% and 20% off in the past). 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 have a legal job, the employer will generally pay for your housing provident fund, which is part of the so-called "five insurances and one fund." This fund typically earns little interest in the bank and is generally 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 for ordinary families.

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.

China 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%-35% of the total housing price. This means that for a property worth 1 million, the down payment will be between 200,000 and 350,000, depending on the region. Conversely, if we have 400,000 in initial funds, we can consider a house worth 2 million with a 20% down payment.

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

If you put down 2 million and only take out a loan for 5 years, then if you borrow 8 million and choose equal principal payments, guess how much you need to repay in the first month? 165,000! Therefore, after determining the down payment, we also need to consider our 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 that is less than half of your total income is relatively moderate. This means that if your after-tax total income is 10,000, then after deducting the housing provident fund, a monthly repayment of 5,000 or less is acceptable to the bank, and your repayment pressure 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, enter the keyword "mortgage calculator," and input the actual situation to see if the monthly payment is manageable. The longer the term, the lower the monthly payment, but the more interest you will have to pay.

Using the equal principal payment method, the repayment pressure is high in the early stages, but it decreases over time, suitable for friends who plan to repay early (more than 5 years); using the equal principal and interest method, the repayment pressure is low in the early stages, but the interest paid later is high, suitable for those who are temporarily short on cash and plan to take out a loan until the end, or repay the full amount within 5 years after buying.

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 a housing provident fund loan for the first home but opting for a pure commercial loan instead. I will explain the detailed reasons in the subsequent chapter "How to Buy."

When I bought my home, I was certain that 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, borrowing for 30 years at the maximum ratio of 80%. Of course, there were also reasons such as developers not wanting to wait for the long approval process of housing provident fund loans and my low contributions to the fund.

However, for the first home, using a commercial loan, 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 will buy 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 the most caring for their children in the world. However, buying property too early and being bound by mortgages can indeed stifle some young people's "possibilities." How much "love" ultimately becomes "burden" is a question every Chinese family needs to consider.

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

When your life plan is clear enough. You have determined that you will firmly settle 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 stage 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 regard the property as a home to live in rather than an investment made of concrete and steel, you won't panic. 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 also treat the first home as an investment. But you should also ask yourself whether you can withstand future fluctuations in housing prices.

Whether for self-use or investment, the most important question we should ask ourselves about the first home is not "When should I buy?" but "Will I regret it after I buy?" To answer this question, we must first ask ourselves, why buy?

Self-Use or Investment#

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 you must buy this home, even if you believe the housing market will crash tomorrow. After all, how much you earn or lose is secondary; without your partner, you lose half of your world. The same applies to women; even if they really don't want to buy, if not buying will lead to parental opposition to the marriage and they cannot persuade their parents, they will have to choose to buy despite a hundred unwillingness.

2. Should-Buy Improvement Home

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

3. Can-Buy Household Registration Home

If you already have a household registration but need a property to secure it, otherwise, you will lose your registration upon leaving your job; or if you do not 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 household registration has different meanings for different people. However, I believe that in a few years, this uniquely Chinese system will eventually fade away like food stamps. This process may take 10 years or even longer. Therefore, whether to buy a household registration home depends on how much you value the household registration and whether you are willing to spend millions to obtain it.

4. Rationally Purchased Investment Home

If the landlord is too demanding, raising rent every year, and making you buy new furniture even if a table loses some paint, you might want to buy a home to turn your life around and then exploit future tenants; if you've made a lot of money but have no good investment channels, and the Chinese real estate market is so stable, why not buy a property? If you lose money, you can live in it; if you make money, that's great. Originally, finding a good landlord or long-term rental company could solve the problem, but you choose to spend a lot of money to buy a house; originally, you didn't want to buy, but everyone around you, whether friends or family, is discussing buying, so you want to join the buying army.

Such stubborn and conformist people are not uncommon among young people. However, being a "house slave" is not easy. Buying a house has risks, so don't act impulsively. For such impulsive investments, you must calm yourself down and slow down your decision-making process, asking yourself whether you really must buy and whether you are truly ready.

