Housing loan for young people

1.    Who can be a Housing Loan Beneficiary?
Housing loan beneficiaries may be individuals with regular monthly income on the basis of employment or on the basis of a pension (employed indefinitely, entrepreneurs, pensioners, foreign nationals employed in the Republic of Serbia).

2.    Can a pensioner get a housing loan?
A pensioner can be a housing loan beneficiary, but cannot be more than 70 years old at the time of repayment of the last installment of the housing loan.

3.    What is the age limit for a housing loan?
Citizens who at the moment of applying for a housing loan have at least 20 years of life, or who at the moment of payment of the last installment of a housing loan have 70 years of life.

4.    What is the maximum percentage EMI?
Regular monthly net income of the debtor is burdened with total monthly loan obligations (including installment for the housing loan for which the application was submitted) generally up to a maximum of 50%.

5.    What is the minimum salary for getting a housing loan?
The minimum regular monthly net income for citizens and residents of the Republic of Serbia is RSD 30,000.

6.    Is it mandatory to transfer the salary/pension to Banca Intesa?
Banca Intesa approves housing loans exclusively to its clients, so transferring salary/pension and opening an account in our Bank is mandatory. The relief is that you do not have to wait 3–6 months from the date of the transfer of salary/pension, but it is possible to apply for a housing loan immediately on the basis of the authority to transfer salary/pension certified by the employer, with at least one salary to be paid to the newly opened account before the loan is disbursed.

7.    What costs do I have to pay in the process of approval and realization of a housing loan?

• Fees payable to the Bank (loan application processing, bill of exchange, CB),
• Certification of documentation with the notary (pre-contract, contract, lien statement),
• Mortgage registration fee,
• Preparation of real estate appraisal,
• Real estate folio in the land register,
• Transfer costs,
• Foreign exchange rate differences.

8.    What is creditworthiness, can I increase it and in what way?
Creditworthiness is the financial ability of the debtor to pay the installment for the desired amount of the housing loan. The Bank, on an individual client basis, performs a creditworthiness check based on his/her existing monthly credit obligations (they are shown in the report of the Credit Bureau), new installment of the housing loan for which the client applies, the monthly amount of the market basket (official statistics for the first member of the household) and regular monthly net income based on employment/pension.

Creditworthiness can be increased (and therefore eligibility for a higher amount of housing loan) in the following ways:

• if the client reduces or repays existing credit obligations,
• if the client has additional revenues that can be documented and that meet the requirements of the Bank,
• if the client applies for a housing loan together with another natural person (joint and several debtor).

9.    What are the additional revenues that can affect my creditworthiness?
Additional revenues of the client can be revenues from leasing of real estate, from ownership over equity (paid profit or dividends), from royalties and intellectual services and income from membership in management, supervisory and other boards. In order to find out whether the stated revenues meet the requirements of the Bank and whether they are considered in the calculation of creditworthiness, it is best to make an appointment with our housing loan specialists.

10.    What is a joint and several debtor?
A joint and several debtor is a natural person whose income and credit obligations are included in the calculation of creditworthiness, most often spouses, parents, family members and the like.

11.    What does the maximum amount of housing loan I am eligible for depend on?

• The prices of the apartment (if the purpose of the loan is the purchase of an apartment), the value of construction works (if the purpose of the loan is adaptation, reconstruction), the rest of the debt under the existing housing loan (if the purpose of the loan is to refinance the loan with another bank), so that the amount of the housing loan cannot be higher;
• Estimated market value of the mortgaged property; the amount of the loan may not exceed 80% of the market value of this property, and in some cases less;
• Creditworthiness of the client, so that the total monthly credit obligations of the client (including installment for the required amount of housing loan) cannot exceed a certain percentage of the monthly net income of the client or client and the joint and several debtor (income is reduced by the amount of the market basket).

