From your set budget, you need to work out your true, realistic budget. You need to take into account all the things that traditional agents assume you know – but you usually don’t (at least the first time around). Such as:

• Stamp duty: purchase fees and taxes are an important item: budget 8% of the price paid to the seller – excluding any agents’ fees or the cost of furniture you could be buying form the seller;

• A bit of work: Even in the perfect house, you will want to make a few adjustments: redo the kitchen, get a paint job in the living room or modernize the upstairs bathroom. Depending on the size of the house, you should set aside 20,000€ to 50,000€;

• Swimming pool or garden: If the house you like doesn’t have a swimming pool, you should set aside 30,000€ to allow you to put one in – or just 5,000€ to modernize the one that might be there;

• Agents: If you choose to use a property finder, their fee will come on top of the price paid at the notaire. Try and negotiate a flat fee so you know exactly what you should budget (without having to get a calculator every time). The seller’s agent fee is including in the price paid at the notaire.

So, if your budget is 500,000€, here is how you should allocate it:

• House improvements: 30,000€

• Exteriors: 10,000€

• Property finder: 17,000€

Which leaves: 500,000€ – (30,000€ + 10,000€ + 17,000€) = 443,000€. Divide by 1.08 to account for the stamp duty (8%), and calculate your “true purchase maximum” (TPM): 443,000€/1,08 = 410,000€.

Obviously, you will need to adjust this computation with your own “search & comfort“ factors.

For example, you may decide that you are happy to buy a property in need of renovation (see below). In this case you will need to increase the home improvement budget drastically. If you are ready tackle a (serious) 1-year project without structural work, you might budget 180,000€ for 180 sq.m (1,000€/sq.m). Under this scenario, your true purchase maximum becomes: [500,000€ – (180,000€ + 10,000€ + 17,000€)] / 1.08 = 271,000€.