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Before a property can
be sold in China, certain checks (such as exact measurements
of the property) must be made on both the property and
the owner. In some cases there is a need to apply for
government and public security bureau approval. During
the purchase process itself, a number of legal documents
must be signed and require legalising by the Chinese
consulate. Some of this documentation must be completed
in China, but this can be done through an agent and
a power of attorney arrangement.
Before deciding to buy it is a good
idea to look into loan applications or financing, if
required. A number of foreign banks will provide mortgage
facilities for those wishing to purchase property in
China. It is also necessary to open a local bank account
and to register this with the appropriate authorities.
This bank account will be the base for any transactions,
such as rent payments, to be made with regard to the
property. A bank with internet and telephone banking
is a recommended option for this process, as buyers
are thereby able to keep track of transactions and funds.
To book a property it is necessary
to pay a small reservation deposit. The buyer and seller
will then enter into an ‘official sales contract’,
which in the case of foreign buyers must be notarised.
At this stage, another deposit is made, typically 20
or 30% of the purchase price. Application will then
be made to the government Deed and Title Office for
the deed transfer from the seller to the buyer, on payment
of the relevant taxes and fees (which will typically
amount to around 5% of the purchase price). Before this
transfer can be made the seller must have paid off any
existing mortgage on the property. The ownership certificate
is then issued and the buyer pays the outstanding balance
on the property and takes possession. This payment schedule
also varies depending on the developer.
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