Tips for notarization when buying a house

1. What is notarization of a sales agreement?

If the two parties to a home purchase notarize their sales agreement, the purchase becomes legally valid. By notarizing the contract, you, the buyer, undertake to acquire the property in accordance with the terms of the contract, at the agreed-upon purchase price. In return, the selling party commits to transfer the property to the buyer in accordance with the agreed terms.

2. First step: how do I handle home financing?

You've found your dream home; now what? Get in touch with the seller to arrange a viewing and to discuss the way forward.

Usually, the seller requires a financing commitment from you. As soon as you receive a loan commitment from your bank and agree to the terms, you can make an offer. This lets the seller know you are serious about buying the house.

3. Who draws up the sales agreement?

If your bid is accepted, you have a good chance of a successful purchase. Make sure you familiarize yourself with the boilerplate forms of a home purchase agreement and discuss procedure with an expert if in doubt.

If both contracting parties agree on the essential terms, the seller generally has a certified notary draft a purchase agreement. Ideally, the draft contract should already contain detailed provisions. However, mutual commitments are not binding at this time. You can continue to negotiate the terms of the contract or pull out of the purchase.

4. What is an “irrevocable promise of payment”?

The draft purchase agreement serves as a basis for the loan agreement with your mortgage lender. If you sign these contracts as a buyer, the mortgage lender usually makes the "irrevocable promise of payment" required for the purchase.

With this promise of payment, the contracting parties and the notary office receive a valid confirmation and thus the assurance that the bank payment will actually be made once the agreement is signed and the agreed conditions are met.

5. How does the notarization process work?

Have both parties agreed to a draft contract? Is there an "irrevocable promise of payment" from a mortgage lender? If so, notarization can go ahead at the agreed time.

The buyer, seller and competent notary are present. According to the law, the parties (buyer and seller), the property being purchased and the purchase price must be notarized. The notary reads the contract in its exact wording. If there is uncertainty, buyers and sellers can ask questions at any time.

When is a purchase valid?

Once all questions have been clarified, the buyer, seller and notary sign the contract. There are usually four original copies of the contract: one for you, one for the seller, one for the notary and one for the land registry.

The purchase is now legally valid. You are obliged to pay the purchase price in accordance with the terms of the contract. The seller has the obligation to transfer the property to you in accordance with the terms of the contract.

What is the purpose of the pledge agreement and mortgage certificate?

In order to successfully secure financing, you usually need to sign a pledge agreement with your lender. Like the sales agreement, the pledge agreement must be notarized. As the new landowner, you must enter the "mortgage certificate" in the land register.

The bank receives a confirmation from the Land Registry once the certificate has been registered. The bank then usually issues the loan and the property is paid for.

6. How much does notarization cost?

Notary fees for the authentificationof a house purchase vary from canton to canton and usually make up a small fraction of the purchase price:

• the fees are highest (0.5-0.6%) in the cantons of Geneva, Jura, Vaud, Bern, Neuchâtel, Valais and Ticino.

• The cantons of Aargau, Fribourg, Lucerne, Obwalden, Nidwalden, Basel-Stadt, Basel-Landschaft, Uri, Nidwalden, St. Gallen, Zug and Solothurn are in the middle of the range (0.2-0.4%).

• The cantons of Appenzell Innerrhoden, Appenzell Ausserrhoden, Graubünden, Schaffhausen, Thurgau, Zurich and Schwyz boast the lowest fees (0.1-0.2%).

Source: Price watchdog PUE