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Old 19.01.2021, 12:52
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Re: What are the best practices with Notary contract when buying property?

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IHowever, I think 10k is rather expensive, are you sure the notary does not act as lawyer?

Also it is rather unusual that you would lose the whole deposit.

I just received the the scope of work email from the notary asking for all the documents from the buyer and seller along with the bank account where the CHF 10k should be paid. It clearly states that they don't start working on the contract until the 10k is paid and all the documents received.

The 10k "will be deducted from the final provision to be paid for purchase costs and transfer tax" according to the email.

The email also states that "In addition, I draw their attention to the fact that the implementation of the file will entail costs in the event of failure."
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  #22  
Old 19.01.2021, 13:27
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Re: What are the best practices with Notary contract when buying property?

In Canton SO we did a few months ago like this

Us and agent agree on price and more or less the date of transfer
In SO we had to go to the 'notar office' which changes based on where the property is located.

I googled online, all this thing were confirmed by canton website, plus there were example of what one can end paying for the notar.

I asked the agent to find one who spoke italians. None was available. We agreed on having a translator, I picked up a friend to translate from german to english.

There were two options:
2 meeting in person, 1 for the draft, 1 for the final signature
draft via email, 1 meeting for final signature

We opted to go there just once.
So we got the draft.

The draft was maybe 10 page, quite understandable a part from some catastal thing.
We made comments and questioned directly the office of the notar, who was super friendly and collaborative.

Notar office informed both parties of each comment were presented, both parts agreed.
We set up the meeting date for signature.

In the contract worth to mention, were clearly defined who pays what. What is guaranteed and what not. Financial situation of the seller who was all good without debts and risks to have to pay something for them.

We went there, 15 minutes, signature and sayonara.
1 hour later clerk from notar office sent all the paperwork notarized
3 days later we got the bill of 2000 CHF, to be split with Agent.
I send the bill to agent, he pays the half of it back to us
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  #23  
Old 19.01.2021, 13:37
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Re: What are the best practices with Notary contract when buying property?

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I just received the the scope of work email from the notary asking for all the documents from the buyer and seller along with the bank account where the CHF 10k should be paid. It clearly states that they don't start working on the contract until the 10k is paid and all the documents received.

The 10k "will be deducted from the final provision to be paid for purchase costs and transfer tax" according to the email.

The email also states that "In addition, I draw their attention to the fact that the implementation of the file will entail costs in the event of failure."
I do not know in what price range the property is, however calculate with 5% of the purchase price for the notary etc (this includes everything).

Waiting for all documents is normal

Cost for whom in case the seller causes the failure?
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Old 19.01.2021, 18:08
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Re: What are the best practices with Notary contract when buying property?

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I do not know in what price range the property is, however calculate with 5% of the purchase price for the notary etc (this includes everything).

Waiting for all documents is normal

Cost for whom in case the seller causes the failure?
The10k does not cover the full 5%, for sure.

I am hiring the notary, so if the sale does not close, I can probably say goodby to my 10k.
According to the agent, some of the Notaries (not usual practice, but he has seen it before) asking for some skin in the game from the buyer to make sure we don't walk away.
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Old 19.01.2021, 18:30
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Re: What are the best practices with Notary contract when buying property?

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It must have been built in the late 1800, but it "looks" like it has been reasonably well maintained. I am sure there will be some issues, and surprises, but hopefully nothing major. We know that it needs some attention/love and renovation, for example bathroom, kitchen, painting etc.
But we were not planning to do any professional inspection, sounds like this is ignorance in my part?

The bank approved the financing, but nevertheless I think too that we must make the contract contingent on securing the financing.
As own buyer's experience with 1780, 1900 & 1910 properties, I would strongly recommend to get an expert opinion on:
1. Termites or other wood-eater infestations / soundness of structural support and health status of supporting beams (as most likely is the case for a 1800's building)
2. Lead-containing piping or lead-containing painting presence
3. Amiante presence / insulation

prior to entering any contract discussion. Might look good on the surface, but if you plan to live on it, scratch underneath the surface. I had a couple of bad surprises...
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  #26  
Old 22.02.2021, 17:07
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Re: What are the best practices with Notary contract when buying property?

Just a quick update and lessons learned for the EF community.

We managed to buy the property in a “vente directe” as opposed to the originally planned “vente terme”.



terme - essentially means that the buyer promises to buy, and the seller promises to sell. And there are two meetings at the notary. At the first signature meeting, the buyer transfers 10% to the notary to show that she/he is serious. This amount is at risk if the buyer can’t close for some reason. Theoretically, the seller would also “owe” the buyer 10% if they change their mind. But this might be difficult to collect, and I don’t have a clear understanding on how this would work.
Then during the first signature at the notary, the seller and the buyer agree on the final signature date when the balance 90% purchase price is transferred.
The “directe” means that there is no 10% down payment involved. So, there is only one meeting at the notary, and 100% of the purchase price has to be in the notary’s account for the day of the meeting/signature.
The “directe” sale is somewhat less expensive than the “ terme”, from the notary fees point of view, mainly because there is only one document to prepare and sign and one meeting. The notary never disclosed how much less, but I’m estimating a saving of around CHF 1.5k, based on reading between the lines.

The direct method has some advantages and disadvantages.
Advantages:
- Only one meeting and signature at the notary
- Aprox. CHF 1.5k less expensive
- No 10% down payment at risk if the financing can’t be secured * Because of this, it is probably easier also to pull out, but not sure about the legal implications
Disadvantage:
- The seller can change his/her mind and walk away before the contract is signed

Our contract was standard without any special clauses. The notary was discouraging me to propose the seller any clauses.

The overall process was relatively simple once all the pieces were aligned.
One big risk (unknown) for us was the payment from the 2nd pillar pension fund. Apparently, this can take months to be paid from the date of the request. We were ignorant about this since no one warned us about it. But our pension fund was quick, and they transferred the funds in a few days. But apparently there are pension funds which might take up to 6 months to transfer the funds. So, if 2nd pillar funds are involved, the transfer delay needs to be accounted for when setting up the meeting dates with the notary and agreeing with the seller.

Last edited by 3Wishes; 24.02.2021 at 15:07. Reason: cleaned up all the unnecessary font tags that cluttered the post
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