Everything you need to know about the contract for the sale of real estate

Both buying and selling real estate are situations that require extreme caution, because any wrong step could lead to a series of legal proceedings and financial losses. That is why, when buying and selling real estate, it is always advisable to have an experienced real estate lawyer present who will accompany the entire process and protect your rights and interests.

In most cases, the purchase and sale of real estate is realized by concluding a sales contract, which represents the agreement of the will of both contracting parties on all essential elements of the contract. However, in some cases, for additional protection, it is recommended to conclude a pre-contract. In the continuation of the article real estate lawyer Novi Sad explains everything you need to know about the pre-contract and the main contract when buying and selling real estate.

Checking the legal status of real estate

In the introduction, we mentioned that errors during real estate purchases they can cost you dearly – if you don’t check the legal status of the real estate (a lawyer who draws up the pre-contract and contract can do it for you).

During the check, it is determined whether there is a third-party claim against the real estate, whether the real estate is mortgaged or the subject of a court dispute, and whether another person has claims against the real estate (spouse of the seller or possibly a person with whom he also entered into a contract for the sale of real estate).

Only when the aforementioned checks have been carried out and it has been determined that the property is “clean” can you move on to an agreement on the price, method of payment, deadline for payment, deadline for moving out, and the like. All these items will be contained in the pre-contract and the contract for the purchase and sale of real estate.

What is a pre-contract and when is it concluded?

When the seller and the buyer agree on the price and all other issues related to the sale of real estate, the main contract or, in some cases, the preliminary contract may be signed.

The pre-contract precedes the main contract. It does not obligate the seller to transfer ownership of the real estate to the buyer, nor the buyer to pay the agreed sum of money to the seller, but it protects both parties from possible withdrawal from the main contract. The pre-contract determines the time period in which the main contract will be concluded, and this document obliges the buyer and the seller to conclude a contract and carry out the purchase and sale of real estate.

The pre-contract is concluded in complex situations, mainly when not all conditions have been met in order to implement the main contract – for example, if the customer is waiting for loan approval and he needs time to collect documentation and the like.

Agreement on the purchase and sale of real estate

After the stipulated time has passed, if the pre-contract has been signed, the main contract for the purchase and sale of real estate drawn up by a lawyer, in accordance with the wishes of the contracting parties, is also signed.

The elements of the contract of sale are the subject of the contract (real estate), the price, clausula intabulandi, i.e. the registration permit and transfer of possession of the real estate. The contract may also contain additional items that represent the will of the contracting parties and may contain elements such as protection against eviction, agreement of special terms, costs of contract certification and the like.

A contract for the purchase and sale of real estate has legal effect only when it is made in writing, signed by the contracting parties and certified by a notary public. Notarization is done in the office of the notary public responsible for the area where the real estate is located, and the parties to the contract go to sign with the real law lawyer who drew up the contract. A contract that is made in oral form or lacks signatures or notarization is considered null and void.

Interesting fact: the buyer does not become the owner of the property when he signs the contract, nor when he pays the agreed price of the property, contrary to popular opinion. Only when the buyer registers the real estate in the Real Estate Cadastre under his name, is he considered its owner.

When is the buyer exempt from paying tax on the purchased real estate?

Tax on the purchase of real estate or tax on the transfer of absolute rights all persons who buy real estate pay, but when buying a first apartment there are extenuating circumstances.

A person who is of legal age and a citizen of the Republic of Serbia, when purchasing the first real estate, has the right to a refund of VAT for the area of ​​the apartment up to 40 square meters, plus 15 square meters for each member of the household who does not own real estate. If the buyer buys a larger apartment, he will pay VAT only for the square footage difference (for example, if a person lives alone and buys the first apartment of 50 square meters, he will pay VAT only for 10 square meters, while for 40 square meters the amount will be refunded).

Is a lawyer needed in the process of buying and selling real estate?

An experienced real estate attorney can make the real estate buying and selling process much easier and allow you to enjoy this joyous day instead of stressing and worrying.

The lawyer will check the status of the real estate for you (he will know exactly where to go and how to check), draw up a valid contract for you and follow the entire process – from the verbal agreement to the registration of the real estate.

You will ensure that the purchase and sale takes place in the best order and that it is realized efficiently and quickly, and you will act preventively against subsequent complications, which could arise if you enter the process of buying and selling real estate unprepared and insufficiently informed.

Source: Portal o ekonomiji by www.economy.rs.

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