A short guide to buying an apartment in Poland via mortgage

Buying an apartment in Poland does not have to be complicated if you are well prepared for the task.

It becomes a bit easier when the purchase is through the mortgage and you are using a mortgage broker as besides the assistance throughout the banking process - they also should have enough experience to deal with issues related to the property itself.

The process of the purchase differs depending on the source of the flat you are buying, as it is not the same when you buy it from the developer and when you buy it second-hand. Let's start with the developer scenario.

Finding a property from the developer can be done independently by checking the websites of the developers existent in your city or websites gathering information about the investments going on in the city, for example, investmap.pl, or with help of a real estate agent. You can also sign for the developers' newsletters, as often they use this channel to inform customers about new investments or discounts. It is wise to research the developer who is building the investment you are interested in, through online forums, etc. - to see what to expect later. Buying a flat from the developer via a mortgage gives you a kind of safety from this point of view as well, as the bank checks not only you and the flat itself but also the developer's reputation.

After you already found the investment and particular flat that suits your needs, you need to contact/meet the developer to reserve it. At this point, the developer should also provide you with the Information Prospectus, in which they need to inform you about their company registry data and their experience (investments they already finished or are building). It should also include a description of the investment of your interest, the legal status of the land, the plans considering the plots surrounding it, etc. Besides that, Prospectus should contain a draft of the sales agreement and the rules around it, like the payments' schedule. It is recommended to consult this document with your mortgage broker or another specialist to make sure its content is meeting the standards of the market and will not jeopardize your mortgage application.

After you checked the Information Prospectus and everything is ok, the next step will be signing the reservation agreement or pre-agreement regarding the purchase of the flat of your choice. Again, before signing this document you should consult it with your broker, as it will determine many aspects directly affecting your mortgage application. For example, it will specify when the developer requires the transfer of the first payment, so your broker must check if the demanded deadline is realistic. Or it will explain the legal status of the garage and whether it can be accepted by the bank to be a part of your mortgage or you need to buy it separately.

Please keep in mind that you can simply provide your trusted broker or lawyer with the developer's contact details, and all of the issues explained above, as well as other not mentioned that might occur, would be sorted without consuming your valuable time.

After signing the reservation or pre-agreement and providing all the remaining documentation required by the bank, we can start the application process. We will explain the mortgage process itself in a separate article, in the meantime feel welcome to query us directly for assistance.

In shortcut, the bank will not only analyze your financial situation but also evaluate the property you are buying, as well as make sure you are buying it from a trustworthy developer. If everything is fine, the price is accepted and the bank issues a positive decision regarding your mortgage, the last step is to sign the final sales agreement between you and the developer. Subsequently, the bank will start transferring tranches as per the payments' schedule and due to the progress of the building. With the last tranche, you should also receive the keys to the flat, and depending on the deal with the developer, start living in it or renovating it.

When getting the keys from the developer, we also recommend using a service of one of the companies performing a property check-up, as they could find issues not necessarily visible with the naked eye, which the developer would need to fix for you. After you sign the acceptance report and you find some issues in the flat later, getting the developer to fix it might be challenging.

Here are some of the companies that provide such service:

• https://odbiormieszkan.dekra.pl/
• https://pewnylokal.pl/
• https://www.inspekcjadomu.pl/
• https://kejor.pl/

The whole process will look different when it comes to the purchase of the second-hand flat.

The most popular way of finding such property is via sales websites. Most of the offers you will find would come from real estate agencies, but it is still possible to find some flats directly from the owner. In case you choose the property offered by the agency, please keep in mind there will be some commission to pay. Another cost that does not occur when you are buying the flat from the developer, while it does in most cases when you are buying second-hand is PCC tax. Its amount is fixed - 2% of the property value and, as the real estate commission, it has to be covered from your funds, not via a mortgage.

The most popular websites to find a second-hand apartment are:

• otodom.pl
• olx.pl
• morizon.pl
• domiporta.pl
• Facebook Marketplace

Let's say you found the flat you want to buy. You went to see it, negotiated the price to the final amount, and are ready to proceed with the mortgage. The first step you should make is checking the property's status in the land and mortgage registers. Each property in Poland has its registry number and after obtaining it you will be able to see the data about ownership, non-standard situations, and the mortgage status of the property. The registers will tell you if the flat is "clean" and if the bank will accept its status.

Another document advised to ask for is the one confirming there is no-one registered at this address (Zaświadczenie o stanie zameldowania w lokalu) - you can also get this document yourself at the dedicated department of the City Hall. Also, it is wise to check if there are any unpaid liabilities towards the Housing Association of the building the flat is in. Besides that, you can check the local development plans, in big cities available online, to see what might be built around the building in the future.

Besides formal check-up, we recommend using one of those technical check-up companies we listed above. It might save you trouble in the future.

After you checked everything and you did not find any red flags, you can proceed with signing a pre-agreement with the seller. Again, it is better to consult this document with your broker or another specialist before signing it, for the same reasons as in the developer scenario. After signing the pre-agreement and collecting the rest of the documentation needed, the mortgage application can start. In the same way, as with the flat from a developer, the bank will proceed with property valuation, based on which final mortgage amount will be accepted or trimmed. In case the bank does not agree with the price tag seller has put on the property and lowers its value, given you still want to proceed with the purchase, the difference must be covered from your funds.

At last, after the mortgage process is done, you can sign the final sales agreement, then the bank will transfer the money to the seller, the deal will be closed and you will be able to move in into your new flat - or start the renovation.

That is how, in a nutshell, the process of buying an apartment with a mortgage looks like in Poland. To consult your specific case and get all the answers you are looking for - feel welcome to contact us directly.

Best regards,
Loan-brokers.pl Team

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