FAQ: Buying a House in China

Well, I guess the title of this post says it all, for those of you who didn’t already know.  It also explains a bit why I’ve been MIA in posting for the last few weeks.

My husband and I bought a house!  Or, as I’ve been joking, we are now officially a couple of HOs (home owners, jeez!).

The title to our house!

The title to our house!

Not many people knew that we were even in the process of looking; we’d kept it on the quiet side, since we suspected that it would take some time to weed through houses and find something we liked, and then to actually finalize a deal and have it all work out (my husband will tell you that this is a direct result of his having a tremendously picky wife, but there are other reasons too).

But for the last few weeks, we’ve been running around to various offices to show identifications and sign various papers, transferring money between different accounts, and all the other fun stuff that goes along with purchasing a home.

So now that the deed is done, I feel I’ve become something of a self-proclaimed expert on purchasing a house in China (OK, not really an expert, and a lot of this is my personal experience, so it may not be true all the time, but I’m also not making any of this stuff up).  And since you’ve been inundating me with questions about it (ha!), I figured I would take some time out of my busy schedule to answer some.

Q:  What types of houses can I choose from in China?

In China, when I say “house” I mean “apartment”.  That’s what you’re likely going to get, end of story.  Moving on…there are three options you may choose from when deciding to purchase a house.  They are as follows:

1)      Buy a new house that isn’t even built yet.  This is the cheapest option, but you will have to buy your home based solely on a floor plan printed on a pamphlet, and then you will have to wait years (potentially 3 to 5) for the development to be finished before you can take possession.  And at that point, you will still have to actually finish the home to make it liveable, since newly built homes in China consist of concrete floors, walls, and ceilings, windows, a few electrical fixtures, and plumbing access points.  Also, remember that the whole time you’ve been waiting for your house to be built, you’ve been making mortgage payments (if you’ve taken one out) and are also potentially paying rent on your current abode.

A floor plan like this, only often without the numbers representing the dimensions.

A floor plan like this, only often without the numbers representing the dimensions.

2)      Buy a house that is built, but unfinished.  This is more expensive than option 1, and there are fewer of these homes available.  You’ll still have all the decorating to do, but at least the home physically exists already (if you’re really lucky, you might even get to bundle up in the dead of winter to go and walk through it, complete with sunglasses and facemask disguise as your husband tells the realtor that you hail from Xinjiang, not a foreign country…or maybe that’s just me).

3)      Buy a second-hand home.  This is probably the most expensive option, unfortunately (so of course, it’s the route we took…sigh), since China appears to have yet to catch on to the concept of depreciation – a 15-year old house, complete with 15-year old wiring and plumbing (and done to Chinese construction standards, no less), is often at least as expensive as a new house here.  Because, why not, right?  This kind of house might actually be finished inside, which the sellers will use to convince you it’s great, although it may end up being really cheap and ugly and require you to tear everything out to re-decorate anyway (but again, maybe that’s just me).

Q:  What do I need in order to buy and own a house in China?

Here is a list of things that I have found to be important:

1)       A pile of cold, hard cash, or access to a lot of it.  Mortgage rules are different here, and they even differ according to whether you are buying a first-hand house in a new development or a second-hand house, and banks often won’t lend much anyway.  Sellers want cash in hand, and down payments are often in the 60-70% range, if not the full 100%.  But if you’ve got a suitcase of crisp bills just burning a hole in your pocket, then by all means, go ahead.  Gold, gems, and pirate booty might do the trick in some instances, but not many, so best to convert it to cash beforehand.

2)      A Chinese person to do an awful lot of the work – in my case, that was my wonderful husband.  Even if you speak and read and write Chinese well (which I don’t) and are able to access the websites listing homes for sale, talk to realtors, and visit companies selling new developments, I happen to think you’d be a lot better off to have a Chinese person to do it.  Not because foreigners aren’t allowed to buy homes here (those rules are changing – I don’t think a foreigner can own alone, but they have recently allowed foreigners to own jointly).  Not because of the “relationships” one needs to have or make in order to get things done with the various government offices you have to deal with.  And not just because of all the jargon and details involved.  Simply because, like buying almost anything else in this country, if people are aware that a foreigner is involved, they will raise the price.

