What key terms and stages should I know for the property purchase process?

The property purchase process in detail: step by step

1. The financial basis: the starting point in the property purchase process

Many people believe that the property purchase process begins with searching online portals. This is a misconception. The professional property purchase process always starts with a review of your finances. Before you arrange a viewing, you need to know what you can afford.

In the Swiss property purchase process, the golden rule of financing applies:

• Equity: You must contribute at least 20 per cent of the purchase price yourself.
• Affordability: The calculated costs must not exceed one third of your income.

Without a financing certificate from the bank, you will hardly be taken seriously in the further course of the property purchase. Clarify this basis before you actively start the property purchase process.

2. Search and review: due diligence

The market is dry, and good properties are rare. Once you have found a suitable property in the property purchase process, the review (due diligence) begins. In Switzerland, the property purchase process is usually based on the principle of "sold as seen".

Therefore, the following steps are part of a secure property purchase process:

• Inspecting the building fabric (possibly with an expert).
• Checking the land register extract (easements).
• Inspecting condominium owner minutes.

A hasty property purchase process without due diligence can have expensive consequences.

3. Reservation and deposit

Have you found your dream property? Then the next step in the property purchase process is usually the reservation. You sign a reservation agreement and make a deposit.

Important for the property purchase process: from a strictly legal point of view, such a contract is often not binding without notarisation. Nevertheless, it is a common step in the property purchase process to prove your seriousness. Make sure that the deposit in the property purchase process goes to a blocked account held by the notary or estate agent and not directly to the seller.

4. Secure financing

Parallel to the reservation, you must secure the final financing in the property purchase process. The bank will re-evaluate the property. If the value matches the price, you will receive an "irrevocable promise to pay".

This document is the fuel for the rest of the property purchase process. Without a promise to pay, no solicitor will set a date for the notarisation in the property purchase process.

5. The draft purchase agreement

Now it's getting formal. The notary draws up the draft for the property purchase process. The contract regulates the price, payment terms and the condition of the property.

Reviewing this draft is one of the most important phases in the property purchase process.

• Who pays which fees in the property purchase process?
• When do the benefits and risks transfer?

Clarify any open questions before the notary appointment so as not to delay the property purchase process.

6. Public certification (the notary appointment)

This is the heart of the property purchase process. The buyer, seller and notary meet to sign the contract. The notary reads the contract aloud and both parties sign it.

With the notarisation, the property purchase process is contractually sealed ("binding transaction"). You have committed yourself to pay. But beware: at this stage of the property purchase process, you are not yet the owner!

7. Transfer of ownership and land registry entry

The property purchase process distinguishes between obligation and disposal. Only when the entry is made in the land registry ("legal transaction in rem") are you officially the owner.

The notary registers the change of ownership with the land registry office. At the same time, your bank transfers the money. This completes the legal part of the property purchase process.

8. Costs and taxes in the property purchase process

One aspect that is often underestimated in the property purchase process is the additional costs of the purchase. These are incurred in addition to the price.

The financial aspects of the property purchase process include:

• Transfer tax (depending on the canton).
• Notary and land registry fees.
• Mortgage note fees.

Plan for an additional 3 to 5 per cent of the purchase price for the property purchase process. If you forget these costs in the property purchase process, you risk financing gaps.

9. Key handover (benefit and risk)

The emotional conclusion of the property purchase process is the handover. Legally, "benefit and risk" are transferred to you. From now on, you benefit from the value, but also bear the risk. It is essential to draw up a handover report. This completes the operational process of purchasing a property.

Special considerations for newcomers

For foreigners, the property purchase process can be more complex ("Lex Koller").

• EU/EFTA with residence in Switzerland: The property purchase process is identical to that for Swiss citizens.
• Third countries: The process of purchasing property as a main residence is usually exempt from approval, but holiday homes are subject to restrictions.

Find out in good time so as not to block the property purchase process.

Conclusion

The process of buying property in Switzerland is highly formalised but secure. It requires solid financial preparation and patience. From the financing certificate to the notary to the land registry, each step in the property purchase process builds logically on the last.

Never underestimate the additional costs and affordability rules that characterise the process of buying property. If you are well informed and know the rules of the game, the process of buying property will be the start of a secure future.

Let Loft support you in making your path to home ownership efficient and secure.

Glossary

• Property purchase process: All steps from initial interest to land registry entry and key handover.
• Public certification: A mandatory step in the property purchase process, in which the purchase contract is certified by a notary.
• Promissory note: Guarantee from the bank that the purchase price will be paid. Without this document, the property purchase process stops at the notary's office.
• Benefit and risk: The point in the property purchase process (usually handover) at which the risk is transferred to the buyer.
• Land registry entry: The final legal act in the property purchase process, which officially transfers ownership.