Advice on buying Estonia Property

					Buying property in Estonia is a relatively straightforward and safe
procedure.


The wheels of the bureaucratic machine move fairly efficiently, meaning
that you could have title transferred in as little as four weeks.
Foreigners were known to have paid higher prices in the early 1990s, but
the market has matured. Foreigners are developing many properties in
Estonia now. This combined with the closing gap between foreign and local
salaries mean that far fewer people, foreign or local, are being taken
advantage of.    Most agents meet certain standards within real estate
protocol and foreigners getting fleeced is not something to be over duly
concerned about. How much can I borrow? Estonian banks and financial
institutions are happy to give finance to foreigners, though the rates
and conditions will not be as competitive as those given to Estonian
residents. Interest rates, however, are very competitive, and can be as
low as 3 of the property value for a first property, and 50 off new
properties in Estonia around 5-6 lower than the asking price. And because
Estonia is experiencing a building boom, needing up to 3000 new housing
units a year, haggling might be a luxury you can't afford.    Buying
without an agent? Not recommended! Buying without a property agent in a
country you are unfamiliar with, even for the most experienced property
investor, is looking for trouble.    Additional Charges The Notary is
responsible for overseeing the transfer of ownership of property in
Estonia. Notaries play a necessary role in the closing process and are
paid separately. In Estonia, their fees are fixed by the state ranging
from 0.4 to 1.0.    Most new builds sell off the plans and are sold
complete with interior decoration. Demand in Estonia for 2- 3-roomed
apartments has grown, particularly in the suburbs. This is in contrast to
its Baltic counterparts, Riga and Vilnius, where demand is largely for 1
-2 roomed apartments. The result is a 5 more for any type of property for
sale in Tallinn's old town. Demand for such properties has increased
significantly over the past year in both the buyer and rental markets.
Investor's interest in new build apartments around the city centre has
led to less demand for houses in Estonia. While demand has fallen, prices
have remained stable, though selling times are longer. It is possible to
find bargain properties in Estonia's rural areas at extremely low prices
and the past year has seen far more of these properties come on the
market than in previous years.    The Buying Process The settlement
process in Estonia is fairly efficient, typically taking between 30 to 60
days, although it can be sooner depending on how quickly an appointment
can be arranged with the Notary.    The Role of the Notary The notary will
oversee the transfer of ownership and ensure that it is in accordance
with Estonian law. If it is not, recommendations for change will be made
since the notary is financially responsible for potential mistakes or
violations of the law. Once approved by the Notary, the documents are
then signed in the Notary's office. Bear in mind that the notary's role
is neutral. You will not be advised on any aspects of title, searches or
burdens that they property may carry. The Notary will can also handle
payments for the property through their account if required. Each party
will be issued copies of the contract on signing at the notary office.
Notary Fees The most equitable agreement for paying notary fees is to
divide the cost equally between the buyer and the seller. Be sure to
negotiate this before the meeting. There will also be a small amount of
tax [state duty] to be paid by the buyer. This amounts to approximately
0.4.   The Contract or Pre-Purchase ProtocolThe "pre-purchase protocol"
is the agreement that commits the buyer and the seller to the property
sale. It usually requires the payment of a deposit, set at around 10%.
The pre-purchase protocol is immediately binding and under Estonian law
there is no opt-out period. Once the contract has been signed, you are
legally obliged to follow through on the terms of the agreement. Estonian
property purchase contracts are generally "firm sale only". In contrast
to other countries where you may negotiate a property purchase
conditional on getting bank finance or selling another property, it would
be very rare for an Estonian property seller to accept conditions on a
property sale. Always beware of contracts that have been translated from
Estonian to English. A bad translation may compromise the terms of the
contract. You are legally obliged to have an accredited translator with
you at the notary's office to take you through the contract and to ensure
that you fully understand the terms of agreement. To ensure that the pre-
purchase protocol is legally valid, it must be signed by an Estonian
Notary. Many agents however do not insist on this procedure since it
incurs extras costs. However, without a formal signing at the notary's
office, the terms and conditions of the contract do not have any legal
sway. Deadlines may extend longer than they should and other problems
may arise. As a final note of caution, make sure that the director of the
agency you are working with signs the contract. In order for a contract
to be valid under Estonian law, the director of the company and not the
agents working for the company must sign the documents.   Don't expect to
be handed the deeds of the property once the purchase has been completed.
In Estonia, there are no property deeds. A notorized application is made
to the Land Register to transfer the ownership of the property to the
buyer in the land register book. This cannot happen until the state fee
is paid. After this process, the title is legally valid.   Public notice
of the transfer must be published in the Official State Gazette, though
this does not affect the title, which is secured after being noted in the
land register book.   These guidelines are meant for guidance only and
describe a straightforward purchase scenarios. However this information
is not meant to replace proper legal advice, which we always insist you
take. Tony Riley is the owner of Globespan European property portal.
Please visit our estate agents directory and    this Estonia buyer's
guide


Related Articles -
Estonia property, Estonian, Estonia, Globespan, property, mortgages,
resale, notary, fees, sale, real estate, banks, interest rates,
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