by compsolutions » Sat May 30, 2009 10:50 am
When you sign the contract, you typically pay 50,000RMB as deposit.
Get a receipt from the bank for the 50,000. Get a receipt from the agent for them receiving the 50,000.
If you cannot get the mortgage, you will forfeit the 50,000. If the seller pulls out, he will forfeit the same.
Sounds like you have no idea about any of this.
I *strongly* recommend you get someone to help who has done this before, and who you can trust.
The terms in the contract can be changed as per your requirements.
I'm paranoid about timing, so I usually add extra time to each stage, so that things don't go fubar.
What usually happens for loans here is that you can either go to the bank yourself, or the agent will have contacts that can get you the loan from the bank.
Its easier if the agent does that for you.
Getting a loan here is pretty easy. You won't be able to apply until you both have signed the contract to buy / sell though (thats the 2nd contract, the first is the offer to purchase).
Loans will depend on how much deposit you are paying, what kind of apt it is, and how much you are borrowing.
Old apt's (ie anything < 1990), need a 50% deposit. New apts you can put down as little as 30%.
For loans < 1.8M the bank won't need much in the way of paperwork. For amounts over that, you will need to provide tax receipts, and a whole variety of other fun things.
As a foreigner, you also need to have a work permit. Have been living here > 1 year.
You will also need a Chinese name, this can be arranged at the notary office.
Also, if your passport has changed since you have been here, and the numbers are different, that will cause delays.
TIPS:
*GET* Receipts for everything. Make people sign for everything money related to say they received it.
Make multiple copies of passport, work permit, residence permit. Suggest at least 10 each.
Strongly suggest make a folder with all the paperwork, and carry that with you to every meeting you'll have.
Procedure for buying an apt is something like this.
Step 1:
You give deposit to agent, and sign contract.
Seller signs contract in a day or two, and also gives deposit.
The agent holds onto that.
At this point you aren't committed *until* the seller signs.
After than point you are both committed to purchase/sell and will forfeit whatever the contract says. (Typically deposit for you/ deposit x 3 for the seller)
Step 2: (roughly 1 week later)
Once seller signs contract, you will have another contract which is the purchase contract.
You will go to the agents office, and sign, the agent will organize a notary to check the documents, and a bank person to get the details for your loan.
You will need to pay the seller some money. Typically this is a 3rd of the price of the property (can be more). You will go to the bank, and transfer this money to the seller.
They use this to pay off their mortgage (if they have one).
At this point you will need to pay the notary fee's (3000rmb+-)
The agent will show you the green book for the apt (the ownership book), make sure all the details are correct in the book. *Checking that is extremely important*. Check the sellers name matches, the apt size is correct, etc etc etc. The agent will keep that book until the transfer is done.
The agent will start all the paperwork for your name / purchase approval. This takes about a week for foreigners. You will need to go to the notary office with the agent if you haven't got a legal chinese name already. The agent will typically take your passport away for a few days to do this stuff. Get a receipt.
Step 3: (roughly 2 weeks - 10 working days).
The bank approves the loan, and you get the money. Yay!
You'll also need to buy insurance for the apt (mandatory with certain banks). Not expensive. Around 6000rmb per 1Million last time I checked
You and the seller go down to the local district housing office, and do the fun paperwork bit.
You'll need the multiple copies of everything I mentioned for this point mostly.
You'll both go to the bank, transfer the rest of the money to the seller.
If you are getting a mortgage, the bank will usually send someone also to take one of the essential pieces of paper.
You'll also need to pay the tax to the housing office.
The agent will hopefully have done this before, because the housing office is mayhem, with lots of queuing at different windows.
At this point the apt is essentially yours.
You'll also need to pay the agent his fee's at this point (or step 2)
Step 4: Possession (up to the seller, usually either immediately after step 3, or a week or two later).
You will pay the last of the money to the seller (usually 100,000rmb is kept back until this point).
They will have paid off all the bills, management fees, and the management office (if there is one for the building) will help you transfer the bills to your name, and give you the keys.
The apt is now yours!
Its all pretty straightforward.
If you don't speak / read chinese, I would strongly recommend getting someone to assist with the process.
Also, for every stage, double and triple check everything.
Add at least an extra week for any stage as you are a foreigner. You don't want to forfeit the contract because something takes longer. All times are flexible, make sure that you give yourself ample time at each stage.
Get receipts for everything. I cannot emphasize that enough.
If something goes wrong, you want proof you have done things.
Make copies of everything for your records. eg contracts, etc.
Be prepared (eg have extra photocopies, bring everything remotely necessary with you to every meeting you have).
Example of why you double and triple check everything:
In my last sale, the agent ran off with part of the deposit money.
However, we had a receipt from the bank for the money we took out, and we also had a signed note from the agent saying he'd received it.
The agency had no problems with us because we could prove we'd paid it.
Wasn't our issue, and although I was concerned, the sale went through smoothly.
The agency went to the police and sorted it out with the agent.
Good luck!
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