12.    What is a credit history and how does it affect the approval of a housing loan?
Credit history refers to whether the client settles his/her existing credit obligations in a timely manner. Timely settlement of obligations is considered to be payment before the due date. E.g. payment of the loan installment at the latest on the due date of the installment according to the loan repayment plan. Timeliness, i.e. regularity in the repayment of existing credit obligations, is considered when making a decision on the approval of a housing loan.

13.    Does the Bank have an obligation to inform me of the reason for the rejection of the housing loan application?
According to the Law on Protection of Financial Services Consumers, the Bank is obliged to inform the client of the reason for rejecting the application for a housing loan in the event that it was rejected on the basis of the Credit Bureau Report.

14.    What data for natural persons is contained in the Credit Bureau Report?

• The report shows current liabilities, as well as liabilities that have been repaid or for products that have been shut down in the previous three years, as follows:  Liabilities for loans, leasing contracts, current accounts, debit and credit cards and liabilities for activated guarantees;
• Contingent liabilities, such as data on loans granted on current accounts and guarantees given (guarantors) for loans of other individuals, legal entities and entrepreneurial stores;
• Irregularity in the settlement of due liabilities – arrears, which include the amount of the outstanding obligation and the duration of the outstanding obligation. Data on arrears are shown in the Credit Bureau Report when a natural person fails to settle a due liability within 60 days, counting from the due date.

15.    How long does the procedure for granting a housing loan take until the final decision?
The duration of the housing loan granting procedure depends mainly on the correctness of the submitted documentation.
According to the regulations of the National Bank of Serbia, the maximum deadline for deciding on the approval of housing loans is 30 working days from the date of submission of the application for a housing loan with the accompanying proper documentation.
Banca Intesa strives to respond as much as possible to the needs of clients and provide improved user instructions, so that a decision can be made within 7 working days, without taking into account the time for possible supplementation or correction of the documentation submitted with the loan application.

16.    What affects the amount of the housing loan installment?

• The amount of the required housing loan,
• The amount of the interest rate on an annual basis,
• Loan repayment period (Loan term),
• Interest calculation method (conformal or proportional).

17.    Is it better to take a housing loan with a variable interest rate or with a fixed interest rate?
There is no universal answer, because it depends on the needs and capabilities of each individual client. But it is important to know the following:  

• the amount of variable interest rates (consisting of the variable part of the reference interest rate – EURIBOR and the fixed part of the margin) is, as a rule, lower than the amount of fixed interest rates at the time of loan approval, so the amount of the installment at the time of loan approval is also lower;
• a variable interest rate loan in most cases implies a longer repayment period, compared to a fixed interest rate loan, so even from this aspect the amount of installment is lower at the time of loan approval;
• in the case of variable interest rate loans, there is a risk that the value of EURIBOR will increase over time and thus increase the amount of the total interest rate, and therefore the installment, and that the loan beneficiary will not be able to repay the loan;
• when it comes to a fixed interest rate, the client pays a higher monthly installment from the beginning (the interest is higher), but there is no possibility of the interest rate being reduced or increased due to the drop in the value of EURIBOR.

If you like to plan your home budget, have sufficient creditworthiness or take a loan of lower amount, we recommend a housing loan with a fixed interest rate.

However, if you want to burden your home budget as little as possible or have additional sources of income from which you plan to repay the housing loan early (with occasional payments or an one-time payment of the entire remaining amount of the loan), or you do not have sufficient creditworthiness, we recommend a housing loan with a variable interest rate.

18.    Is it better to take a housing loan with a shorter or a longer repayment period?
In terms of the same loan amount, the amount of the interest rate and the interest calculation method, the rules for repaying housing loans in equal monthly annuities are as follows:

• Less interest is paid in total if the repayment period is shorter,
• The amount of the loan installment (on the basis of which the creditworthiness is calculated) is higher for the shorter repayment period than for the longer repayment period.

When deciding on the repayment period, one should also take into account the standard of living, because not everyone is ready to be burdened with a maximum installment and give up a certain style and standard of living to which he/she is accustomed, for a long time.

So, we advise you to find an optimal loan repayment period, which will at the same time provide you with the standard of living to which you are accustomed and as low interest as possible that you need to pay.