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

But often, we mistakenly equate "self-use" with "investment," or confuse "can" with "must."

Location! Location! Location!#

Where to buy?

"Location! Location! Location!"

Li Ka-shing's saying 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 resale value.

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 houses are suitable for you? Which houses should not be bought? 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, the difference in happiness among people is not significant. However, if it exceeds 5 kilometers, every additional kilometer reduces happiness. Therefore, scientists concluded that the distance between where you live and where you work should ideally be less than 5 kilometers.

While 5 kilometers is quite specific, what matters more to us is time. If we spend less time commuting by car than our colleagues who live within a 5-kilometer radius, why wouldn't we be happy?

Distance is just a rigid and conventionally agreed-upon assessment metric. Moreover, with today's advanced transportation, I believe that over time, this ideal distance will continue to extend. However, the closer the distance, the less time spent commuting, and the more free time one has—who wouldn't be happy? For a first home, the layout and community may not be as 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 home, living within 3-5 kilometers of a hospital is more convenient; however, for general families, it is advisable to stay a bit farther away, as hospitals tend to have high population flow and potential traffic congestion.

• Primary and Secondary Schools: Families with children who hope their kids can walk to school need to consider this. A distance of 0.5-2 kilometers is moderate; if there are no children in the home or if they are willing to take public transport, they can live farther away (children walk at a speed of 3-4 kilometers per hour).

• Commercial Areas: A community with commercial facilities will enhance living convenience, so a community with operational commercial spaces is definitely more comfortable to live in than one without or with closed commercial spaces. Large commercial areas may generate noise and heavy foot traffic, so it is advisable to choose residential locations 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 close to subway and bus stops that does not disturb sleep is an excellent residential location.

• Parks: The closer, the better, ideally within 0.5 kilometers. The reason for saying beyond 0.5 kilometers is to consider that parks may have loudspeakers for public dancing, and avoiding such noise allows for leisurely walks with family in the park, which is undoubtedly one of life's happiest moments.

Places to Stay Away From

• Boiler Rooms, Factories, and Other "Chimneys": 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 away from residential areas; it is best to avoid buying houses downwind of garbage stations or dumpsters, as odors can be blown into the home.

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

• High-Voltage Power Lines: High-voltage power lines are not something to worry about; they are not in the range of places to stay away from, but I mention them here to clarify that 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 m, 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 home" that is highly valued by the public. I plan to discuss this separately because I believe the concept of "school district homes" 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 refers to the differences in teaching resources among different schools, and the closer the schools are, the less significant the differences are. With the improvement of the education system, such differences will certainly narrow or even disappear. A good location will always be accompanied by good educational resources, so there is no need to cling to the concept of "school district homes."

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 "circle," and 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 San Qian" still holds strong guidance even in the 21st century.

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

When is the Best Time to Buy a Home?#

When to buy is often the question of the best time to purchase a home, which involves people's 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 commodity follows market rules; some are obvious, some are subtle, some have long cycles, and some have short cycles. Real estate, even as a large commodity mixed with rigid demand and investment demand, even as a "Chinese manufacturing" product with strong socialist characteristics, is no exception.

Let's start from the perspective of developers' "launches":

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

2. Nowadays, developers prevent unsold tail units by reserving 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 number 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 at a higher price in each phase. The first major opening of the first phase will definitely have the most significant discounts and the lowest overall price. 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 return" 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, unsold tail units have a significant bargaining space.

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

1. There are several channels for rapid housing price increases: rumors - planning - construction - completion. For example, when it was rumored that Tongzhou might become a sub-center, housing prices collectively rose. 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 the city you are in, at least keep an eye on the news.

2. Many sales champion projects are not because of good products, good sales, or good locations, but simply because they are attached to land kings or building kings. For example, as a real estate developer, my neighboring project sold for 100,000 per square meter because it had new land, new products, and new developments. I acquired the land earlier and opened earlier, and my product isn't 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, where there are 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, you only need to consider whether prices are rising fast or slow. The earlier you buy, the lower the price, but you still need to consider your personal cash flow.