3)      Patience.  Dealing with Chinese people selling anything can be a chore, but they are especially memorable when it comes to real estate.  Throw your logic out the window.  You may have to deal with the bizarre attitudes of sellers/previous owners, and trust me, it’s not pretty.  One house we had pretty much decided to purchase was suddenly already sold overnight, but then was available again a few months later.  Another was for sale by a lovely old lady who was willing to give us a pretty good deal on it, until we discovered that she was not actually the owner on the title – the house belonged to her kids who were not so willing to agree to the deal we’d struck with granny, and the house was taken off the market, only to reappear a few months later, re-listed by granny again, we discovered.  A third house we considered was on the market for many months, and the owners decided to raise the price when it continued to go unsold.  Several others that we considered had the price increased substantially by the sellers requiring us to pay their share of the fees to change the names on the title.

4)      Your passport, complete with a valid residency permit.  This is your only piece of acceptable identification in this country, and you’ll need to photocopy and present it along with all your paperwork at government offices and banks.  So if yours is, for example, at the local police station having its residency permit renewed, you should get it back so you can use it…but preferably after the new residency permit is adhered to one of the pages, since if you do it before, you’ll sweat like crazy every time a worker examines your old one, thinking that this will be the time they’ll notice you’ve “overstayed” your visa.

Many, many copies of this will be taken.

Many, many copies of this will be taken.

5)      Proof of your income in China.  If you’re applying to the bank for a mortgage, they’ll want to see proof of your income, which means you’ll have to go to the bank, show your passport, stress about whether they are going to notice your visa is technically expired, and then ask them to print off an account history for several months and notarize it.  You’ll also need to get your employer’s official stamp on some documents, so make sure you know who the “keeper of the chop” is at your office.

Q:  How long should I expect the process to take?

If you’re not as picky as I am and you don’t really care about the size, layout, quality, or location of your house, then not long at all.  You can start looking and just buy the first one you come across.  However, if you’re even a little like me, I’d say at least a few months, depending on how intensely you are looking.  We had been looking for about a year before we finally found and purchased our house.

Q:  Where will I have to go to do all the paperwork?

All.Over.The.City.

Honestly, this wouldn’t be China if the process was streamlined and straightforward and the various offices related to housing were all located near one another, would it?  We had to make appearances at (in no particular order, and sometimes more than once):  a tax office, an office to print new blueprints and other documents and put my husband’s name on them as owner and notarize them, an office to change the name on the ownership title, three different banks, another government office to file the purchase, yet another government office where I don’t even know what we did, and the realtor’s office.  And those are just the places that I went; I’m sure my husband did even more running around that I didn’t have to be present for.

Many of the offices will also use filing systems such as this, the "piles of papers stacked on a table and I'm sure they will be fine if we open the window" method.

Many of the offices will also use filing systems such as this, the “piles of papers stacked on a table and I’m sure they will be fine if we open the window” method.

Q:  So did you say I won’t get to see the house before I agree to purchase it?  What the heck is up with that?

Chances are this could be true.  Knowing there is a foreigner involved will change the dynamic of the whole process, so it might be best to stay out of sight until contracts are signed.

I didn’t go to any meetings or viewings for the house we ultimately bought (my husband did all the work, took pictures for me to look at, and drew floor plans on paper so that I could have some idea of what the place looked like).  In fact, I didn’t make an appearance at all until it was absolutely necessary for me to be present, which was after the deal had been struck, the contract had been signed and we were changing the names on the house title.

I only got to sign my name and stamp my red fingerprint once during all the proceedings, but my husband got to do it a lot  more.

I only got to sign my name and stamp my red fingerprint once during all the proceedings, but my husband got to do it a lot more.

Which leads you to question, I’m sure, how could I possibly agree to buy a house I’d never even seen?  Warily, I suppose, is the best answer.  But out of necessity as well, because, foreigner or not, that’s often the way things are done here.  I wasn’t kidding when I said that most people in China simply buy a house that isn’t even built yet, based on a floor plan.

Q:  What should I look for in a house in China?

You know all that talk about “curb appeal” and all those tips about things to look for when purchasing a home?  Throw it all out the window if you’re considering buying a house in China.

First of all, curb appeal doesn’t exist here.  Some of the newest buildings in our city look like they’ve been standing for a decade, rust running down the tiled exteriors, cracks in those tiles, and decrepit air conditioning units hanging out windows – yet those buildings were finished just last year.  And if you’re concerned about having a nice view, well…most days any view you have will be obscured by smog here anyway, so it doesn’t really matter.

