My partner and I had an offer accepted this morning.
The estate agent has just asked us if it were possible for us to put a 5-10% deposit down of the apartment amount that will go to the owner. (the owner has not asked yet)
Is this normal?
Thankyou
Hi there,
Depends on canton - but for some cantons, yes.
Make 100% sure to clarify (in writing) what happens if either party withdraws from the deal.
What does your contract say, what will happen with the money if one party changes their mind?
It's fairly normal but also in same respect it's fairly normal it's done via the notary in Vaud certainly.
If it is not a new build then nothing special, needs to go via notary anyway so pay him and have him sort it out with seller, that's why they charge around 1.5% of purchase price.
Your $$ is far safer with him than the seller directly !
Before you tell me it's 4.5-5% of purchase price, the notary collects taxes for commune and canton which in Vaud amount to 3.3% of purchase price, so his cut is the rest, about 1.5%
The sale will be at a gain for the seller, they will be due a certain amount of capital gain taxes. If they fail to pay, the real estate will be used as a security, effectively the buyers will be held liable.
To eliminate that risk it's common practice to deposit the expected tax in an escrow account, to be released when the tax office confirms that all taxes in connection with the transaction have been paid.
When we bought (in SZ, 18 years ago) we signed a Vorverkauf contract and put 10% into an escrow account. We were told that it was common practice in the canton.
This was to reserve the property. With that contract the sellers had to stop showing the house and could not entertain other offers.
Just make sure you write in all the terms and conditions you wish to see, including timing to finalize the sale with an expiration date for the Vorverkauf contract, what happens if either party pulls out of the contract, how interest on that money will be handled (yeah, I know it isn't much now, but still a discussion point.), etc.
Naive first time buyers (in Switzerland) that we were, we (and the sellers) just signed the Vorverkauf contract with the agent and the we transferred the money to the escrow account. We didn't sign the Vorverkauf contract in the presence of the Notary, which I have since been told should have been done. So check to see what is normal/advisable/required in your canton.
Fortunately, all went more or less well, we completed the sale 3 months later.
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Our bank didn't consider that 10% as part of the downpayment, but you should discuss this with your lender.
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Good luck with the purchase!
That is what notary doe in Vaud !!!
Kind of what the notary should be taking care of... Also up to you to decide what happens there and is a discussion. No you should not send 10% willy nilly to a third party in a random bank account, yes you should send 10% to an escrow account all sorted out by a registered notary...
I liked the seller, and they needed the cash for their father to send him in an EPAD - so I allowed the notary to unlock the amount on day one for them to use right away, in exchange they gave me over 6 months to complete on the sale which allowed my eldest to finish her school year.