Buying a single-family house
A buyer must always inspect the house, outbuildings, the plot of land and the borders carefully before concluding a transaction. Defects which could have been detected in a standard inspection may not be used as grounds to claim compensation afterwards. In real estate transactions documents should be inspected carefully, as they include essential information about the property.
If you are interested in a house, request a private viewing to do a comprehensive inspection. Knock on walls and washroom tiles, peek behind boxes and items in the garage, use a flashlight to inspect base flooring and roofing, climb up to the roof, go down to the basement and assess the air quality by sniffing around.
It is also a good idea to find out in the early stages what the arrangements are regarding water supply and waste water management.
Condition inspections are not mandatory. First-time house buyers who don’t have friends or family with the relevant knowledge and expertise would do well to commission a professional condition inspection if the seller has not done so yet.
A standard condition inspection may not reveal concealed defects, but it serves as a useful way to get information regarding basic aspects of the property, potential risks as well as future renovation needs.
Ask the real estate agent and the seller about the repair and maintenance history of the house. Sometimes this information is logged in writing, for instance in a notebook.
Information and documentation
In real estate transactions essential documentation to inspect includes the certificate of registered title, the certificate of mortgages and encumbrances as well as the extract from the cadastre along with relevant maps.
If a real estate agent has been hired to sell the house, he must present the necessary documentation to the buyer and include certain statutory information in the brochure he prepares for the property.
- the type of house, i.e. is it a single-family house or a holiday home
- whether he is selling real estate, a share or parcel of real estate or a building on rented land
- the zoning status of the area, building prohibitions and the contact information for zoning authorities
- if the house is fairly new or additional buildings have been constructed on old property, request relevant building permits,
- blueprints and building inspection documents
- the municipality and district or village in which the property is located, its property identifier and street address
- the area of the plot of land
- building rights
- buildings and other structures such as playhouses, storage buildings or gazebos belonging to the property restrictions on the use or assignment of the plot of land
restrictions on the use or assignment of the plot of land
- in case of rented land, the lessor, the lease agreement, the remaining time on the lease, the amount of rent and any restrictions on assignment of the right of lease
- lien, fees payable by the buyer and other encumbrances and easements
- the exact or estimated year the building was commissioned for use
- primary construction material, roofing type, surfacing material used for the roof and the heating, water and drainage system
- number of rooms and area, classified into living space and other space
- an energy certificate is required for all buildings to which the requirements of building code are applied. The owner of the building (or in some cases, the possessor of the building) is responsible for obtaining the energy certificate. Read more about the energy certificate.
- building (or in some cases, the possessor of the building) is responsible for obtaining the energy certificate.
- average heating costs
- a map of the boundaries of the plot of land
- a floor plan of the building
Marketing information provided concerning the property also has a key role.
If the brochure specifies the condition of the house as ”Good”, the buyer is entitled to expect that the house is in good condition considering its age.
”Fair” and ”Passable” indicate that there is at least a need to repair some surfaces or that the building is aging.
”Poor” and ”Only fit for demolition” naturally indicate that one should not expect much.
Read more about the real estate agent’s services in real estate brokerage
Bids in real estate transactions should be made in writing
In real estate transactions for houses bids are not binding in the same way as they are in transactions related to shares in housing companies. Withdrawing a bid does not result in having to pay a standardised contractual penalty or losing the down payment in its entirety.
In real estate transactions, the parties are only bound by preliminary agreements of sale in the form specified in the Code of Real Estate and witnessed by a notary public. However, the preliminary agreement method is rarely used.
If either party withdraws after acceptance of a bid or other preliminary form of agreement, the party withdrawing from the transaction must compensate the other party for reasonable costs incurred by advertising, visiting the real estate and other activities necessary for the conclusion of the sale.
If the buyer has made a down payment, the seller must refund him for the amount in excess of said costs.
The deed of sale is prepared in writing
The deed of sale for property transactions must be prepared in writing. According to the Code of Real Estate, the deed of sale must specify at least
- the purpose for which the real estate is transferred
- information to identify the real estate
- the seller’s and buyer’s personal information
- the sales price and other relevant payment
The deed of sale should also include various other information, e.g. information concerning the transfer of right of ownership and right of possession as well as the liability for risk and the transfer of electricity and HVAC supply agreements.
The conclusion of the transaction must be witnessed by a notary public who witnesses the transaction in the presence of all signatories or their representatives.
Preparing an appropriate deed of sale is one of the obligations of the real estate agent.
If an agent is not used, the service of preparing the deed of sale may be purchased from a real estate agency, a law firm or a bank.
If the seller is selling the house on his own and you are not completely confident that the deed of sale will be prepared correctly, suggest to the seller that the service be purchased from a reliable professional.
- ”The buyers have carefully inspected the object of sale and accept it in the condition it was in at the last viewing” and
- ”The seller affirms that he has disclosed all information he is aware of and changes to such information prior to concluding the transaction, if any, which may have affected the buyer’s decision to conclude the sale”.
These types of standardized clauses are significant, for instance to clarify the fact that the house is old and that the basic information pertaining to the real estate has been disclosed. However, they alone do not free the seller from his liability regarding defective information or quality detected after concluding the sale.
Registration of title is filed with the National Land Survey of Finland
The buyer of real estate must file for registration of title within six months of concluding the transaction. Registration of title consists of recording the right of title to the real estate in the land register and the register of mortgages. Registration of title also involves confirmation of the validity of the transfer of title.
Registration of title must be filed with the District Survey Offices. Registration of title may be filed by the buyer himself or the service may be commissioned from a real estate agent or bank. The filing documents must include the original deed of sale along with its enclosures. Transfer tax must be paid before filing for registration of title.