How to Close a Real Estate Deal in Finland

How to Close a Real Estate Deal in Finland

Real Estate Market

If the pricing of the apartment is in line with market prices and the showings have gathered people, one may expect offers for the house in a few weeks time. Even an oral offer is binding, but it’s highly recommended that the buyer fills in an offer application form (ostotarjouslomake) and sends it to the seller of the apartment in order to make the process more clear.

Patience is important when selling your apartment. If the offered price is lower than average market prices and you have no reason to sell the apartment quickly, you can wait for higher offers. Average marketing time – the time advertisements are publicly listed in the housing portals is, as of writing this article, 40 days in Helsinki and 75 days in the rest of Finland. The bigger the apartment, the longer is the marketing time.

  • Studio apartment in Helsinki: 24 days

  • Two-bedroom apartment in Helsinki: 31 days

  • Three-bedroom apartment in Helsinki: 46 days

  • Four-bedroom or bigger apartment in Helsinki: 60 days

Offers

The offer form (ostotarjouslomake) must include information about the terms of the offer such as: does the buyer need to pay a non-refundable deposit when making the offer or if there is a standard compensation the buyer has to pay in case he withdraws from the deal later on.

The deposit or compensation can be up to 4 % of the selling price (debt not included). If the buyer backs out of the deal without a valid reason, the seller keeps the deposit. Also, if the seller backs out of the deal without a valid reason after accepting the offer, she/he should return the deposit and, on top of that, pay an equally big compensation to the buyer. A buyer can also include conditions, for example, getting a loan from a bank that counts as a valid reason to back out if the buyer is not able to secure a mortgage.

It recommended to include a clause on a deposit or compensation in the offer form (ostotarjouslomake) so that there is a set limit to compensation in case either party backs out. If either party backs out of the deal and the compensation is not defined, the compensation may rise higher than the deposit or the amount of money the compensation would have been.

Closing the Deal

Make sure that the contents of the bill of sales are equivalent to what you have discussed with the seller. Also, remember to check that all known flaws and deficiencies of the property are listed in the bill of sales or in its attachments, so that, if necessary, later on, you can point out that the buyer has been aware of the circumstances.

Also, be sure to check in with the housing manager that the house manager certificate (isännöitsijätodistus) and information about the apartment shares of debt are up to date.

You should also make sure that you deliver final documents and attachments needed in good time before the deal-making to the buyer so that she/he has sufficient time to review them before deal closing.

If the buyer takes out a mortgage, the closing deal will most likely be done in the bank of the buyer. Ask the buyer to reserve a time at the bank for closing the deal.

Be sure to be in touch with your bank about selling your home. The housing company shares (asunto-osake) that are needed to close the deal are usually kept at your bank as collateral for your mortgage. Make necessary arrangements with your bank so they transfer the housing company shares to the deal-making occasion.

The deal is closed when the buyer and seller have signed the bill of sales. Do not transfer the housing company shares to the buyer before she/he has paid the contract price. If the bank is part of the deal (either half of the deal has a mortgage) the bank will help with facilitating money transfer and transfer of the housing company shares.

The Sales Contract States:

  • Parties to the contract (name, social security number, and address)

  • Property being sold: specification of what property is being sold (housing share, share number, number of shares, apartment to which shares are entitled to, is the sale price based on square meters, and whether the size of the apartment has been checked or not)

  • Sales price (deposit amount, when it has been paid and entire sale price)

  • What share of the housing corporation's loans are allocated to the shares being sold, and debt-free price of the shares.

  • Terms of payment (by which date purchase price has to be paid, conditions in case of delay)

  • Date of ownership transfer and transfer of shares

  • Date of transfer of property possession

  • Date until which the seller is responsible for the payments to the housing company

  • Seller affirms that she/he has informed the buyer of all known facts about the apartment that may affect the purchaser's decision and any changes made to the apartment before the closing deal.

  • Buyer declares that she/he has checked the apartment and looked through the property manager's certificate and confirms said documents by signing the contract

  • Signatures of both seller and buyer

  • At least three identical bills of sales (one for the seller, one for the buyer, one for the housing manager)

Transferring the Right of Possession to the Apartment

The apartment keys are handed over to the buyer once apartment ownership is transferred to the buyer. The exact date is specified in the bill of sales. If the apartment includes other security systems, these must also be handed over to the buyer at the time of the transfer of ownership.

Selling an Apartment While Leasing It

If you sell an apartment that is leased out, you will need to give the original lease agreement to the buyer when closing the deal. In addition, rental guarantee paid as rental security should also be transferred to the buyer.

Taxation

Any profits made when selling an apartment are taxed with a 30 % capital gains tax up to 30,000 € and any part of the gains exceeding 30,000 € are taxed 34%. If you have owned and lived in an apartment for more than 2 years, no tax will be charged. For more information about taxation, visit the Tax Administration website.

The material on this website is for informational purposes only and the information contained is not intended as guidance or advice. The material on this site is presented as it was on the date of publication and we do not give any warranty as to its correctness, timeliness, or completeness. If you need any advice on how to sell your apartment, please contact our customer service. In tax matters, you should contact your local tax office.

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