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 are not only real but also tend to change ahead of first-hand housing prices.

5. When favorable policies for the housing market emerge, buy as soon as possible because prices have not yet had a chance to rise; when unfavorable policies emerge, buy as late as possible because prices have not yet had a chance to fall.

Aside 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 locations with good environments 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 almost risen for 30 years, and it is foreseeable that real estate will still be difficult to enter a downward channel for a long time to come. This is because China is still a developing country, and the urbanization rate is still 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 conditions, which can be simply summarized as current and future financial situations, family situations, etc.

1. If it is a first-time self-use home, and the assets are sufficient to cover 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 investment is the main focus and self-use is secondary, then you need to consider whether your annualized return on investment is likely to be weaker than the annualized increase in housing prices (10% is reasonable) and whether you will 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), and before changing jobs (to ensure social insurance continuity and ease of loan application) are all good times to consider buying a home.

5. Because it is a large commodity, no matter how urgent the time is, you need to reach a consensus among all family members before making a purchase; otherwise, it may lead to family conflicts due to reckless 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, which is the preferred payment method for both developers and second-hand homeowners, without exception, because 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 done immediately).
• You do not 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, the full payment installment period for developers is within 1-2 months, while for second-hand homes, it may vary depending on the individual.

This is a relatively balanced payment method that still avoids bank loans. Compared to full payment at once, the buyer has some leeway to gather funds and can also control the pace without going through the bank.

3. Housing 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 system.

The biggest advantage of a provident fund loan is its low interest rate, with an annualized rate of less than 3%, which is a benefit or even a subsidized loan for legally tax-paying residents. Compared to commercial loans, it saves a lot of 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; the loan amount has a certain limit, and most of the time, a higher down payment ratio or mixed loans must be used 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 loans 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 approve loans within just 7-10 working days, and the interest rate for first-time home loans will have a certain discount, with relatively fewer documents required for approval, making it easier to get approved. However, the interest rate for home loans is relatively higher than that of 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 uses both provident fund loans and commercial loans together during the home buying process, commonly used when the provident fund loan limit is reached, and the remaining amount cannot be paid in one go.

This payment method can maximize savings for the buyer, allowing them to maintain the down payment ratio while benefiting from the preferential rate of the provident fund loan. Of course, there are also drawbacks, such as sellers being unwilling to wait, the loan approval process being cumbersome, long waiting times, and consuming energy.

The above are all payment methods.

As for the first home in life, for a young person who wants to buy a home, plans to invest or replace it later, and does not want to burden their family too much, my suggestions are as follows:

If you can take out a loan, do not pay in full; if you can take out a long loan, do not take out a short loan; if you can borrow more, do not take out a short loan; if you can use equal principal and interest, do not use equal principal; if you can use a commercial loan, do not use a housing provident fund loan.

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

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

This method divides the loan principal evenly over the total number of months, plus the interest on the remaining principal from the previous month, forming the monthly repayment amount. Therefore, the repayment amount for the first month using the equal principal method is the highest and decreases month by month.

Equal Principal and Interest: The monthly repayment amount remains the same. Essentially, the proportion of principal increases month by month, while the proportion of interest decreases. The monthly repayment amount remains unchanged, meaning that in the distribution of "principal and interest," the proportion of interest is high in the first half of the period, while the proportion of principal gradually increases after the repayment period exceeds half. Therefore, the repayment pressure in the early stages of equal principal and interest is relatively smaller than that of equal principal, but the total repayment amount is larger.

Next, 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 loan, do not take out a short loan; if you can borrow more, do not take out a short loan"?

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 location or time, there are significant discounts. Even commercial loans without any discounts have an interest rate of only 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 so 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 future renminbi, which will be worth less, to buy relatively cheap real estate now?

Although a longer loan term means more interest to be paid, it also means that the monthly repayment amount will be lower, thus reducing repayment pressure. Therefore, I say, "if you can take out a long loan, do not take out a short loan."

