Pre-purchase agreement or reservation agreement when buying a house
When buying a property, the buyer often concludes a reservation agreement. Comparis tells you what you need to know (plus a free template for download).
28.12.2023
1. Pre-purchase agreement or reservation agreement when buying a house: what does this mean?
A pre-purchase agreement when buying a house is used to secure the actual purchase agreement. It ensures the sale takes place at the agreed terms.
This contract is often referred to as a reservation agreement. These are particularly useful when certain actions haven’t been finished yet. This includes, for example, obtaining approval from the authorities or committing to a real estate loan.
Reservation agreement without notarization?
As a rule, the reservation agreement already contains all the information of the final purchase agreement. This must be notarized, otherwise it won’t be valid.
Often, the contracting parties waive notarization for cost reasons. If the reservation agreement isn’t notarized, it isn’t binding (Art. 126 OR).
Reservation agreement without a purchase price
An exception are agreements without a purchase price. You don’t have to notarize a reservation agreement which doesn’t mention a purchase price. However, it will not be legally binding in this case.
2. Property reservation agreement: can I withdraw from it?
Has your pre-purchase agreement been notarized? If not, you can withdraw from it at any time.
If the pre-purchase agreement has been notarized, it’s usually not possible to withdraw from it. Withdrawing often comes with high costs.
3. Buying a house with a reservation agreement: down payment
Sellers often require a down payment as part of a reservation agreement. The amount varies depending on the agreement.
The down payment ranges from a few thousand to several tens of thousands of francs, depending on the size of the property. The contracting parties usually agree on a percentage of the purchase price.
Down payment if the seller withdraws
If the seller withdraws, the potential buyer is refunded the entire deposit.
Down payment if the buyer withdraws
If the buyer withdraws, the seller may keep part of the deposit. They can claim the following costs, for example:
notary fees for the draft purchase agreement
renewed costs for placing listings/advertisements
any blueprint changes desired by the buyer
Some estate agents require a flat fee for unfounded expenses and lost business opportunities. The courts have ruled against this practice many times. Sellers and estate agents may charge only direct, provable expenses.
Tips:
note any possible repayment amount in the reservation agreement.
transfer any down payment to a blocked account.
never pay money directly to the seller.
avoid paying in cash.
4. Do I need to hurry when signing?
Don’t be pressured into signing a reservation agreement for real estate. Reputable estate agents or sellers will always give you enough time to check the property and the contracts carefully.
Get help from independent professionals if needed. A lot of the vocabulary is difficult for a lay person to understand.
A Comparis tip on mortgage rates
It's worth taking a closer look not only at the contract, but also at mortgage rates. Compare different providers. You can potentially save thousands of francs over the years. HypoPlus, Comparis’s mortgage partner, can help.
5. Reservation agreement: download a sample
Are you planning to buy or sell property in Switzerland? Download a sample reservation agreement here.
This article was first published on 02.10.2018
