FOMO (Fear Of Missing Out) How to deal with it?

Hi everyone,

my partner and I have been living in Switzerland for almost 4 years and have been looking for a plot of land in our home region (RLP, Weinstraße) for about a year. Especially since the birth of our son, we feel even more drawn back because of friends and family. Recently, we received the reservation/award for a plot of land in the new development area and could buy a 470m² plot for around 350,000€. Financially, we are in the fortunate situation that we have saved about 300,000€ ourselves, plus received an early inheritance/gift of 300,000€, so the conditions could hardly be better.

Objectively, we could afford the plot and also the house on it, but now that it’s becoming serious and we have received the draft of the purchase contract, we have started to have serious doubts. Originally, we wanted to build ourselves so we wouldn’t have to compromise on our wishes with existing properties, but meanwhile, due to the insane construction prices, we no longer want/should no longer be able to afford what was originally planned. Sure, we could put up a simple house, but spending so much money and then having to forego certain comforts because prices are currently above 3,000€/m² feels strange. You also don’t want to live in a shoebox.

Basically, we have the disturbing feeling that the decision to buy the plot is driven more by fear. Are we now quickly settling for something just so that we own property? How much will we regret it if we keep renting and in 5 years the prices are even higher? Is this our last chance? What good is all the money if we continue to rent and never can develop ourselves as we could with ownership? These are all questions that are troubling us right now and frankly are causing sleepless nights.

I guess we are not alone with such thoughts. How did you deal with this? Do you have any tips for us?

Fear is not a good advisor. And so, it is hardly possible to give serious advice in a forum after just a few sentences on how you should deal with your situation. Objectively considered: scarcity and/or price increases quickly cause irrational reactions to arise. Hoarding of toilet paper or sunflower oil in Germany is just the abstracted form of this. My thoughts on this would be:

How urgent is the desire to return to Germany? If this desire is strong, then the realistic possibilities of implementation should be tackled. On the other hand, there is more involved than just a signature and a notary appointment. Could you quickly rebuild networks? Is there any reason to stay in [CH]? Would essential reliefs be connected with this step besides the implementation of the house construction (grandparents nearby, etc.) or also relevant risks (lower income, finding a new job)? Is the implementation mainly driven by the fear of getting nothing anymore, or should the alternatives also be taken into account? Would it be a possibility to stay in Switzerland for a few more years and then, in addition to the equity, also include the luxurious advantages of the payouts from the [CH-Rentensäulen], so that you can build your dream house without compromises?

600k available equity is already a luxurious starting point that also enables you to get corresponding loans and a house above the standard, even with the price increase factored in.

The last decades of economic history teach that there have always been limits to growth or price increases. Interest rates are rising, the global political situation is volatile. Whoever lets themselves become unsettled now will make a bad deal. Of course, buying today would be a bet on the future (assuming it can only get more expensive). But waiting is also a bet on the future. Assuming that then you will be fine with the purchase and the circumstances will fit better. And here we are back to the beginning: No one can take away the risk of your decision. But the feel-good factor with decision X cannot be justified by monetary arguments alone.

Make yourselves happy with the house but not financially unhappy. I would always prioritize that you don’t feel uncomfortable with the financing, whether it’s because you’re only living for the house or because you’re afraid of the follow-up financing.

The consideration "ownership or rent" should have been done extensively beforehand. If not, this is the last moment when you can switch without much effort. Basically, I don’t consider renting a shame, but simply a different way of living. Unbound and with fewer upfront costs, but also with fewer freedoms to change the property. By the way, I would not equate free development with ownership; even as a builder, you are restricted by the development plan, state building regulations, the plot, and last but not least the budget. In my opinion, free development is also not characterized by the coolest air space, the biggest window, the fully automated house, or the nicest tiles. But maybe I have a rather pragmatic attitude toward living; hobbies and a nice environment for the family are more important to me.