At the same time, the amount that can be borrowed for the first home is quite substantial, varying by region and time, allowing for loans of 65%-80%. Since housing loans are a benefit, why not maximize our interests?

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 panic of rising housing prices. Therefore, I say, "if you can borrow more, do not take out a short loan."

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

First of all, this statement is not rigorous, and it may not be suitable for everyone or every 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 a brief period of contributing to the housing provident fund. With a not-so-high income, I have to bear the rental pressure in first-tier cities while managing daily living expenses and repaying the home loan each month. Fortunately, my income will gradually increase with age (maybe), 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 low repayment pressure in the early stages compared to equal principal, and the monthly repayment amount is fixed, it is convenient for me to plan my finances. Meanwhile, 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 increase or may slightly decrease as I age. But I am a young person, and my income will inevitably increase, so 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 scale of assets with less money.

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

Considering all the above reasons, although the total repayment amount of equal principal and interest is larger and it is 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 a man’s sentiment that cannot be eaten and the large cash saved, I sensibly choose the latter.

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

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

Finally, the loan ratio for the first home can be very high, and the total amount will be substantial, but the provident fund amount is very limited and often insufficient; the down payment ratio for the second home is high (40% or more), at which point the provident fund can be used, and with such a low interest rate, an increase of 10% is not a concern. Meanwhile, the second home is an improvement property, unlike the first home, which is a rigid demand, so it can be chosen slowly and viewed slowly. Selling the first home as the down payment for the second home can also allow for a larger 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 loan, do not take out a short loan; if you can borrow more, do not take out a short loan; if you can use equal principal and interest, do not use equal principal; if you can use a commercial loan, do not use a housing provident fund loan." This is my sincere advice for first-time homebuyers.

Having discussed how to buy in terms of payment, 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), and if you can't find me, think about whether you know anyone in the real estate circle. If you do, you can directly reach out to them, share your situation and thoughts, and let them help you with ideas.

Of course, if you don't have any friends in real estate or don't want to find a home 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, 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 skills, Zhihu, Water Reservoir Forum, and numerous real estate self-media and public accounts can definitely meet your personalized needs.

However, the more channels we have to obtain information, the more mixed the information we encounter, and the more likely we are to encounter incorrect or even dangerous information. At this time, we must think carefully and remember the saying, "The more magical it seems, the more likely it is to be a trap." Communicate more with friends and family, and do not work in isolation. 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 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, so I fully trusted 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, counting the number of visits, I had only been there twice. The reason I dared to buy so confidently is that I know that for new 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, bringing an old customer to introduce a new customer can yield the best deals; sometimes, the biggest discounts come through intermediaries; sometimes, simply visiting can yield the largest discounts. However, if you don't have the luck I had, don't worry; you can search for several properties online or directly find the best-rated local intermediary company. (Be sure to find a large-scale intermediary. For new properties, intermediary companies receive rebates from developers and do not charge buyers service fees, and working with larger intermediaries may yield larger discounts.)

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 for a commissioned 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 or industry intermediaries. Simply 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 the lottery. There is no room for negotiation, the price is transparent, and the process is simple and fixed, with no changes possible.

Here, let me briefly mention 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 merely to help the government build and sell houses without making much profit. The biggest feature of such subsidized housing is that the unit price is about 30% lower than the 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 win the lottery for self-use commodity housing 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 house.

What is the difference between a first home for rigid demand and other 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: Also known as new homes, transactions are made with developers.
• Second-Hand: Refers to houses that have been purchased by someone else, transactions are made with the homeowners.

Analyzing the pros and cons of both is essentially about finding their differences, including unit price, location, layout, amenities, loans, risks, and other factors.

• Price: Generally speaking, second-hand housing prices are usually lower than first-hand housing prices. The main reason is that construction costs are lower and the age of the property is longer.

• Location: The location of second-hand homes is generally better than that of new homes. This is because the development of a city typically spreads out from the center, so the closer to the city center and the more complete the amenities, the more second-hand homes there are, while new homes are relatively fewer.

