Property Purchase Process

The process from purchase contract to the close of the sale averages 30 to 45 days.

The first step to purchasing property in Hong Kong is three fold:

Have a minimum 5% to 10% down payment available in your bank account to be used as a deposit.
Have all closing costs available in your bank account.
Obtain a pre-qualification for the remainder of the purchase price.

After obtaining the services of both a realtor and a solicitor, and finding a property to make an offer on, you and your seller will enter into a Provisional Agreement for Sale and Purchase. This agreement is not a formal contract and has no standard forms, but it is binding and should be reviewed by your lawyer prior to signing and outlines the following:

The name, address and Hong Kong Identity Card number for both the seller and buyer.
A description of the property.
The agreed upon sale price.
The manner in which payment will be made, including the initial deposit, any future deposits and the balance of the price.
A statement that the property is free from undisclosed encumbrances.
How delivery and possession of the vacant property will be executed.
The information for both the seller’s and buyer's attorney/solicitor.
A description of legal costs and stamp duty, including which property is responsible.
A clause regarding actions to be taken in the event of a buyer’s default.
A clause regarding actions to be taken in the event of the seller’s default.
Information regarding the estate agent’s commission, how it will be paid, and by whom.
A clause that the property is sold on "as is" basis.
A clause regarding a defaulting party’s responsibility to pay commissions and stamp duty. Any other particular terms agreed upon by the buyer and seller.
Acknowledgement of receipt of the initial deposit.
Dates for further contract and completion.

After the Provisional Agreement for Sale and Purchase is signed, a Formal Agreement for Sale and Purchase is signed. There are also no standard forms for a formal agreement and the agreement covers many of the topics included in the Provisional Agreement, in further detail, and also includes the following information:

Particulars for the seller and the buyer.
An agreement to sell and to purchase.
The completion date for the agreement.
The place for the completion.
A description of furniture and fixtures.
An agreement by the seller to prove that the title of the property is good and clear.
Requisition on title.
Buyer’s insistence on requisitions.
Original documents.
Encumbrances and easements.
Risk of Property disclosure.
Specific performance.
Time of Essence.
Orders or notices before completion.
Costs associated.
Discharge of existing mortgage.
Seller’s capacity.
Inspection periods set forth for the buyer’s mortgagee.
Third party clause.

The forth step is Redemption, which is the process of paying off the mortgage held on the property by the seller.

The fifth step after all provisions in the Provisional and Formal Agreements for Sale and Purchase have been met is Assignment, which is when the buyer of the property takes possession of the property, becoming the new legal owner.

Next: Income & Outgoings

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