Hong Kong has a very vibrant real estate market that attracts both local Hong Kongers as well as foreigners. People love the region because of its diversity, multi-cultural environment, good business environment, and much more. Compared to other regions, owning or selling property in Hong Kong is relatively simple and straightforward. Here are our 10 Easy Steps to buying residential properties in Hong Kong.
- Put Property on the Market. The first step taken by a property owner is putting the house, office, warehouse, or any other property on the market. This is aimed at making the public aware that the property is available for sale, and therefore any interested purchaser or potential owner can buy it. There are several ways of publicizing the property. These include word of mouth, appointing a sales agency such as Qi-Homes whose website allow landlords to list their flats interactively.
- Price Negotiation and Other Terms The next step entails negotiating the terms of sale, the price of property, and other issues. The goal is for the owner to fetch a reasonable price for the property and sell it within a short time. On the other hand, the buyer desires to find a good property that meets his/her needs and is also affordable. The negotiations can be between the owner and potential buyer, or the sales agent and the buyer.
- Provisional Agreement for Sale and Purchase. Once the purchaser and the buyer have agreed on the price and terms, both the seller and buyer need to sign a Provisional Agreement for Sale and Buying. This is a temporary document that indicates the willingness of the property owner to sell and the interested buyer willingness to own the mentioned property. Normally, the buyer is required to make a down payment or initial deposit to the property owner or held by a lawyer/solicitor as “stakehold” The value ranges from 2 to 5% of the total price of the property.
- Formal Sale and Purchase Agreement When 14 days elapse following the signing of the Provisional (temporary) Agreement for Sale and Purchase, a new document referred to as Sale and Purchase Agreement replaces the earlier one and is signed by the buyer and seller. The buyer is required to pay an additional sum which is the difference between 10% of the agreed price, minus the earlier amount paid (2-5%).
- Handling Legal Issues In the next step a solicitor is involved and is charged with ensuring all the legal requirements have been adhered to. Besides confirming the earlier paperwork the solicitor pays stamp duty which is a mandatory requirement in Hong Kong. He also registers the Sale and Purchase Agreement with the Land Registry.
- Completion of Transaction The seller and buyer negotiate and agree on the expected date of concluding the transaction. This is normally determined by the period the buyer will be able to raise the balance or have the mortgage approved. Normally, the time period in Hong Kong is about a month.
- Drafting the Assignment Deed The lawyer representing the purchaser drafts an Assignment Deed that basically states that the previous owner has agreed to transfer the mentioned property to the new owner (buyer). The deed contains all the necessary information such as plot number, size, date of registration and much more. The purchaser’s lawyer furnishes a copy of the document to the seller’s lawyer/attorney for approval.
- Property Inspection After approval of the Assignment Deed by the buyer’s lawyer, the soon-to-be owner inspects the property once again to ensure it matches what is stated and is suitable. This is done to make certain the new owner abides by the Sale and Purchase Agreement terms.
- Signing the Assignment Deed. Thereafter, and after the buyer is satisfied with the property and the stipulated terms he meets with the seller and they both append their signatures on the Assignment Deed. This is done in the presence of their lawyers.
- Final Settlement The final step is for the buyer’s (new owner’s) solicitor to clear the outstanding balance. Once this is done and the amount clears/goes through, the previous owner (seller) hands over both the property as well as the keys to the new owner.
The whole process is now complete. The above steps summarize the necessary steps taken to sell and purchase a property in Hong Kong. From the word go, a buyer should be aware of Encumbrances, Bad Title, and Building Orders. For peace of mind, convenience and maximum satisfaction it is advisable to work with a reputable and experienced sales agency, lawyer, or online property platform
Qi-Homes specializes in Sale and Purchase of Hong Kong Residential and Commercial Property since 2003. We have a proven track record of getting the best possible sales price for the vendors and sourcing for the best deals for the purchaser. Our no nonsense, straight forward and honest approach helps give our vendors and purchaser a full picture of what is achievable in the current market condition, future indicators and provide realistic goals. For more information, please visit our web site www.qi-homes.com to speak to one of our real estate professionals.