• Layout: Second-hand homes generally have more layout options than first-hand homes. Because second-hand homes are spread across various corners of the city, there is more room for layout selection. However, this is not absolute, and generally, first-hand homes have newer layouts, more reasonable designs, and are more comfortable to live in.

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

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

• Risk: First-hand homes have relatively lower risks. When purchasing a first-hand home, the biggest risk is that most first-hand homes are pre-sale properties, and buyers may not know much about the developer. The time it takes for pre-sale properties to become actual properties can range from a year to several years, during which various uncontrollable factors may arise. Second-hand homes are all actual transactions, so there is no such risk. Once the transfer is completed, you can generally rest easy. However, second-hand homes are often transactions between individuals, and some sellers may deliberately 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 carefully set by sellers.

Overall, if our first home does not require a large down payment, I recommend choosing a first-hand home with lower risks, more transparent processes, and better living conditions. However, if the quality of the second-hand home is not poor, it is purchased through regular channels, and the location is very good, and the down payment is not sufficient, you can still choose a second-hand home 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 after 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 after expiration remains unclear. Besides the most obvious difference in usage duration, ordinary residential and commercial residential properties also have the following differences:

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

However, this is not absolute; some developers can negotiate with local governments to convert commercial residential properties to residential water and electricity rates. Therefore, before purchasing commercial residential apartments, be sure to confirm the water and electricity charging standards with your property consultant.

2. Water Supply, Gas Pipeline Differences: In recent years, ordinary residential properties have had water supply and gas pipelines, but since commercial residential properties are originally commercial land, some lands may allow the construction of commercial residential properties but do not permit the installation of water supply or gas pipelines. In 2017, there were even cases in Shanghai where land was allowed during the approval process but not during sales, 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 register household registrations, cannot determine school districts, and can only be self-occupied or rented out. However, one advantage of commercial residential properties is that they can register companies, which ordinary residential properties cannot do, as commercial residential properties are built for companies.

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% (after the purchase restriction policy was introduced in Beijing in 2017, commercial residential properties could not be purchased through loans and could only be bought in corporate form), and the maximum loan term is 20 years, with interest rates increased by 10% over the bank's benchmark rate. In contrast, some regions' ordinary residential properties can enjoy a maximum loan 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 restrictions or loan restrictions (Beijing has already begun to impose purchase restrictions on commercial residential properties in 2017), which is a significant advantage and has strong investment attributes.

5. Land Supply Situation 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 characteristic that commercial residential properties are difficult to sell because of the abundant supply, making 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 3% for 50-year properties. However, commercial residential properties do not have the same restrictions on buying and selling as ordinary residential properties, and there are no "full two unique" or "full five unique" conditions; as long as the property title is obtained, buying and selling can proceed, and there are no tax differences.

7. Usable Area Differences: Since commercial residential properties are often set up as hotel-style apartments, they have more impressive lobbies, wider corridors, and more shared areas. The usable area for ordinary residential properties is higher, around 80%, while the usable area for commercial residential properties is lower, around 60%. (Usable area: the area available for residents to use / the total building area, compared to the area per household / 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 residential properties in adjacent locations in the same city. Therefore, the rental yield and price-to-rent ratio for commercial residential properties are higher, and they are 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 being pressured by your mother-in-law to buy a house), you can also consider purchasing commercial residential properties.

What Makes a Good House?#

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

Everyone has their own likes and dislikes, so when it comes to personal evaluation of a "good layout," there will be differences. However, the "best" layout must meet the living needs of all family members and provide comfortable living without any "wasted" space.

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

What do men and women of all ages love?

• 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: Single-story is preferred over duplex; south-facing bedrooms are preferred over north-facing. As time accumulates wisdom, it also brings pain and aging, so compared to duplexes, stacked villas, or multi-story villas, the elderly prefer single-story residences/villas that do not require climbing stairs. Moreover, the elderly love to spend leisurely afternoons sitting on the balcony soaking up the sun. Therefore, if they can have a south-facing bedroom, they will be very happy.

