Why it is profitable to invest into real estate during a pandemic and how to make a deal remotely. The expert explains
The franchise partner of the largest chain of real estate agencies in Hungary, Ilona Csik spoke REALTING why investments into real estate are profitable now and how the purchase and sale transaction is processed remotely, without the personal presence of the buyer.
— Our office is mainly operating with foreign clients who, in most cases, buy property as investment, — Ilona says. — In this regard, over many years of work we developed a system for buying real estate with a minimal presence of the client or without their presence at all — investors are generally very busy people. During the lockdown period such system enables you to purchase remotely.
The outline of such purchase structure is given below.
- On the site you look through the options proposed and get full information of the properties you are interested in.
- After you have selected the appropriate option, we write a request for a purchase. You sign this request, then send the scan copy back to us and transfer 1% of the value to the lawyer’s deposit account as a guarantee of your purchase. When signing the Real Estate Purchase Agreement, this amount is credited to deposit.
- The lawyer prepares a power of attorney for the transaction, which is signed with the client via Skype (video power of attorney), and sends the Draft Agreement, which is also negotiated on the Internet. The Agreement must be in Hungarian, and upon the client’s request — in Russian or English languages.
- After the Agreement has been agreed, the date of its signing is fixed, and the client transfers the deposit amount to the lawyer’s deposit account in accordance with the Agreement. It is worth noting that the use of a lawyer’s deposit account enables you to save money on the exchange rate difference, since the transaction is made in Hungarian forints, and the client is calculated in euros or dollars.
- After signing the Agreement, the lawyer delivers it to the Land Registrar and to the Metropolitan Government Office for the city of Budapest to obtain a purchase permit. The full execution procedure takes 60 days under law. A purchase offer is issued to everyone who is not in the international wanted list of the Interpol database.
- At the end of the registration procedure, the client transfers the remaining amount to the lawyer’s account. The buyer personally or a representative of the management company, which the buyer selects during the transaction, meets with the seller on site. An acceptance certificate with meter readings is completed on the spot. Next, a copy of the minutes and the so-called zero certificate indicating that the seller has no debts for general maintenance costs is left for the lawyer. Based on these documents, the accountant transfers the remaining amount to the seller’s account, and the seller gives the keys to the buyer. The lawyer submits the documents to complete the transaction in the name of the buyer.
— It follows from the purchase scheme described above that that in the current situation with coronavirus it works perfectly well. Analysis of market conditions shows that prices have not changed as some expected, they will go down. However, the number of sales has dropped sharply, the market seemed to freeze and wait. And you can benefit from all this — to get a very good discount, which under normal circumstances was out of the question.
As I said before, the whole processing of a transaction takes 60 days after signing the Real Estate Purchase Agreement, means, only about 3 months. According to preliminary forecasts, after about two months, the situation with the epidemic will normalize and you will just take possession of the property purchased at a very competitive price. After lockdown ends, you will not count on such prices.
According to Ilona, it is not difficult to select a good option remotely. What you need is to correctly formulate your request — and you will receive a selection of options, which is fully compliant with it. A detailed description, photographs, area of the premises with the exact layout, the condition of the house inside and outside, the exact location on the map — all these data enables you to give a comprehensive picture of the property. In some cases, depending on the size of the property, a virtual tour available.