Purchasing Process Print E-mail

There are five main stages to property purchase:

1.    Conducting research and Due Diligence

Researching your chosen market and potential property purchase possibly using some of the frameworks we have outlined in this website e.g STEP-LED  (see individual country profiles)

2.    Making an Offer

Having done the research into the specific area or country and once a property has been chosen, a verbal offer should be made through the agent, who will confirm once this is accepted by the vendor. Once an agreement on price is achieved, sale negotiations will proceed and for most properties a reservation fee may usually be required.

At this stage a lawyer should be appointed by you (if not before) to formalise the agreement. With most properties being off-plan there is often little or no room for negotiation at this stage as the price is normally fixed, dependant upon the current phase of construction.  For a resale property then clearly there is always room for negotiation.

3.    Appointing a Lawyer

It is wise to appoint a lawyer who is fluent in your language, so that you properly understand all the legalities and exactly what is happening. Our agents are well placed to make local recommendations to suggest a lawyer who will carry out all the necessary checks on the property and complete the legal requirements of the sale.

4.    The Purchase

The purchase is a fairly standard procedure, anywhere on the Continent, although each country may have its own idiosyncrasies (see individual country profiles for specifics). The buyer will open an account with a local bank and transfer money in their currency, or Euros, to this account. The buyer's money will then be converted into the local currency of the property purchase, in order to pay funds to the vendor.

5.    Completion

Whether it is an off plan or re-sale property that has been bought, then the completion process is the same. With all the relevant and appropriate monies paid up front the buyer will go, with their lawyer and the vendor, to the notary and all the final exchange paperwork will be signed.  At this stage, any final monies outstanding will be paid.

For off-plan property, typically the procedure is:

Reservation Fee - This is required immediately, to reserve the unit(s) and freeze the price. The required reservation fee depends on the unit chosen, the developer and the development, but typically is around € 3,000.

Deposit - After 30 days, 30% of the cost of the property is due. This acts as a deposit and is sometimes all that is required to be paid until completion of the property. Different developers may require different deposit payment percentages. They may also require interim payments throughout the construction process. It is important to fully understand exactly what payment structure is in place, before committing to a property purchase in the chosen market.

Completion - Upon completion, the remaining 70% is payable (if further staged payments have not been made).

For re-sale property, typically the procedure is:

Reservation Fee - this is paid to the vendor when a property has been chosen to buy - it can be anything from euros 3,000 to euros 6,000.  This sum of money denotes a commitment to buy and also takes the property off the market.

Deposit - the next sum of money will not usually be less than 30% of the full asking price and will tend to be paid within a month (30 days) of the reservation fee being paid.

Completion - these final monies will be paid at the time of signing in the notary's office.  The time frame from reservation to completion, in most cases, can be quite short - sometimes only 6 weeks.  In cases where there is an issue with title deeds, or if the country has a more bureaucratic process, then the process can take longer.

It may save time, effort and money if the finances or mortgage can be arranged and in place, prior to the physical property search and commitment to purchase. This is of particular relevance where the mortgage application process may take longer than in a mature property market. For example with markets like Poland or Montenegro, with less well-established secured- lending facilities than other Western European countries, there are fewer mortgage products available, fewer lenders offer loans to foreign nationals and the application process may take slightly longer.

Please remember that:

  • for new and re-sale property purchases, all upfront payments will be conceded should the buyer decide to pull out of the sale prior to completion

  • in the case of an off-plan purchase it is important to ensure there is a relevant clause in the purchase contract stating that the developer will allow the buyer to sell on, prior to completion, if that is the intention (or "flip" the property as it is sometimes known). Any breach in a sales contract may result in loss of monies paid to date.