• Children: A large and bright living room, 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 becomes standard, and as they grow older, their independent awareness becomes more pronounced, making a separate and private bedroom increasingly important.

What constitutes a "rectangular" layout?

It is said that "rectangular" layouts are good, but who can find a "rectangular" layout?

A rectangular layout is not a square layout!

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 space. (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 Each Room Be?

In a word: large kitchen, large bathroom, large living room, small bedrooms.

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

2. The living room should be > 20 square meters, and it should be rectangular, 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 Between Different Rooms?

1. Kitchen

Since kitchens produce smoke, ventilation is very important and should be located downwind; otherwise, smoke may backflow. Additionally, kitchens are cooking areas that require strict hygiene conditions, so they should be separated 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 breeding and facilitate cleaning.

2. Bathroom

Due to the dampness of bathrooms, when renovating or choosing a finely decorated house, a separate wet and dry design should be selected. Additionally, due to dampness, bacteria can easily breed, so a bright and ventilated design is also preferable, ideally located downwind. (If conditions allow, from a hygiene and privacy perspective, it is best to choose layouts 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 unobstructed as possible. If conditions allow, floor-to-ceiling windows are recommended for brightness and openness.

4. Bedroom

The elderly prefer sunlight, so the elderly room is recommended to face south; children prefer shade, so the children's room is recommended to face north.

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

What Makes a Good House?

Is a "good house" just about having a good layout? Not at all; we have many more factors to consider.

1. Floor Height and Net Height

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

The national requirement is that the residential floor height must not be less than 2.6 meters. A person with a height of 180 cm will feel no sense of oppression when the net height is 2.4 meters.

A lower net height can 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 closely related to the layout, arrangement, and glass area of the house. Here, I remind everyone not to rely solely on floor plans but to view the property in person.

2. Floor Level

• Low Floors: Easy to access, easy to escape in emergencies, but generally noisier, more prone to theft, more mosquitoes, and may have moisture issues.

• Middle Floors: Relatively balanced, quiet, and safe. As the floor height increases, the view becomes more expansive, 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 the "dust layer," where the air is most polluted; this saying is a rumor and should not be believed.

3. Usable Area Rate

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

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

4. Greening Rate

Greening rate: the ratio of the total area of vertical greening projections to the land area of the community.

The national regulation states that the greening rate must not be 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 sure 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. Plot Ratio

Plot ratio: the ratio of the total building area of the community to the land area.

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

6. Building Spacing

Building spacing: 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 floors) and multi-story > 6 meters; multi-story and high-rise (12 floors and above) > 9 meters; high-rise and high-rise > 13 meters. Discussing ratios without considering distances is not reasonable.

The benefits of large building spacing include: a sense of independence; a broader view; no direct line of sight issues; ample sunlight.

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

Only Properties with Five Certificates Are Reliable#

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

The five certificates for commercial housing are the "Construction Land Planning Permit," "State-owned Land Use Right Certificate," "Construction Project Planning Permit," "Construction Project Construction Permit" (also known as the "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 set up a sales team, when construction can begin, when the sales office can be decorated, and when the first launch can occur. The acquisition of these certificates is sequential, from front to back.

The one that is most relevant to us, and perhaps the only one that matters, is the last "Commercial Housing Pre-sale Permit." This is because once the developer obtains this permit, they can launch the sales.

Most developers choose to open for sales shortly after obtaining the permit. Additionally, advertising laws have become stricter, and developers cannot openly and explicitly 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 irregular operations; a simple way to identify is to check if 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 a First-Hand Home#

The process of buying a first-hand home is not complicated.

Let me share an extreme case: when I was a property consultant, I had a client who came to the sales office around 1 PM just to take a look, saying she was passing by. I was ready to introduce her to the area map, sand table, etc., but she insisted on seeing the model room. Unable to persuade her otherwise, I took her to see it. After about 10 minutes, she received a call from a friend inviting her to go shopping, and she decided not to continue listening. Then she took out her bank card and started paying the deposit. Yes, it was not a reservation deposit but a non-refundable deposit. The entire process of viewing and buying took her less than an hour.

