Step-by-step overview of the real estate buying process in Poland
Kasha, Monday, 11 November 2013
This article is part of a series of 6 articles about buying property in Poland. The other articles in the series cover the following topics:
The first step in buying property is to establish one’s price range. If one is planning on partially financing the purchase through a bank loan, this is a good time to compare different loan offers and to approach your chosen banks to discuss your eligibility and creditworthiness. The bank will look at your earnings, existing liabilities and the planned down payment and will inform you about the approximate maximum financing amount they could provide you with.
The next step is to find the property you’d like to purchase. You can either work with a real estate agent, which will increase your transaction price by up to 3.5% of the property price or you can look on your own (e.g. online or through walking around the neighborhoods of interest and calling the number on the “for sale” banners).
Once you have found the desired property, you’ll need to look the property up in the Mortgage and Land registry to find out its legal status, current ownership and whether it is currently mortgaged. Afterwards, you may negotiate the sales price and other terms with the current owner.
Unless you are paying for the property in cash, you will need to secure a bank loan to pay for the purchase. Once you agree on the sales terms and before you secure your financing, the parties can sign a preliminary sales agreement. The agreement should preferably be signed at the notary’s, which will slightly increase the transaction costs but will also provide security and enforceability for the contract. The preliminary agreement typically stipulates that the buyer pay the seller some earnest money. Customarily, if the sale falls through because of the buyer, the seller will keep the earnest money and if the transaction falls through because of the seller, the buyer will be entitled to double the amount of the earnest money paid. The preliminary agreement will also stipulate the time frame within which the final sale will take place (usually a two month time frame, which accounts for the time needed to secure loan financing), the price and all other conditions negotiated by the parties.
The next step is to apply for the loan at our bank(s) of choice by submitting the relevant loan documentation and the preliminary sales agreement. The bank will have the property professionally appraised and will take approximately 5-6 weeks to return a loan decision. If the loan is approved, the debtor has one month to sign the loan agreement. It is advisable to request a copy of the loan agreement before the signing takes place in order to calmly read through all its provisions.
Once the loan agreement is signed, one may arrange for signing the final sales agreement at the notary’s. The notary customarily prepares the sales contract based on the information provided by the two parties. The typical notarized sales agreement will include the date and place of the sale; the contact information of the notary handling the sale, the names, addresses and the names of the parents of the buyer and the seller (alternatively the names of their legal representatives if they themselves are not present) as well as information on all other relevant persons present. The act will include the statement of the sale with all the agreed upon sales terms clearly specified.
The documents necessary for preparing the notary act of sale will include:
The next step is to reflect the changes in the property ownership and mortgage information in the Mortgage and Land Registry, which can be done by the notary after the contract signing. The Mortgage and Land Registry is a public registry, which contains the legal status of all real estate in Poland and which clearly indicates information regarding to the size, location, ownership and mortgages on the property.
Once the buyer or the notary apply for the changes to the Mortgage and Land Registry, the buyer presents the bank with a copy of the notarized sale act as well as a proof of this application. The bank will then release the loan funds directly to the seller. (Please note that the change in the Mortgage and Land Registry may take up to two months and that once it has been concluded the buyer must notify the bank).
Once the bank has wired the money to the seller, the property can be handed over to the buyer. The sides meet at the location of the property and sign a handover protocol, which lists the meter readings and specifies any comments in regards to the state of the apartment. Consequently, the seller releases the keys to the new owner.
This article is part of a series of 6 articles about buying property in Poland. The other articles in the series cover the following topics:
The first step in buying property is to establish one’s price range. If one is planning on partially financing the purchase through a bank loan, this is a good time to compare different loan offers and to approach your chosen banks to discuss your eligibility and creditworthiness. The bank will look at your earnings, existing liabilities and the planned down payment and will inform you about the approximate maximum financing amount they could provide you with.
The next step is to find the property you’d like to purchase. You can either work with a real estate agent, which will increase your transaction price by up to 3.5% of the property price or you can look on your own (e.g. online or through walking around the neighborhoods of interest and calling the number on the “for sale” banners).
Once you have found the desired property, you’ll need to look the property up in the Mortgage and Land registry to find out its legal status, current ownership and whether it is currently mortgaged. Afterwards, you may negotiate the sales price and other terms with the current owner.
Unless you are paying for the property in cash, you will need to secure a bank loan to pay for the purchase. Once you agree on the sales terms and before you secure your financing, the parties can sign a preliminary sales agreement. The agreement should preferably be signed at the notary’s, which will slightly increase the transaction costs but will also provide security and enforceability for the contract. The preliminary agreement typically stipulates that the buyer pay the seller some earnest money. Customarily, if the sale falls through because of the buyer, the seller will keep the earnest money and if the transaction falls through because of the seller, the buyer will be entitled to double the amount of the earnest money paid. The preliminary agreement will also stipulate the time frame within which the final sale will take place (usually a two month time frame, which accounts for the time needed to secure loan financing), the price and all other conditions negotiated by the parties.
The next step is to apply for the loan at our bank(s) of choice by submitting the relevant loan documentation and the preliminary sales agreement. The bank will have the property professionally appraised and will take approximately 5-6 weeks to return a loan decision. If the loan is approved, the debtor has one month to sign the loan agreement. It is advisable to request a copy of the loan agreement before the signing takes place in order to calmly read through all its provisions.
Once the loan agreement is signed, one may arrange for signing the final sales agreement at the notary’s. The notary customarily prepares the sales contract based on the information provided by the two parties. The typical notarized sales agreement will include the date and place of the sale; the contact information of the notary handling the sale, the names, addresses and the names of the parents of the buyer and the seller (alternatively the names of their legal representatives if they themselves are not present) as well as information on all other relevant persons present. The act will include the statement of the sale with all the agreed upon sales terms clearly specified.
The documents necessary for preparing the notary act of sale will include:
- The IDs, e.g. national identity card or passport;
- The notary act proving the seller’s ownership of the property;
- A Mortgage and Land Registry excerpt that shows the legal status of the property;
- Bank letter attesting the award of the loan for the purchase of this property;
- A certificate from the seller attesting that there are no arrears on the utility and tax payments for the property.
The next step is to reflect the changes in the property ownership and mortgage information in the Mortgage and Land Registry, which can be done by the notary after the contract signing. The Mortgage and Land Registry is a public registry, which contains the legal status of all real estate in Poland and which clearly indicates information regarding to the size, location, ownership and mortgages on the property.
Once the buyer or the notary apply for the changes to the Mortgage and Land Registry, the buyer presents the bank with a copy of the notarized sale act as well as a proof of this application. The bank will then release the loan funds directly to the seller. (Please note that the change in the Mortgage and Land Registry may take up to two months and that once it has been concluded the buyer must notify the bank).
Once the bank has wired the money to the seller, the property can be handed over to the buyer. The sides meet at the location of the property and sign a handover protocol, which lists the meter readings and specifies any comments in regards to the state of the apartment. Consequently, the seller releases the keys to the new owner.
All types of property for sale in Poland by private sellers and estate agents. Find your villa, farmhouse or apartment in the Mazowieckie, Malopolskie, Pomorskie or Dolnoslaskie region.
The Polish real estate market experienced an increase last year. 163,000 new houses were completed, and the country issued 81,000 permits for new homes
currently under construction. The building sector, the European Mortgage Federation concludes, is the best one in ten years.