Friday, December 15, 2006

Purchasing Real Estate in Sweden - Compulsory content of the purchase contract

The purchase contract has to be in writing and

1) identify the real estate,

2) set out the sales price,

3) contain a clear statement of the seller’s intention to sell and

4) be signed by both parties.

A contract that does not meet the formal requirements 1—4 above is void.

If the seller is married, it will most likely be necessary to obtain the spouse’s consent to the sale.

The seller’s, and – if applicable – the spouse’s signatures should be confirmed by two witnesses.

As mentioned in an earlier post, the documentation ordinarily consists of a purchase contract setting out all the provisions of the transaction and a Bill of Purchase confirming the transfer of title and the payment of the full purchase price. Both these documents must fulfil the above requirements with the exception of the signature of the seller’s spouse. Such consent need only be made in the document used for registration purposes.

Finally, it should be noted that there is no Swedish requirement to involve a notary public in connection with a real estate purchase contract. Anyone can draft such a contract and it is normally done by the real estate agent and not a lawyer.

Wednesday, December 13, 2006

Purchasing Real Estate in Sweden – Normal Content of a Purchase Contract

A normal purchase contract for a private home in Sweden would contain i.a. the following headings:

1. Seller

2. Buyer

3. Real Estate

4. Transfer Date

5. Purchase Price

6. Payment Conditions

7. Debts secured in the real estate

8. Transfer of Risk

9. Insurances

10. Division of real estate income and costs

11. Costs of registration etc.

12. Present condition of real estate

13. Warranties

14. Pre-emption rights etc.

15. Issue of Purchase Deed etc

16. Attachments

17. Date

18. Signatures

In several coming blog posts I will discuss these items in some detail. However, I have in earlier posts mentioned the Seller and the Buyer .

Thursday, December 07, 2006

Purchasing Real Estate in Sweden - The normal way a real estate (private home) transaction is carried out in Sweden

  • The seller finds a suitable real estate agent, who advertises the real estate in newspapers and on the internet.
  • The potential buyer gets in touch with the real estate agent, who shows the house to to the buyer and presents the pertinent facts about the house and its running costs.
  • Following negotiations, the parties agrees orally on the transaction. Note that this is not binding on the parties as all agreements for sale of real estate in Sweden must be in written form.
  • The buyer arranges for an inspection of the house. Such an inspection may also be made after the purchase contract has been sign, but then with a possibility for the buyer to cancel the contract if major defects are detected.
  • The parties sign the purchase contract prepared by the real estate agent.
  • At the same time, the buyer makes a down-payment of about ten per cent of the purchase price.
  • On the take-over date set out in the purchase contract, the parties meet together with the real estate agent at the buyer’s bank.
  • At this closing, the bill of purchase will be signed by the parties and the payment of the purchase price will be effected.
  • The seller hands over the keys to the building together with any available maps and other documentation related to the real estate to the buyer.