If you wish to buy a property in Poland, below you will find few simple steps how to do that in a secure and right manner.
Step I: Finding the right property.
You can find announcements for new and used properties for sale:
At local house fairs – they take place few times a year in huge congress halls:
Step II. Checking the property.
Once you found the dreamed property, doesn`t matter whether it is new or used you will have to check its status. It`s highly recommend to check below points:
Each property (flat, house, land) has its own land register. It is a public, electronic database which everyone can access and check the status of the property. The register number you will acquire from the seller. The land register is divided into four sections.
In Section I you will find details about the property itself (address, status, type etc.).
Section II contains details related to the ownership. It means that you will be able to verify, whether the seller is an owner and has the legal right to sell the property.
In Section III there are special rights belonging to third parties in relation to the property. These could be especially servitudes – right for neighbours to use the internal road, right for electricity company to run the power transmission infrastructure through the ground etc. But what`s important – in Section III could be signed in special servitudes for current property`s tenant. The life-inhabitancy right for some person may be present there so it`s highly recommended that you check that part – unless you want to buy a flat with a tenant.
The most crucial section is Section IV. Mortgage information is posted here. When you buy a property make sure that this section is empty. Otherwise you will buy a property with a debt. When you know from owner that the flat has been bought by them using bank`s money, you (or your bank) will have to pay the money for the property to the owner`s bank up to the outstanding balance of the mortgage loan. If you want to buy a property using a loan, your bank will sign in into this section.
Above points refer especially to properties from secondary market, as newly built houses don`t have land register yet. However you can check, whether your developer took a loan to build the whole building as you will have access to the general ground land register.
Like always – it`s good to buy well-kept items. The same situation refers to real estates. But how to assess the condition of a flat/house? Unless you are an engineer, that`s good to hire a someone who is savvy in properties. There are companies that specialises in such inspections. One of them is www.pewnylokal.pl. The company sends its inspector who looks on the real surface, the condition of walls, water/power/gas facilities etc. Cos of such service is dependent on surface but should be around 300-400 PLN.
Beside above mentioned Land Register that`s good to check, what documents seller wants you to sign. There may be a lot of unfair contract clauses that`s better to avoid. To do that you can simply ask your financial / real estate expert for a help or hire a lawyer which may be quite expensive or use a www.pewnylokal.pl company to check that for you.
Step III. Signing preliminary agreement
Once you have decided on a particular property you should sign a preliminary agreement. That will guarantee you and the seller that second party will fulfil their contractual obligation, i.e. you as a buyer agree to buy the house at a specified price and in specified period. Respectively, the seller agrees to sell you the property under provisions being previously agreed. At this stage you also pay the advance payment. There is a very important thing you should know. There are two types of advance payments. A deposit “Zaliczka” makes it possible that each party can easily withdraw from the preliminary agreement as it is fully refundable. On the other hand “Zadatek” makes you more bound to the agreement as if you wished to cancel it you lose paid money. If seller wish to withdraw from the preliminary agreement he should pay you double the amount of “Zadatek” you have paid. Zadatek is in the common use in such case in Poland.
During the period agreement is valid you have time to arrange all formal issues and get the mortgage loan. If you wish to finance your purchase by a mortgage loan, you should keep in mind that all formalities will take approximately 2 months. Therefore, the preliminary agreement should not oblige you to pay the money earlier.
Preliminary agreement could be signed in two ways. The first is a normal bilateral civil agreement that you sign directly with the seller without any intermediary. You can do that when you buy the property on a secondary market. To protect yourself from unfair contractual provisions, you can always propose your own version of the preliminary agreement. You will find an example here. The second option is to sign the agreement by a notary deed. The notary will supervise the whole process and guarantee you that the whole transaction is being conducted in a secure two both parties way. The price of such notary deed may vary but will be between 1000 to 2000 PLN depending on a property`s price. When you buy the flat from the developer company on the primary market, signing a notary deed is obligatory and regulated by law. Such preliminary agreement is called development agreement “Umowa deweloperska” and is strictly formalised. It contains a lot of information, provisions and appendixes that secure buyers. You will always receive an Information Prospectus from the developer. It is a formal document containing all necessary information about the planned building and the developer company.
Step IV. Financing.
Buying a property with cash is easy. You just have to pay the amount to the seller under conditions agreed in the preliminary agreement. If you wish to take a mortgage loan, you have to apply for a loan in a bank. Not every bank will propose you an offer. Although there is no official discrimination of people without Polish citizenship, banks often say that the decision will be given on a particular, specific conditions, after application has been submitted. In real life, if you have the right to stay in Poland and have the indefinite period work contract, you should not face serious problem and be treated similar to Polish citizen. However, you have to keep in mind that the whole process may be a little bit longer – around 2 months and bank will usually need from you bigger own contribution. Law requires that it has to be minimum 10% of the property`s value, and many banks require that minimum, but you may be asked to contribute 20%.
You will have to provide bank with the following documentation: private id documents, a document conforming your right to stay and work on Poland, the financial documents confirming your income and creditworthiness (like an extract from the credit scoring institution form the country of your origin) and finally the documentation concerning property, which you will acquire from seller/developer.
Once the decision is positive, you will sign the loan agreement with bank. It is recommended to apply for a loan to two – three banks at once. That is because you may expect further requests from bank and it would extend the time which is limited by preliminary agreement. Once you will have few positive decisions, you will agree on the best one.
Step V. Signing the final buy/sell agreement
The final stage is to sign the buy/sell agreement with seller. Regardless of whether the transaction took place on the primary or secondary market, the final agreement has always be signed by a notary deed. If you buy the property on the secondary market, you pay the money after the deed is signed. On the primary market however you pay the money first – after preliminary agreement (deposit of course settles the whole payment). Since on the primary market flats usually are being sold on the initial stages of construction, you will have to pay first and the payments will be in tranches, depending on the advancement of works. Bank that gives mortgage loan always pay the money directly to the seller`s account indicated in the agreement.
Using the financial expert to proceed with the whole transaction seems to be reasonable, because verifying the property and sending applications to a few banks will generate a lot of documentation and is time consuming. At POLASSETS we will do everything for you. Contact us to arrange a free consultation.