Why You Need a Notary for Buying Property in Switzerland

Depending on the canton, there are differences when dealing with notaries in Switzerland. However, one thing is for sure, and that is that you need a notary to complete the process of buying real estate in this country.

When you want to buy a property, a notary is mandatory to validate the ownership change. Property ownership in Switzerland is valid only if certified by a notary with an authentic act. This means you must find a notary to help authenticate the purchase contract because the notary is the only expert qualified for this.

Property transactions are rare for most individuals, and unless you’re involved in doing so for work, you need an expert who can guide you through the process. This article lists the main reasons for considering notary Switzerland options as well as the information about the notary role.

Choosing a Notary in Switzerland: Why and How?

Depending on the canton in Switzerland, it is a custom that the buyer should choose the notary, but sometimes you have no choice other than to use the office in force. Notary options in Switzerland are different because the canton employs them. Therefore, you need to contact the municipality department to find the notary.

The choice of a notary remains free in some cantons like:

• Bern
• Aargau
• Basel-Landschaft
• Fribourg
• Basel-City
• Geneva
• Neuchâtel
• Ticino
• Jura
• Uri
• Valais
• Vaud

Notary benefits here are more liberal, and notaries are independent but still under canton supervision.

In contrast, these cantons have mixed systems:

• Appenzell Ausserrhoden
• Appenzell Innerrhoden
• Graubünden
• Glarus
• Lucerne
• Obwalden
• Nidwalden
• St. Gallen
• Solothurn
• Zug
• Thurgau
• Schwyz

In these cantons, you can select a notary freely, but they won’t be in charge of all the steps when you buy a property. That’s why you’ll need to contact your real estate agent to inform you about these cantons’ specifics. 

Is a Notary Mandatory in Switzerland?

Notary work is mandatory with rare exceptions according to the canton of the sale. You must involve a notary when buying a property because they are responsible for the sale formalization. Property ownership is not legal without them, and one notary is sufficient for both parties.

Also, they will assist you in completing all the essential checks, provide a proper sale, and offer necessary advice. One benefit of hiring a Swiss notary is also checking if the sale price is acceptable and can cover all debts.

The notary guarantees the ownership and property quality, playing the role of a guarantor. It’s their job to complete the Switzerland mortgage searches and verify the quality of the property (a piece of land, house, apartment, etc.). 

Notary’s Role in a Property Purchase

The notary role here is crucial, and depending on the canton, there are some specifics. 

To authorize the sale and report the property ownership change, here are the steps the notary has to take: 

• Drafting the deed
• Signing the final deed
• Registration in the Land Register
• Establishing the note of a mortgage loan

Drafting the deed

Once you choose or appoint a notary, they must draft the contract first. To prepare the deed, the notary has to gather specific information about the seller, buyer, and property. Sometimes this is done in the State notary’s office, and the real estate agent is in charge of the sale information.

The real estate agent then gathers this information and submits the request for drafting to the notary. The deed must include the obligations and rights of both buyer and seller, the purchase price, payment terms, easements, or land charges. When a draft deed is completed, the notary sends it to the buyer and seller for review and additional advice.

The notary also answers all questions and can help find solutions if a disagreement happens, modifying the contract while keeping in mind all the remarks.

Signing the final deed 

When both parties agree on all the contract terms, they meet in the notary’s office to sign the final deed. The notary will read the contract to both parties carefully, and the buyer and seller will sign the final version with the notary certifying it.

A direct sale is an ownership transfer operated on the same date. In a direct sale, a buyer must pay the full payment, and the seller gives the key to the buyer. If it cannot be operated on the same date, then it is a case of a forward sale. In this case, the payment and the key transfer take place at a later date.

When it comes to a forward sale, the buyer usually pays the deposit, making it possible for a seller to find time to choose a new home. In both types of sales, the notary guarantees that the buyer possesses the total amount of the money on the signing day.