Of course, this is a very special case. Most homebuyers 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 advantage is that intermediaries will recommend several properties suitable for you based on your needs in their area.

The biggest feature of real estate intermediaries is their thorough understanding of the area they operate in. Information on the internet may be incorrect or outdated, but the information from real estate intermediaries is mostly accurate and timely.

As a buyer, you generally do not need to pay fees to the intermediary company for first-hand homes (with some exceptions), as they earn money by charging commissions from developers (but ultimately, the cost falls on the developers). In most cases, the final price we ordinary people reach through negotiation is difficult to be lower than the consensus amount reached by intermediaries and developers, so there is no need to bypass intermediary companies.

Of course, if you have enough confidence or connections, you can still buy a first-hand home without going through an intermediary company. With the development of internet technology, there are now many 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 reception by the property consultant follows a certain order and cannot skip levels. 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 oversight, it may lead to a conflict between the two consultants (I have seen this happen more than once).

Once the property consultant begins the reception, they will engage in some 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 essential to be cautious with the "distance" in this part, as it is very imprecise information.

For example, when I was a property consultant, the project I worked on was located on the outskirts of Beijing's sixth ring road, 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, the project feels like it has advanced a ring.

As for the distance from our project to the core area of Tongzhou New City, it is about 5 kilometers, but I would only say 3-4 kilometers (salespeople often use this kind of language). Therefore, when listening to the location map, the numbers should not be taken at face value; if you want to know the distance accurately, use the map software on your phone, and you will see it clearly.

Next is the community sand table. This part will introduce the community's plot 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 development and ask about recent sales (they may not disclose this), which unit sells the most (they may lie to you), which unit currently has special prices (there may be none), and what promotional activities are coming up (there may always be some).

After this, the property consultant will take you to see the model room and tour the community. If the model room is within the sales office, it will be viewed first; otherwise, they will take you on a circular route, first viewing half of the community, then the model room, and finally the other half of the community.

While touring the community, you can ask about information that is inconvenient to inquire about in 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 (any ambitious property consultant will be familiar with the special offers on the sales control chart, provided you think this development is worth buying).

When viewing the model room, we mainly focus not on the decoration but on the layout design, floor height, and building spacing. This content has been discussed in the first chapter, so I will not elaborate further. The decoration of the model room is often luxurious, aimed at inducing you to buy, so even if you really like the decoration style of the model room, remember that decoration is not within your consideration range, at least not soft decoration.

Additionally, model rooms may also be sold during the tail phase of the project; however, since model rooms are primarily for display, there may be hidden issues in places that are not visible.

If you hire your own renovation team, you can seek the relevant person in charge if issues arise, but if you directly purchase the model room, it will be challenging to seek redress. Furthermore, if problems arise, the cost of dismantling and redoing the renovation will be significant. However, if you clarify these rights and responsibilities before buying the model room, it can still be a good purchase.

After viewing the model room, the sales staff will take you back to the sales office, bring 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 times, the names of the payments collected at the sales office may vary.

Some sales offices collect payments in the form of "reservation deposit/intent deposit - formal deposit - down payment - full payment"; others may use "small card - large card - down payment - total price (as provided by the bank)"; some may simply and straightforwardly use "deposit - down payment - full payment." While the forms may differ, the essence is largely the same.

The reservation deposit/intent deposit/small card amounts range from 1,000 to 10,000 yuan, possibly more or less, but it is essential to remember that the reservation deposit/intent deposit is clearly refundable in full, and if you decide not to buy, you can return to the sales office with the receipt to get a full refund. The purpose of the reservation deposit/intent deposit 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 formal deposit amount ranges from 10,000 to 50,000 yuan, with some luxury properties reaching 500,000, but more often, this is just a gimmick. In principle, the formal 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, the property is yours. If you breach the contract, the sales office will clearly inform you: the deposit is non-refundable.