And the helpful tips about checking a home’s water pressure, the quality of doors and windows, that floors are level and walls are straight, and that appliances and fixtures work?  Well, remember when I said that you’d likely be getting just a concrete box…yeah.

When buying a home in China, you’ll find yourself agonizing over and desiring things that would never have crossed your mind in a million years back home.  Does this house run the width of the building and have windows on each end so I can open them and get a cross breeze?  Is there a southern exposure so I will have a place to hang my laundry to dry?  Are the pipes going to be run inside or outside of the cement walls?  Can I physically turn around in this kitchen?  Am I able to walk through the doorways, or will I have to turn sideways?  Is there a giant television screen on the building across the street that is going to play baijiu advertisements all day and half the night and shine in our windows?  It’s great that there are two bathrooms in this house, but why are they located side-by-side?  And related to that, is there a bathroom located near the bedrooms, or am I going to have to walk almost to the front door to use the facilities in the middle of the night?

Q:  Any other sage advice?

RANT ALERT.  House prices in China are a joke, especially considering what you get out of the deal (typically a cramped, concrete box, surrounded at close range by hundreds of other cramped, concrete boxes).  And while China continues to implement policies to attempt to curb rising home prices, I’m here to tell you that it isn’t working.  Example:  recently, the government has been trying to crack down on families owning more than one home (living in one, perhaps, and holding on to the others to sell for a maximum profit down the line).  For second-hand home sales, there is now a tax based on the increase in value of the home since its original purchase, and buyers and sellers are to split this cost – the idea being to penalize both sides somewhat.  But, as in our case, most of the original home owners are avoiding this by simply refusing to sell unless the buyer also covers the seller’s share of the tax, making the home even more expensive to buy.  Another way some Chinese are avoiding the penalties of owning more than one home is to simply get a divorce and then each spouse keeps a home.  They remain together but legally are in the clear.  So while the Chinese government is trying to implement these policies to control their housing markets, they haven’t yet stopped to consider a way to actually enforce these policies the way they were intended, resulting in first-time home owners like us, just looking to buy a single house to live in, being penalized, rather than the rich officials who already own multiple homes and are selling them for profit.

A look at just half of the government office where people are rushing to file changes in home ownership before new legislation comes into effect...on a non-busy day.

A look at just half of the government office where people are rushing to file changes in home ownership before new legislation comes into effect…on a non-busy day (and by “non-busy” I mean that there were only about 500 people there and a person could still move and breathe a bit).

OK, rant over.

Q:  So, if all of the above is true, why did you go through the trouble and expense of buying a house? 

Well, because we wanted to own our own home and not have to worry about having to move once a year when the lease on our rented apartment comes due because the landlord decides to raise the rent more than my employers are willing to pay, or because the landlord decides to move back into the apartment.  We also wanted a place we could decorate to not only our tastes, but also our needs and wants (and by this I mean places for storage, kitchen cupboards, a sink that isn’t hung near my knees, etc).

In the end, as a result of my pickiness and my husband’s patience and persistence, we managed to find a house that we think will suit us very well for a long time.  And as soon as we get the key, we can get to work on tearing out some of their “decoration” so it can be replaced with things that will work for us.  And that’ll be a whole different set of posts, I’m sure!

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25 Responses to FAQ: Buying a House in China

  1. expatlingo says:

    Congratulations on your new house! I love the bit about dressing up to hide your foreignness during one of the house tours; dying for a clearer mental image on how you disguised yourself.

    • kjsandor says:

      Thanks! I didn’t have my husband take a photo, but it was during our record smog days, as well as winter, so I had on my layers and down coat, a knit hat, scarf and gloves, I’m sure. Then added would have been my sunglasses (to cover my blue eyes), and a facemask that I’d been wearing to try to filter out a bit of the smog. I’m fairly certain that my reddish hair and super white skin gave me away anyway! ;)

  2. Sally says:

    Congratulations on the new home! My commitment-phobe self can’t even imagine buying a home in the States, let alone China! Wow.