Registration in the Land Register 

Once everyone signs the deed, what follows is the registration in the Land Register. This step is crucial because this is where the buyer becomes a property owner. In liberal notary system cantons, the notary does the registration. In other cantons, it depends on the notary’s office organization.

Establishing the note of the mortgage

Establishing the mortgage note is necessary if the buyer wants to invest in a property with a mortgage. Sometimes, the mortgage note can be given to the buyer free of charge or resold. The mortgage issue is all up to the notary to resolve and proceed with the buying.

When you finish all these steps, the purchase is finalized, and you successfully bought a property in Switzerland. This procedure generates some costs called notary fees. Depending on the canton you choose and the value of the purchased property, you can have potential tax on real estate gain.

Additional responsibilities of a notary

• Ensuring legal compliance: The notary ensures that the transaction complies with Swiss laws and that all documents are correctly prepared and signed.
• Guaranteeing payment: The notary verifies that the buyer has the necessary funds to complete the transaction and manages the transfer of payments.
• Providing neutral advice: As an impartial party, the notary offers guidance to both the buyer and seller, ensuring that their interests are protected.

Notarizing Real Estate Documents

Different states set different rules for real estate transactions. Some of them demand an attorney or additional licenses. In some states, it is required that the notary fee amount be restricted as well. Based on the canton and property location, purchasing a property and documents can vary.

Not every document in a real estate package requires a notarization. Most documents are purely disclaimers and forms that only need a signature. However, you will encounter one of these real estate documents that require notarization:

• Title insurance license or Closing agent license
• Real estate attorney (Sometimes, an attorney must be present while closing a property.)
• Deeds
• Deed of mortgage or trust 
• Testimonies

Non-attorney notaries must avoid unauthorized law practice with a closing document. You may have some questions that a notary cannot answer without searching for information from the title company or the lender. Ensure that everything is clear before you buy a property.

The Closing Process

The closing process, from giving an offer to finalizing the sale, depending on the canton or how complicated the transaction is, can take from 7 to 60 days. However, document signing and notarizing real estate documents can be accomplished in a day, taking anywhere between a few minutes to several hours.

A couple of factors affect how much the sale will last and what paperwork to include. For example, buyers and sellers have different documents to sign. The seller needs to sign the deed, the closing statement, and a couple more other documents, so the process is not as long as for the buyers.

The buyer must sign a promissory note, a mortgage or trust deed, and the closing disclosure. Also, sales and refinance require different forms, for example, The Right to Cancel Form.

Financed purchases have a lot of paperwork for the buyer to sign. Financed transactions help to set the lender’s right to possess property if the borrower defaults on a loan. On the other hand, cash purchases are much more straightforward and involve less paperwork on both ends.

The notary should plan their appointment when both buyer and seller review the documents and have an agreement before closing. Some document signings can take many hours if one of the parties hasn’t reviewed all the documents, so everyone must agree, and the property purchase will go smoothly.

Cost of Notary Services

Notary costs in Switzerland vary by canton and are typically a small percentage of the purchase price. For instance, fees range from 0.1% in Zurich to 0.5% in Bern and up to 0.6% in Geneva and Ticino. The costs are often shared between the buyer and seller, although this depends on the canton and the purchase agreement between the parties.

Additional costs include:

• Land register fees: Usually under 1% of the purchase price, shared between buyer and seller.
• Mortgage certificate fees: 0.1% to 0.3% of the pledged amount, borne by the buyer.
• Property transfer tax: Varies by canton, with some regions exempting certain transactions, such as transfers between spouses or inheritances.

Summary

As seen above, buying a property in Switzerland is not as simple as it may initially seem. You must follow several steps to ensure the purchase is legal and smooth. 

A notary plays an essential role in this process, and it’s crucial to understand what they do and how they can help you before signing on the dotted line. 

Schraner Luxury Realty offers excellent options for buying real estate in Verbier and the surrounding area. If your chosen property is there, look for the services of a Verbier notary. A notary is an objective side, someone you can rely on for advice and has all the knowledge of real estate law.