However, we inevitably 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 advantages of first-hand homes come into play. You can explain your reasons to the sales staff and request a refund of the deposit. If the developer refuses, you can inform the sales staff that you will complain to the local housing construction committee, as the state stipulates that developers cannot confiscate buyers' deposits under any circumstances. At this point, the developer will likely relent and choose to refund the full amount. However, if the buyer is entirely at fault, part of the payment may be forfeited. As long as no online signing has occurred, a refund 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’s time to gather the down payment and prepare the loan materials. There will typically be about 10 days (additional time may be needed for submitting applications), and as long as the down payment is completed within this time frame, everything will be fine.

When paying the down payment, you will also need to sign a purchase contract. The purchase contract contains many terms, and there are basically 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, breaches of contract do occur, but that’s another story.

So, we either sign or buy; that’s all. But should we not read the contract? Of course, we should! We need to check whether there are errors in the property area, property number, name, and address, and also see what the supplementary clauses in the contract state (almost all contracts are fine in the main text, but many supplementary clauses may contain unfair clauses or disclaimers). If any issues are found, they should be questioned on the spot with the property consultant. If the other party cannot answer, ask the project manager or the 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 construction committee's website on the same day or the next day.

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

Once the loan is completed, you will wait for the funds to be disbursed and start repaying the loan monthly. If, like me, you bought a pre-sale property, unfortunately, until the handover, we cannot move in and enjoy any comfort, yet we must repay the loan monthly, which indeed feels unpleasant.

However, 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 funds. When collecting the property, you need to bring the purchase contract, invoice, ID card, household registration book, etc., and pay the deed tax, public maintenance fund, property fees, and other amounts. The largest portion is the deed tax, which varies based on the square meters of the property, whether it is the first purchase, and the location. For example, in my case, due to local government policies, my deed tax was directly exempted (a policy for graduates purchasing homes).

If you are collecting a pre-sale property, due to discrepancies between the developer's plans and actual conditions, there may be some differences between the actual area and the contracted area. In this case, the principle of "more refund, less supplement" will apply, 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 Commodity Housing Sale Contracts" by the Supreme People's Court, "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 contracted area, the price difference for the portion within 3% (inclusive) should be supplemented by the buyer at the agreed price, while the price difference exceeding 3% should be borne by the seller, and ownership should belong to the buyer; if the actual area of the house is less than the contracted area, the price difference for the portion within 3% (inclusive) should be refunded to the buyer by the seller, and the price difference exceeding 3% should be refunded to the buyer by the seller at double the amount." Although such occurrences are becoming less frequent, if they do happen, we must use legal means to protect ourselves.

After paying various taxes, you can go with the sales staff to the property management to collect the keys 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 house 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 apart from leaks, such as damage to cabinets and windows, will not be repaired or replaced by the developer and property management.

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

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

1. How to Choose a Buying Area?

2. How to Choose a Development?

3. How to Choose a Building?

4. How to Choose a Layout and Floor?

5. How to Negotiate When Buying a Home?

6. What to Pay Attention to in the Specific Buying Process?

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A summary for homebuyers or those planning to buy a home. If you find it useful, 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 the government values and has long-term plans for.

2. Areas with sufficient job demand: finance > IT internet > real estate.

3. Areas with sufficient planned amenities (I mean planned, not existing): schools, medical facilities, shopping malls, hospitals, parks, etc.

4. Quiet, clean, and pollution-free areas: away from heavy industry, chemical plants, and other pollution sources, not too close to bus stations, train stations, and other chaotic places.

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.

✔ Development Selection#

1. Never buy apartments; after 40 years, you will own nothing! Only buy residential properties.

2. Buy quality developments from large developers; quality is guaranteed, and appreciation is assured (do not choose small developers; if they go bankrupt, you will be finished).

3. Avoid being near elevated roads, expressways, main roads, railways, subway lines, or shopping malls.

4. Consider developments with branded property management; later management is guaranteed, and appreciation is assured.

5. Buy developments with a parking ratio ≥1.2; every household