How to book a real estate purchase?
On the real estate market there are many sellers who want to sell their real estate under the conditions and the price that best suits them and many customers who want to invest their savings in buying a real estate. Precisely because of such situation in the market it is very important to choose the right moment and to ensure that the seller sells his property right to you.
Nobody wants to miss the opportunity and because of indecisiveness miss the opportunity to buy a property that it is interested in. Due to indecision, and often too late reactions related to showing interest for real estate, another potential buyer may be quicker than you.
Therefore, when visiting real estate, it is recommended that you take the money with you and be prepared to book the property. There are two common ways of securing the purchase of the desired real estate; concluding pre-agreement and prepayment and booking as an alternative way to secure the purchase.
Concluding pre-agreement and prepayment of deposit
If you are sure that the property you have viewed is exactly whose characteristics match your wishes, you can make a pre-agreement with the seller. Pre-agreement is not the same as the purchase agreement.
The purchase agreement is the final document that you are buying the property and you pay the seller the price of the property. The pre-agreement is concluded prior to the purchase agreement and serves as a way of booking a property that you as a buyer are obligated to enter into the purchase agreement with the seller on the agreed date and the seller agrees to sell the property to you.
In the pre-agreement are included; the basic land registry data on the property (cadastral municipality, particle number, number of land registry file in which the property is listed), the real estate description (address, total surface, description of the premises, and in case of an apartment the floor and its number), property price and the date of conclusion of the final contract. The buyer is obligated to pay the deposit to the seller.
As a date of conclusion of purchase agreement, is usually determined within 3 months of the date of conclusion of the pre-agreement. Pre-agreement also defines a deposit or advance payment, usually in the amount of 10% of the sale price of the property that the buyer immediately pays to the seller.
The deposit is also being arranged as a withdrawal. If the buyer ultimately renounces the purchase of the property, the seller has the right to retain the amount of the deposit. Conversely, if the seller decides to waive the sale of the property, he has to pay the buyer a double amount of the deposit. As a rule, the higher the amount of the deposit, the more secured the real estate purchase, because neither side is willing to lose the money that they have invested in the buying process so far.
In order to be assured of the integrity of the whole process and protect your interests, it is recommended that you engage an attorney or a licensed real estate broker who will be willing to compile the purchase agreement in accordance with the legal framework.
Although it is not necessary, it is possible to certify the pre-agreement with a notary public. At the date stipulated by the prepayment when the purchase agreement is concluded, the buyer pays the seller the rest of the purchase price. The purchase contract must be certified by a notary public.
Reservation as an alternative way to secure the purchase
Apart from the conclusion of the pre-agreement and the payment of the deposit, there is also the possibility of booking a property known as an alternative way of securing the purchase of real estate.
The reservation is used when the buyer is not ready to make a pre-agreement and pay a deposit amounting to approximately 10% of the cost of real estate.
It refers to a smaller amount that the buyer leaves to the seller or broker for a shorter period (usually a week) until the buyer pays the amount of the deposit or the entire property price depending on the deal with the seller. The booking usually amounts to about 3% of the cost of real estate, but this is not a rule.
In addition to the booking, a certificate is issued that the seller has received money directly or through a broker (real estate agency) and briefly states the basic features of the sale, such as the purchasing process participants, their personal data, real estate information, real estate prices and the payment deadline. The certificate may also contain additional terms such as obtaining a license until the date of purchase.
It is also important to indicate what will happen to the money that served as a booking deposit if one party withdraws from the conclusion of the final purchase agreement. It is recommended that you pay as much as possible the amount of your reservation if you are sure of buying a property.
Think carefully about how you will approach the purchase of real estate
As already mentioned in the previous articles, it is important to determine, among other, the purchase budget and consider those real estate that you can afford. Maybe you do not have money now, but you're sure you'll have it soon. Such situations include, for example, time deposits or you have already sold something in your possession and are waiting for receiving the rest. You can then define the payment payments through the prepayment and pay the money to the seller. When defining payment installments, define them in the way that best suits you to have enough time to meet these conditions.
The situation you need to avoid is to commit yourself if you are not sure that you will have the money that the seller asks you. It may happen that you will not have the amount you need for real estate purchase up to the agreed deadline and then you will break the deal you made with the seller. In most cases, you will be forced to give up purchasing, which means that you will lose the amount of the deposit or the payment you paid to the seller. Therefore, never when you are not sure that you are able to get the money up to the agreed deadline do not start the purchase process. It is better to wait for the purchase of real estate even though that means you will lose the property you are considering. The consequences of starting a purchase process without the possibility of paying the seller can jeopardize your financial situation. Here, we are returning to the very beginning of the process of buying real estate, i.e. determining a purchase budget that must match your financial capabilities.