Property Trade Implementation Etc.
How to purchase a swiss property?
In the following you will get practical information how to buy a Swiss property:
- 1. Letter of intent
- 2. Purchase agreement
- 3. The Notary´s function
- 4. No rights of cancellation
- 5. Deed and date of takeover
- 6. The municipality has a pre-emptive right
- 7. Purchase costs
- 8. Financing
1. Letter of intent
Sometimes the Swiss agency ask you to sign a letter of intent, when you want to buy a Swiss real estate, but many agencies don´t do that. It depends!
2. Purchase agreement
When you purchase a property you will have to sign a purchase agreement.
We need a copy of your passport, birth certificate, marriage certificate and of course your primary address and occupation. Former names must be given as well.
When signing, the buyer must pay a deposit of 10 % of the purchase price. The deposit is paid directly to the owner of the property and not to the notary. If the purchaser regret the purchase he/she loose the deposit.
3. The Notary´s function
In Switzerland, it is the Notary who is in charge of carrying out the transaction and he is the one who prepares the deed etc. The notary represents and takes care of both the buyer and the seller's interests.
The Notary´s job is, among other things, to take care that both the buyer and seller understand what they sign. He is responsible for ensuring that the property transaction complies with the law.
Payments in addition to the deposit can be paid to the Notary´s office but in many cases it is paid in parts to the owner, the owner´s bank if there are a mortgage, tax authorization etc. The Notary is covered by a professional indemnity insurance.
The Notary reads out the deed and gives the necessary explanations. Beside specific information on the property and the land, the Notary gives extra information on other issues such as illegal installations, missing permissions, missing insurance for the newly build house, important changes that may be planned in the area like for example highway construction in the neighborhood etc.
As the estate agent is not obliged by law to provide this info to the buyer, we often witness very surprised buyers when they visit the notary and are told about all these additional items which would have had a big impact on their decision to buy had they known beforehand.
For example, if a seller is unable to provide the building permit at the time of signing the deed, you should expect this information to be provided within 2 to 3 weeks after signing the agreement.
In Switzerland it is not mandatory that the owner will provide the purchaser with a report for the condition of the property like in many other countries. Therefor it is very important in our opinion that the purchaser ask a professional construction company to make one.
4. No rights of cancellation
In many countries the purchaser has a right of cancellation but not in Switzerland.
5. Deed and date of takeover
In Switzerland the deed can be prepared very quickly compared to many other countries. Of course some investigation has to be done before it is ready to be signed. But it necessarily don´t have to take long time.
When the deed is ready to be signed at the Notary, the buyer and the seller will be invited to the meeting.
In Switzerland the purchaser and the seller can decide a date for the takeover, compared to other countries where it is the date of signing the deed, that the purchaser take over the property.
The buyer takes possession of the property the same day as the date of take over.
6. The municipality has a pre-emptive right
In many countries the municipalities have a pre-emptive right to buy the property but not in Switzerland.
7. Purchase costs
When you buy a Swiss property, you have to take into account additional costs amounting to about 1,75 % - 3,0 % of the purchase price to cover the Notary, stamp duty etc. The cost depends of which canton your purchase is located.
There are many possibilities to get a loan to finance your purchase.
Many French banks gives loan between 60 % and 80 % of the value of the property. Typical they will ask you to take out a life insurance to guarantee the loan.
Many foreign banks are represented in France widening your options.