Procedure for concluding a real estate sale and purchase agreement
If you're considering buying a property and have already worked through some of the legal content, you probably have a number of detailed questions. Chances are, the most important of all is: which step is the first and how does the whole process come together? In this article, you'll get a preliminary look at the entire process of your property purchase, from contacting a lawyer to registration.
Preliminary consultation
Are there any encumbrances on the title deeds of the property you are considering that could be an obstacle to purchase? Do you have to deal with pre-emptioners? These questions can all be answered by examining the title deed. The title deed should be used as a basis for assessing the legal risks and agreeing the basic legal issues. Based on the purchase price of the property, we need to assess the amount of tax and duty payable and whether any relief can be claimed on these payments. In summary, the preliminary consultation will help us to draw up the framework of the agreement that best protects your interests.
It is important that you have the above examination done before you make an offer to buy the property (especially if you are putting down a deposit or a down payment). If you only find out afterwards that the legal situation of the property is unresolved, this can lead to unwanted complications.
Preparation of the sale and purchase agreement
To prepare your agreement, you will need to provide the following information:
- seller and buyer side personal data
- property details - parcel number, address
- the purchase price of the property
- details of the purchase price, with payment dates and whether cash or bank transfer is the method of payment for each instalment
- if required by regulation, the number and classification of the energy performance certificate for the property (if the property does not have a certificate, it must be obtained; if it does have one, it is valid for 10 years from the date of issue)
- if the purchase price is paid by transfer, the bank account number of the seller(s)
- the planned date of taking possession
- if you are buying a residential property, whether you have sold any other residential property in the last 3 years (if yes, a copy of the sales contract is required - possible discount on state fees)
- whether you plan to sell your other residential property within 1 year of purchase (possible discount on state fees)
Based on the information you send me, I will prepare the entire documentation for you. I will send you the draft contract and its amendments by e-mail and we will adapt it until it is suitable for all parties. If you are financing your purchase with a loan, this should include your lender's requirements: I will make sure that the content of your contract meets the lender's requirements, based on the description published on their website. On the day of signing the agreement by downloading the title deed, we will check that the legal status of the property has not changed in any respect before signing.
Signing the sale and purchase agreement
You can sign the agreement in person, or remotely via Skype software without being present in person. In person at my office, or without attending in person, we can use remote identification and remote signing (via video call) to sign documents with the parties simultaneously or separately. After the signature, I will provide 1-1 copy of the documents (or more if requested).
Land registration (optionally with pending registration) and taking possession
After signing, my office will submit the documents to the Land Registry (also paying the Land Registry registration fee) and I will notify the tax authority of any fee reductions. At this stage, you will have no further work to do.
If your agreement does not stipulate payment in one lump sum, the seller will agree to register your ownership in a separate document named final title registration when your agreement is signed, which will be deposited until the full purchase price is paid. I will submit your agreement to the land registry after you sign it, so you will be registered on a side note immediately after signing - this prevents the seller from selling to anyone else or encumbering the property after you sign the contract. However, the Land Registry will hold your application pending until the submission of your final title registration, so the seller will remain the owner until the full purchase price is received. As soon as I receive confirmation that the full purchase price has been paid, I will submit the final title registration certificate, which I have previously deposited, to the Land Registry, which will register your ownership. As soon as I receive the Land Registry's decision on your registration, I will send it to you by e-mail or, if necessary, by post.
To facilitate the handover and the transfer of the utilities, I will send you a complete and fully evidential handover form for the date of handover, in which you can record the meter reading.
Deleting encumbrances in the course of your sale and purchase
If the title deed of the property you are considering to buy has encumbrances that secures the debts of the seller(s), these must be deleted during the term of the pending registration in order to be able to take possession of the property free of any encumbrance. The safest way to do this is for you to pay the amount needed to delete the encumbrance as a part of the purchase price of the property to the account number indicated in the seller's bank's certificate of debt, instead of the seller, and this will be recorded in your agreement.
The seller obtains the deletion authorisation from the creditor on the basis of the debt paid and sends them to me, I submit it to the Land Registry and the Land Registry deletes the encumbrances on the property, using an accelerated procedure if requested. The seller will bear the cost of this deletion. You will pay the seller the remaining purchase price only after the Land Registry has deleted the encumbrances. If you also take out a bank loan, the bank will transfer it directly to the bank account of the seller as the final instalment of the purchase price. Importantly, in this case, the submission of the final title registration is not only conditional on the seller receiving the full purchase price, but also on the deletion of the encumbrances as provided for in the agreement.
How long will the process take?
Cash sales and donations are typically quickly prepared, with registration completed within 60 days of submission to the land registry, while transactions involving a bank loan may take 2-3 months, and longer for properties in need of relief from encumbrance, to finally register your ownership.
The whole process is carried out in strict compliance with the law and, although it can take a long time, it requires no more than one personal meeting with me if you want to sign your agreement in person. If you choose to sign online, you can do it without a personal meeting.
If you are looking to buy a property, for more information or to request an offer, please contact me at any of my contact details:
📞+36304572289
📧drszalai@drszalailegal.hu