    • kjsandor says:

      Thanks! Like I said, we wanted a place to be able to make our own and stay put in (though there is a part of me that agrees with you and can’t believe I’ve just committed to staying in China for at least 15 more years – the length of our mortgage!). :)

  3. Julie says:

    What an interesting post! I’m an expat too, though I moved from the US to the Netherlands; I teach English to students in China and Taiwan though through online classrooms, and it’s really neat to hear about house-buying from a western perspective. I hear a lot from my adult students about the high status of homeowners there, and that owning a home is a pretty big deal.
    Congrats on your new purchase! I look forward to reading your blog :)

    • kjsandor says:

      Thanks! I would say that it seems like owning a home is becoming more commonplace here, so I am not necessarily convinced that homeowners are very high status. Perhaps it differs depending on the area of the country and the size of the city, though. However, it is still far too common that a man MUST own a home in order to be considered an eligible candidate for marriage, which in my opinion, is very sad (and hard on the men and their families financially).

  4. michelle says:

    Congratulations…on making it through the process alive! I can’t agree more with your statement “Honestly, this wouldn’t be China if the process was streamlined and straightforward and the various offices related to housing were all located near one another, would it?” It takes another expat to truly understand the pain this must have been and I sincerely congratulate you on getting through it…AND you got a house/apartment out of it!

    • kjsandor says:

      Hahaha, very true! It was almost literally painful at times to deal with some of the ridiculous stuff (I mean, like I said, who RAISES the price of their house after it has gone unsold on the market for several months?!). But if we ever get the keys, you’re right, at least we got a house out of it all!

  5. Sam says:

    Such an interesting post! I can’t imagine buying a home in another country – sounds scary enough to do it in my home country. Best of luck moving in and making it yours :)

    • kjsandor says:

      Thanks! It is rather nuts, but I hope it will be worth it to have my own style and my own things there, and not have to worry about moving every year!

  6. Pingback: Real Estate Headlines for the Second Week of April | Coldwell Banker Blue Matter

  7. Pingback: FAQ: Buying a House in China – Part 2 | talesfromhebei

  8. gkm2011 says:

    Wow – you are really in for the long haul! We’ve talked about buying, but never seriously – I have a place in Chicago and I don’t think I want to be a dual property owner (and Shanghai housing prices are like buying in Manhattan.) We’ll see – congratulations!

    • kjsandor says:

      At least the next 15 years – the length of the mortgage! ;) I don’t own back in Canada, and we’ve always planned on being here for quite a while, and we wanted the place to be OURS to stay in and not have to move, and to decorate the way we want. So it made sense for us. I don’t know if we would have in a market like Shanghai.

  9. Rosie Zhao says:

    Wow! You made it through the process. I think my husband and I would have ended up in divorce court before getting through this nightmare! I am so grateful he had a place before we got married (which I would never have expected; like you, I am saddened that this is fastly becoming a requirement for Chinese men). I can, however, totally relate to running all over (just to get my damn visa done every year). Thanks so much for sharing your experiences, really fascinating stuff.Congrats to you both for surviving the house hunt, soon you can enjoy! ~Rosie in Chengde

  10. Pingback: Tips for Buying a House in China | michelle guo

  11. What can I say? But welcome to your new home and enjoy your stay! God Bless! http://www.indyhomehunter.com/

  12. Pingback: FAQ: Buying a House in China | Bonjour! C'est moi.

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  14. I’m a real estate agent in the US. I have a client (via email) who wants to buy a home here. Do you have any random thoughts on someone in China buying a home in California? Thanks, Ann

    • kjsandor says:

      My goodness, I’m really not an expert on this stuff at all, so I’d take anything I say with that warning. I will say that I’ve read about a lot of wealthy Chinese buying property overseas, so it’s not too surprising. There are starting to be a lot of people here with money to burn (unfortunately, none of them seem willing to share that money with me ;) ), so it’s likely legitimate. Other than that, I really don’t know anything about it all – whether they would actually move or travel there to use the property, or use it as an investment, or use it as a way to get some of their money out of the country. Good luck with things, and sorry I can’t be of more help.

  15. Jack says:

    Holy crap, that is some serious commitment!
    Also, just out of curiousity, have you consider moving back to Canada and buy a house there? Isn’t it more affordable (and more livable) over there?

    • kjsandor says:

      We have no plans to move to Canada in the immediate future. We both have good jobs here and can afford a life we probably couldn’t afford in Canada. We also have to consider that his family is still in China and he is the only child, so there are commitments there that we have.

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