Reservation fee for house purchase, 60K?

Accomodation, House and Garden
21

This illiquidity thing is something that is really confusing to me.

I was at the buying end, and for our requirements : Kid friendly With small garden Not too old (10 years maximum) (no dachwohnungen fairly sized minimum of 120m2 Not in the city but commutable (workwise) to zurich. Price: not crossing a million mark

(So nothing out of the blue, like a personal sauna pool etc or large house ), we found there were never enough (good apartments or houses) on sale.

Out of those that matched, were either quickly reserved or had so many interested parties, that they clearly refused to have meetings . (They did not even bother to ask our backgrounds)

Also the new apartments with cranes everywhere (and delivery time after a year or so) are also quickly booked and reserved, This was true for regions like dietikon uster schwerzenbach.

Now coming back to the topic, we also paid the reservation amount. We did not end up having any negotiations after that. If you have made up your mind to buy the house, then try negotiating this amount before signing in anything. Also the final cost needs to be negotiated before hand. Even ‘minor’ things like paint etc needs to addressed before signing this.

22
Thanks to everyone (I will work out where the thank button is eventually)

Looks as though we are going to try and place a negotiable price in although still waiting on experts to find out how as we appear to be negotiating with a Mule (Go on, a little bit backwards, you know it makes sense, go on, if you go forward you will fall off the cliff etc.)

Special hat-tip to Andrew for the Maps site. Very cool and interesting. Even if you are not interested in the topic has loads of good stuff

23
This exactly.

Do not negotiate based on requiring the seller to perform repairs. The seller has every incentive to do a poor job at the lowest cost possible, using cowboy contractors who disappear leaving you without any kind of guarantee. Or even to try to pull the wool over your eyes without having done any work at all. Do not underestimate the dishonesty, the games that people play here. Caveat emptor, big time.

Rather, do as Idefix suggests, take the expected repairs off your offer. And stick to your guns. Do not get caught up in the emotion of negotiation, be ready to walk away.

And just to emphasize: the time to negotiate is now, before you enter into any kind of contract. A Vorverkauf is the end result of negotiations, once you sign you are committed, subject to the get out clause and penalties.

So how do you negotiate with a mule? You don't. You make an offer, if the seller will not budge you walk away. Repeat: be prepared to walk away.

Be aware that the cost of getting out of a bad property purchase is very high. So get that lawyer, do your due diligence to the nth degree... And be ready to walk if necessary.

Good luck!

24
One last piece of advice on the payment of the deposit and the wording of the reservation contract. Usually the wording is such that a buyer pays a penalty for cancellation. (this seems to be e case in the OP's situation). But you should add a clause that the seller is also subject to a penalty if he backs out.

Now you are wondering why would a seller back out? There could be a number of reasons. When we sold our last property the buyers worried we would get a better offer after we accepted theirs. The point is as the buyer you want to be protected.

We sold our property privately so I am not sure an agent would accept such a clause in a reservation contract but you should think about the time and possibly money you have spent thus far and ask yourselves if having the deposit returned in full if the deal is cancelled through no fault of your own is enough. A clause to that effect should already be in place.

Also, the repairs (not improvements) to the house can be deducted from your taxes so you are better off having them carried out yourself.

25
Excellent points, Mrs D!

I had a seller back out on me - it was an Erbgemeinschaft where at the last minute one of the heirs decided that he didn't want to sell.

That was fun. The other heirs, disappointed at losing their windfall, tried to insist on going forward with the sale of their portion of the property, so that I'd have ended up with 4/5 of a house, and no right to live in it...

Luckily I had worded the Vorverkauf in such a way that it was clear that I was only agreeing to buy the whole property, not a portion of it. If there are multiple owners (for instance, husband and wife each owning half, which is more common that joint tenancy here) you have to protect yourself from this kind of thing. It happens in divorces too, where one spouse wants the money, one wants to stay in the house, and the buyer gets screwed.

I didn't have a seller's penalty clause; I now know better and next time will do as Mrs D suggests. Too many sellers play games, thinking that because the market is so illiquid buyers will agree to anything out of desperation when committments have already been made based on the Vorverkauf. So put in a penalty clause -and get a lawyer to review the contract!

A first time buyer needs to understand that there are few consumer protections when purchasing property in Switzerland. Given the amounts we are talking about, one needs to be on one's toes at all times.

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That's a really interesting link - thanks!

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I went through a property sale 3 months ago so i put my 2 Cents here:

Question 1. 60K seems very high since, from what I have read, 30K is standard. Is this likely to be negotiable (is it legal?)?

In my opinion it is not ist 5% of the Price...Logical, i paid the same

Q 2. Would signing this affect our statuatory rights to negotiate on terms with the owner of the property? (We are effectively accepting the sum on the form in writing which sounds crazy to me)

Yes it will, you are signing an pre salle Agreement, thats is the Point, that you accept at the Price and condition.

Q 3.Can we adjust the amount of the offer? or rewrite our terms into the reservation agreement and then sign an adjusted copy?

I hope so, although I read that some gave the advise to put a commitment provision to the seller as well, it would be very nice but ist iunlikely they will accept.

Q 4. This seems to be put in place by the agent. Is there any legal block on us contacting the owner directly to agree Ts&Cs?

Normaly the Agent has a power of attorny POA to nagotiate all the T&C, ist part of their contract with the owner, but you can certainly ask if they say we can not nagotiate T&C. Tell them to bring the owner to the table, do the nagotiations and then sign.

In my opinion as well,m if you the owner/agents do not nagotiate if there is no commitment, then the Agreement has to be changed to Show your commitment but "subject to A, B, C" in other words to be a ble to get out of it if you dont get those A, B, C things you Need.

Yes in the case you totaly Change your mind without pre agreed reason, then you loose a part of the Money, but doesnt have to be like that in all cases.

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Only sign something you agree with, everything is negotiable however you may not get the house if someone else will sign as is.

You commitment subject to anything is a waste of time to the seller, he gains nothing by signing & taking the property off the market.