If you are among those clients who have additional sources of income from which they plan to repay the loan early, or you expect an increase in regular monthly income in the future, or you expect your monthly liabilities to be lower, we definitely advise you to take as short a period as possible.

If, however, your income is likely to be the same during the loan repayment period, or it may even decrease, or you expect new living expenses (e.g. children at studies), we advise you not to burden your income to the maximum, to set an optimal repayment period so that you leave room for yourself not to face the risk of not being able to repay the loan.

19.    Is down payment necessary and what is the minimum amount of down payment? Can a purchase deposit be recognized as a down payment?
If the purpose of the loan is the purchase of real estate, down payment is the part that represents the difference between the purchase price and the amount of the housing loan (it includes a purchase deposit, and may be a larger amount than the purchase deposit). The minimum down payment is 10% of the purchase price of the immovable property if the mortgage is constituted on another immovable property that is not financed by housing loan. Otherwise, if the mortgage is constituted on real estate that is financed by housing loan, the minimum down payment is 20% of the purchase price.

20.    Can I refinance a housing loan with another bank?
The client can refinance the housing loan taken with another bank. The maximum amount of the loan is up to the amount of debt that the client has on the basis of a housing loan, and up to a maximum of 80% of the estimated value of the real estate that is the subject of the mortgage.

21.    What is EURIBOR and what does its change depend on?
EURIBOR is the interest rate at which European commercial banks lend money to each other and it represents the reference interest rate on the basis of which commercial banks create interest rates on loans. Its value changes daily, while the Bank adjusts it quarterly. The change in the value of Euribor is influenced by a large number of factors, and perhaps the most important among them are the policy of the European Central Bank and economic development, i.e. the state of the Eurozone economy.

22.    What is intercalary interest?
Intercalary interest is calculated in the period from the disbursement of the loan (beginning of the use of the loan) to the beginning of regular repayment through equal monthly annuities. The amount of the interest rate at which this interest is calculated may be the same as the amount of the regular interest rate, and it is calculated on the initially paid loan amount.

23.    What is a mortgage, appraisal, real estate folio in the land register and lien statement?
A mortgage is an instrument of securing a regular repayment of a loan. It gives the Bank the right to collect the debt generated by the loan if the client does not repay the loan in time, by selling the real estate that was mortgaged.

Appraisal is a written study prepared by an authorized appraiser who is a civil engineering professional, which contains data on the real estate mortgaged, primarily its market and construction value, as well as information on the percentage of completion, if it is a building under construction. This study is a compulsory document for applying for a housing loan, on the basis of which the Bank decides whether the property has sufficient value to be eligible as a subject of mortgage.

The real estate folio in the land register (still called the title deed by some) is an excerpt from the real estate register kept by the Republic Geodetic Authority and contains data on the registered owner, as well as the encumbrances and restrictions on the real estate. An excerpt from the real estate folio in the land register must be obtained before making a purchase deposit and is an integral part of the documentation for applying for a housing loan, on the basis of which the Bank assesses the ownership-legal eligibility of the property as a subject of mortgage. If the real estate is not registered, in addition to the real estate folio, some additional documents are required to assess the eligibility of the real estate as a subject of mortgage.

A lien statement is a statement by the owner that a mortgage may be established on his/her real estate. It is drawn up and certified by a notary public, and signed by the owner/co-owner of the real estate. In practice, the lien statement is certified on the same day as the purchase/sale contract, and the notary public submits it to the competent real estate cadastre service for the purpose of mortgage registration.

24.    With or without insurance? What types of insurance are recommended when taking out a housing loan?
If we know that insurance is the only product you can't buy when it's needed and that its primary purpose is to protect you, your family or property, then we can consider it useful and justified. When realizing a housing loan, insurance of the immovable property that is the subject of the mortgage from the basic risks, such as water discharge from pipings and fire, is considered compulsory.  Banca Intesa offers its clients housing loans without compulsory life insurance, whereby the clients who want the life insurance can optionally contract it along with a housing loan. Clients who want to ensure the safety of their family are the ones who most often opt for life insurance along with a housing loan, since the main function of Rziko life insurance is the loan repayment guarantee by the insurance company in the case of an insured event, while the family of the loan beneficiary keeps their home without the obligation to pay the loan installment.

