Forward sale
A forward sale in Switzerland is a model of real estate transaction that cannot be carried out directly, there- fore immediate and must be carried out at a later date. This form of acquisition requires the payment of a deposit (usually 10% of the purchase price) when signing the notarial deed. The balance is paid at the time of delivery of the property, i.e. upon transfer of ownership. The buyer is not the owner of the property when signing the forward sale, he will only become so during the final sale. The signing of the forward sale at the notary and the payment commit the buyer to buy the property and the seller to sell it to him. An entry in the land register with the surname and first name of the purchaser is made when the forward sale is signed. This registration is a right of emption intended to block the seller who can then no longer sell to a third party. With this protection tool, the 10% deposit is immediately paid to the seller.
The steps to follow to conclude a forward sale of real estate are as follows:
1. Establishment of the terms of the forward sale:
after having agreed on the price of the sale, the seller and the buyer must agree on the date of the transfer of ownership and any other conditions of the sale.
2. Drafting of a forward sale deed by the notary:
it is mandatory to draw up a contract in the authentic form describing the terms of the forward sale, including the obligations of both parties.
3. Payment of the deposit:
the buyer must generally pay a deposit of 10% to commit to buying the proper- ty on the agreed date. This deposit must be paid to the notary on the day of signing. Without the payment of the deposit, the signature cannot take place. The notary will release the deposit in favor of the seller.
4. Signature of the forward sale at the notary:
all parties must be present to sign the forward sale deed. If an individual named in the deed cannot be present, a power of attorney must be made.
5. Registration of the forward sale contract:
the forward sale contract, more specifically the resulting right of purchase, must be registered with the land register to be valid. The notary takes care of this imme- diately after signing.
6. Final sale:
on the agreed date, the buyer must pay the balance of the sale price and become the owner of the property. This is when the keys are passed on by the seller to the new owner.
There are several advantages for buyers and sellers of signing a forward sale of real estate.
For buyers:
Investment security:
by concluding a forward sale, the buyer can be assured that the property will be avai- lable on the agreed date and that the price will be fixed in advance, which can be reassuring in an unstable real estate market.
Possibility of fixed-term planning:
a forward sale can allow the buyer to plan by knowing in advance when he will become the owner of the property.
A forward sale is a contract that does not allow the seller to go back. Indeed after signing the deed of sale, if the seller decides to retract, the buyer can oblige the seller to sell at the agreed price.
For sellers:
Long-term financial security:
By concluding a forward sale, the seller can be assured of a fixed selling price in advance, which can be reassuring in an unstable real estate market.
Possibility of long-term planning:
a forward sale can allow the seller to plan for a known term by knowing in advance when he will sell the property.
A forward sale is a contract that does not allow the buyer to go back. Indeed, after signing the deed of sale, if the buyer decides to retract, he loses the entire deposit paid to the seller.
Conclusion :
Forward selling is an ideal sales model when a direct sale cannot be achieved. It allows the buyer to be assured that the property is acquired and the seller that the property is sold. It also gives the parties time to prepare for the move, suitable financing and the search for new accommodation or the release of a lease.
