General Transaction Procedures for Hong Kong Private Property
Owner lists the property for sale, and buyer selects the property for purchase.
Buyer (through a real estate agent) negotiates and discusses terms with the seller.
Both parties sign a provisional sales and purchase agreement and the buyer pays a deposit (generally 3-5% of the property price).
Within 14 days of signing the provisional agreement, both parties sign the formal sales and purchase agreement, and the buyer pays the down payment (generally 10% of the property price minus the deposit already paid).
Stamping of the agreement, payment of stamp duty, and registration of the contract at the Land Registry.
Both parties agree on the completion date (usually within one month after signing the formal agreement).
Buyer's solicitor verifies the title.
Buyer's solicitor prepares the deed of assignment and the seller's solicitor reviews it for accuracy.
One day before completion, the buyer inspects the property to ensure everything is in order.
Completion day:
- Both parties sign the deed of assignment in the presence of solicitors.
- Buyer's solicitor hands over the balance of the property price to the seller's solicitor.
- Seller hands over the property and the keys to the buyer (the date of property handover is agreed upon by both parties).
Stamping of the deed of assignment and registration at the Land Registry.
Transaction completed.
Notes for Property Listing by Owner and Property Viewing by Buyer:
Owner can contact or visit a real estate agent to list the property.
Buyer must sign the "Estate Agency Agreement - Buyer's Version" (commonly known as the "Viewing Document") when viewing properties through a real estate agent. If the buyer successfully purchases the unit within three months, they are required to pay the applicable commission to the real estate agent.
Notes for Signing the Provisional Sales and Purchase Agreement:
Prior to the transaction, it is advisable to inquire with a bank regarding valuation and mortgage matters.
After reaching an oral agreement, the buyer must pay a provisional deposit, commonly known as the "deposit," which is generally 3-5% of the property price.
When signing the provisional sales and purchase agreement, both parties should clearly state:
- Names of the buyer and seller or company names.
- Property price (including deposit, down payment, and balance payment method).
- Signing date of the formal sales and purchase agreement and completion date.
- List of furniture and fixtures to be transferred with the property.
- Responsibilities and consequences of non-compliance for both parties.
- If there are unauthorized structures, alterations, or upcoming building repairs, it should be stated which party is responsible.
Notes for Signing the Formal Sales and Purchase Agreement:
Within 14 days after signing the provisional sales and purchase agreement, the seller's solicitor prepares the formal sales and purchase agreement, which is reviewed by the buyer's solicitor before signing.
When signing the formal sales and purchase agreement, the buyer, through their solicitor, pays the stamp duty and the formal down payment, commonly known as the "down payment," to the seller's solicitor.
After the buyer's solicitor drafts the deed of assignment, it is reviewed by the seller's solicitor. Once confirmed to be accurate, both parties can sign the deed of assignment at the designated completion date at the solicitor's office.
Before the completion, the seller must settle the outstanding fees such as water, electricity, fuel charges, management fees, rates, property tax, and other miscellaneous expenses. At the same time, they can retrieve the aforementioned deposits.
The buyer must inspect the property before the completion to ensure everything is in order, and then inform their representing solicitor to deliver the balance of the property price and the signed deed of assignment to the seller's solicitor. The buyer is also responsible for applying for utilities such as water, electricity, and fuel.
Once the seller's solicitor receives the balance of the property price, they must hand over the property and the keys to the buyer on the agreed date.
The buyer's solicitor, upon receiving the deed of assignment, is responsible for registering the deed at the Land Registry.
After the signing of the formal sales and purchase agreement, the buyer legally becomes the owner of the property and assumes all risks of damage to the property.