25.    What is a conditional administrative order and in what cases is it activated?
Administrative order is a form of the Bank, which is certified by the client's employer and thus undertakes, in the event that the Bank activates an administrative order in the future, to pay funds to the Bank from the employee's salary, in the amount specified on the administrative order. The Bank activates the administrative order in a situation where the housing loan beneficiary has not fulfilled his/her obligations to pay the loan installment in time, and the law stipulates that the order can be placed on a maximum of 2/3 of the salary.

26.    Can the seller receive the portion of the purchase price that is paid out of the housing loan in euros?
The funds from the housing loan are paid to the seller of real estate in dinars at the middle exchange rate of the NBS on the day of payment, on the basis of the housing loan contract, and on the basis of a certified purchase/sale contract. If a payout to the seller is foreseen in euros, the funds from the housing loan can be converted into euros. As for the portion of the purchase price that you give as the down payment, the Law on Foreign Exchange Operations prescribes that it can be given/received in euros.
 
When paying through an account, we advise you to check the amount of commission that banks charge for this transfer, since these costs are usually borne by the buyer. In practice, if the buyer and seller have accounts in the same bank, there is no commission cost for the transfer of funds.

27.    Is it possible to repay early a portion or a complete housing loan?
You may make an early repayment of the loan at any time, in part or in full, by submitting a written request to the Bank. If you repay the portion of the loan, you have the option of shortening the repayment period (to keep your installment amount the same) or reducing the loan installment (by keeping the loan repayment period the same).

28.    What are the costs of early repayment of a housing loan?
According to the Law on Protection of Financial Services Consumers, if the amount repaid was up to RSD 1,000,000 in the last 12 months, you will not incur the cost of fee for the early repayment of the housing loan.

We advise you to save a certain amount (up to RSD 1,000,000) per year and repay part of the housing loan early each year, especially bearing in mind that you do not bear additional costs and reduce the amount of the total interest you pay to the Bank.

1.    What is the role of a notary public?
A notary public is one of the most important links in the process of buying and selling real estate, which is the verification of a pre-contract or a contract on purchase/sale. His/her responsibility for the correctness of the entrusted transaction is extremely high because the notary public guarantees that its content is credible by certifying the pre-contract/contract on purchase/sale.

2.    Is it necessary to certify the pre-contract of contract on purchase/sale with a notary public?
A pre-contract cannot be certified by any notary public, but by a notary public who is competent for the administrative area where the real estate that is the subject of the purchase/sale is located. The list of notaries can be found on the official website of the Serbian Notary Chamber. The notary public enters data into a special record of certified pre-contracts and contracts and thus excludes the possibility of concluding several pre-contracts/contracts for a single real estate. In other words, if you certify a pre-contract with a notary public, the seller will not be able to conclude a pre-contract, nor a main contract with other buyers for the same apartment/house, thus eliminating the risk of losing the desired apartment/house.

A notary public is entitled to reimbursement of costs for his/her work, in accordance with the Notary Public Tariff. We advise you to certify the pre-contract and the main contract with the same notary public, because in this way the costs of certification will be the lowest.

After certification of the pre-contract with the notary public, the buyer and the seller assume the obligation to conclude the main contract on purchase/sale. Only in exceptional cases it is possible that, if after the conclusion of the pre-contract, the circumstances change so much that the pre-contract itself would not have been concluded if such circumstances, which could not have been foreseen, existed at the time of its conclusion, the obligation to conclude the main contract cease to exist. If you are buying a real estate through a housing loan, we advise you to state in the pre-contract that a change of circumstances, among other things, will be considered a possible negative decision of the Bank regarding your home loan application.

