QUESTION: Real estate purchase: process: how to estimate the purchase budget and associated expenses?

Estimating the budget for purchasing real estate requires a comprehensive approach, as the cost of an apartment is not limited to its price tag in the listing. Experts recommend calculating finances based on two scenarios—a baseline scenario and a stress scenario. The baseline option takes into account the cost of the property, realtor services, bank commissions, and state fees. The stress scenario assumes a deterioration of the financial situation, the loss of part of the income, or a sharp rise in rates, so it must necessarily include a financial cushion of 10 to 20 percent of the total amount.

When planning the budget, it is important to draw up a complete list of associated expenses in advance that will inevitably arise during the transaction process. This includes notary services, property valuation for a mortgage, life and property insurance, payment for bank transfers and safe deposit boxes, as well as expenses for future repairs and moving. If you are taking out a mortgage, you must consider the down payment and the monthly debt burden, which should not exceed a comfortable level for your family budget.

To avoid finding yourself in a situation of insufficient funds, avoid financial extremes and determine priorities in advance. Clearly define which additional expenses or options you can give up first in the event of a budget deficit. Leave room for normal life and do not direct absolutely all available money toward the purchase of square meters. Record your financial progress using small checkpoints, regularly recalculating the estimate and adjusting your action plan depending on the current economic situation.