Personally, I would have liked to have taken an existing property as well, but unfortunately, we simply found almost nothing that was in a reasonable condition and affordable. And the two to which we committed were simply overwhelmed. In retrospect, I’m glad I was somewhat picky and cautiously calculated the renovation. Because with what’s coming now (renovation to new build standards, heat pump requirements, etc.), the renovation is simply also very expensive.

Of course, compromises must be made financially with the build, but many things are also not indispensable. Originally, I wanted a basement and double garage plus space for the catamaran, but I omitted both. The Topcat can also hibernate under the cover, and the cars can be parked under the carport; I saved a lot of money that way and left out a second huge building. Sometimes I still vacillate between "that was good" and "a pity" about the basement. On the other hand, €50k extra for the basement would have pushed the entire financing into the no longer quite reasonable range.

In short, don’t drive yourselves crazy. Certainly, the capital allows for more than a shoebox, even with a significantly smaller loan than most other builders. But in case of doubt, I would always also make sure not to overextend yourself with the house.

How urgent is the desire to return to Germany? If this desire is strong, then one should start addressing the realistic possibilities of implementation. On the other hand, more is involved than just a signature and a notary appointment. Could you quickly rebuild networks? Is there any reason to stay in CH? Aside from building the house, would significant conveniences be associated with this step (grandparents nearby, etc.) or relevant risks (lower income, finding a new job)? Is the implementation mainly driven by the fear of getting nothing anymore, or should alternatives also be considered? Would it be an option to stay in Switzerland a few more years and then, in addition to equity, also include the luxurious benefits of payouts from the CH pension pillars, so that you can build your dream house without compromise?

600k of available equity is already a luxurious starting point that also enables you to get appropriate loans and a house above standard, even factoring in the price increases.

The plan is to return to Germany in 2023/2024, not longer. The network at home still exists (we currently visit friends and grandparents about once a month) and my employer has indicated that I could keep the job in Germany as well (with worse pay..). The only reason to stay in CH is the incredibly high income, low taxes and low expenses (savings rate of 60-70%). Currently we can save almost 100k €/year and would try to continue saving equity until the actual start of construction/delivery. We are quite determined to move back to Germany; money is simply not everything in life. We are aware of how luxurious our situation is, which is why our fears feel quite irrational.

The economic history of the last decades teaches that there have always been limits to growth or price increases. Interest rates are rising, the global political situation is volatile. Anyone who loses their composure now will make a bad deal. Of course, buying today would be a bet on the future (assuming it can only get more expensive). But waiting is also a bet on the future, assuming that you will then be fine with the purchase and the circumstances will be better. And that brings us back to the beginning: No one can take the risk of your decision away from you. But the feel-good factor with decision X cannot be justified only with monetary arguments.

I believe that this is exactly the cause of our fears: no matter whether we decide for or against the purchase of the plot, in both cases we are speculating on future developments that we do not have control over. And a wrong decision naturally hurts especially with amounts of this magnitude. Two weeks ago everything was easy, we just saved and looked for suitable offers, that was it. Now that the plot has been offered to us, we can no longer escape the "decision" and first have to live with it.

Of course, we also know that no one can take the risk away from us, but it helps me a lot to simply write down my thoughts and read other opinions about it. Thank you very much in advance for your words :)

I would say, first use that money to buy an apartment in Germany, rent it out profitably, and after a few years, you will have the value of the apartment plus price appreciation at almost no running costs, since you have the rental income. And then you can still decide (why anyone would prefer to move to Germany rather than Switzerland??) whether to move or stay in Switzerland and build a home there and just visit friends and family from time to time. I would be really happy if I could get a Swiss salary. :(

I would be very happy if I could get a Swiss salary.

But you do know that you then also have to pay Swiss rents and prices. In a city, you quickly pay 4000 CHF rent. Groceries cost 30 to 50% more. Health insurance is paid by the employees out of their own pocket. Etc.