For loan buyers, a pre-contract is a mandatory document when applying for a housing loan, and the Bank also accepts pre-contracts that are not certified by a notary public.

3.    How many days in advance do I have to make an appointment with the notary public?
Scheduling with a notary public usually needs to be done a week before the certification itself.

1.    Information on the absolute rights transfer tax, VAT, capital gains.
Buying a real estate entails additional costs such as paying certain taxes required by law. Under certain conditions, based on the relevant legal regulations, you may be exempt from paying some taxes, or you may be entitled to their refund. In addition to the price of the real estate, taxes are a significant expense and we advise you to make sure to include them in your cost calculation and include them in your budget.

2.    What is an absolute rights transfer tax?
The absolute rights transfer tax amounts to 2.5% of the value of the real estate estimated by the competent Republic Administration of Public Revenues – the tax department of the municipality where the real estate is located and is payable on an one-off basis. The legal obligation to pay this tax is borne by the seller, but it is a multi-year practice that the absolute rights transfer tax is paid by the buyer on behalf of the seller, on the basis of a contract on purchase/sale that stipulates that the buyer assumes this obligation.

In practice, if the absolute rights transfer tax is not paid, the tax administration will charge the seller, regardless of whether the buyer has assumed the obligation to pay it or not by the contract on purchase/sale.

The buyer can be registered as the owner of the apartment/house regardless of whether he/she paid the absolute rights transfer tax or not.

3.    What requirements do you need to meet to be exempt from the absolute rights transfer tax?
The absolute rights transfer tax is not paid if the buyer buys his/her first apartment and if the area of that apartment is up to 40 m2 plus up to 15 m2 per household member. The condition is that the buyer did not own or co-own an apartment in the territory of the Republic of Serbia in the period from July 1, 2006 until the date of certification of the contract on purchase/sale, based on which the first apartment is acquired.

The first apartment is considered to be an apartment, that is, a family residential building, that is, an ownership interest in the apartment, as well as an ownership interest in a family residential building.

4.    What documentation is required to qualify for the absolute rights transfer tax exemption?
Bearing in mind that the seller is a taxpayer of this tax, he/she is obliged to submit the following documents, for the purpose of exercising the right to tax exemption:

• tax return on the Form PPI – 4 – Tax return for determining the absolute rights transfer tax,
• certified statement by the buyer of the first apartment that he/she is buying the first apartment for himself/herself and certain members of his/her household on the Form IKPS – PPAP,
• original or certified copy of the contract on purchase/sale of the apartment,
• birth certificate for the buyer of the first apartment,
• certificate of citizenship for the buyer of the first apartment,
• proof of residence of the buyer of the first apartment, as well as for all members of the family household (certified copy of the identity card of the buyer of the first apartment, as well as for all members of the family household),
• for family members proof of kinship and proof that they are members of the household – for children birth certificate, for the spouse birth certificate and marriage certificate, for parents birth certificate, not older than six months.

The application is submitted in the municipality where the real estate is located.

5.    How much is the value added tax – VAT?
Value added tax is 10% of the purchase price of the real estate and is payable on a one-off basis. It is calculated and paid in case of the first transfer of ownership interest in newly built facilities or economically separable units within that facility.

6.    What requirements do you need to meet to qualify for a VAT refund?
The value added tax is refundable if the buyer buys his/her first apartment and if the area of that apartment is up to 40 m2 plus up to 15 m2 per household member.

If the buyer of the first apartment buys an apartment with an area greater than the area for which he/she is entitled to a VAT refund, he/she can exercise this right up to the amount corresponding to the area of the apartment for which he/she is entitled to a refund.

Please note that if you qualify for a value added tax refund, you are required to provide the amount for paying the said tax when purchasing the real estate.

7.    What documentation is required for VAT refunds?
The following documentation is required for VAT refund:

• request of the buyer of the first apartment for a refund – Form RFN,
• statement by the buyer that he/she is buying the first apartment – Form IKPS-PDV (certified),
• contract on purchase/sale of an apartment, certified (original or certified photocopy),
• invoice for an apartment in accordance with Article 42 of the Law on VAT (original),
• minutes on the handover of the apartment,
• payment order or transfer order certified by the stamp of the Bank (proof of the buyer that the agreed price of the apartment including VAT has been fully paid to the seller's account),
• confirmation by the seller that the buyer has settled the agreed price of the apartment with VAT in full,
• birth certificate (original or certified photocopy),
• certificate of citizenship (original),
• certificate of residence from the Police Department, or a certified photocopy of an identity card,
• certificate of the competent municipality, Administration of Public Revenues, local tax administration, that the buyer is not subject to tax on the property of natural persons for the period from July 1, 2006, or the certificate of the Tax Administration if the Tax Administration is competent (if the buyer has several municipalities of residence, then a certificate from each municipality should be submitted),
• exploitation permit, decision on approval for construction (if there are several investors, a contract on joint construction is required, as well as a contract on physical division),
• photocopy of the buyer’s current account card,
• seller's documentation: proof that the tax obligation for the issued invoice or received advance payment is reported in the VAT tax return (certified VAT records, invoice book, fixed asset card, accounts 202 and 430).

If the buyer of the first apartment submits a request for VAT refund for a member or members of his/her family household, it is necessary to submit the following:

• proof of kinship and proof that they are members of the household – for children - birth certificate, for spouse - birth certificate and marriage certificate, for parents - birth certificate, not older than six months.
• certificate of citizenship (original),
• certificate of residence from the Police Department for a member of the family household or a certified photocopy of an identity card for all members of the household,
• certificate of the competent municipality, Administration of Public Revenues, local tax administration, that the member of the family household is not subject to tax on the property of natural persons for the period from July 1, 2006, or the certificate of the Tax Administration if the Tax Administration is competent (if the member of the family household has several municipalities of residence, then a certificate from each municipality should be submitted).

The application is submitted in the municipality where the real estate is located.

8.    What is property tax?
You become a property taxpayer when you conclude a contract on purchase/sale, which makes you the owner of the apartment/house. The property tax rate is:

• 0.40% (for real estate value up to 10,000,000),
• RSD 40,000 + 0.6% on the real estate value over RSD 10,000,000 (for real estate value from RSD 10,000,000 to 25,000,000),
• RSD 130,000 + 1% on the real estate value over RSD 25,000,000 (for real estate value from RSD 25,000,000 to 50,000,000),
• RSD 380,000 + 2% on the real estate value over RSD 50,000,000 (for real estate value over RSD 50,000,000).

If the previous owner has outstanding property tax liabilities related to the apartment/house you purchased from him/her, these outstanding liabilities shall not be transferred to you as the new owner, but are still treated as the liabilities of the previous owner.

1.    What is a pre-contract on purchase/sale?
A pre-contract is a contract that entails the obligation to conclude another, main contract or obliges its parties if it contains essential elements of the main contract. A pre-contract, although its name says otherwise, is actually a contract. The buyer and the seller hereby undertake to conclude the (main) contract on purchase/sale. Therefore, the contractual obligation of the contracting parties is to conclude the contract on purchase/sale, and not the handover of things and payment of the price as with the main contract. This means that the conclusion of the main contract fulfils the pre-contract. This obligation to conclude the contract protects the conscientious party from the withdrawal of the other party. The pre-contract on real estate transaction is concluded in writing and can be certified (solemnized) by the competent notary public, by including a solemnization clause.

2.    Is there a mandatory form and content of the pre-contract?
An essential feature of the pre-contract is that it must contain all the essential elements of the main contract on purchase/sale. Also, the pre-contract form follows the form of the contract on purchase/sale. The pre-contract on real estate transaction is concluded in writing and certified by the competent notary public, by including the certification (solemnization) clause. Therefore, if a pre-contract is not certified by the notary public, it does not produce legal effect, which means that the buyer and the seller are not obliged to conclude the main contract.

3.    How much is the purchase deposit?
It is customary for the Buyer to pay 10% of the agreed purchase price as the purchase deposit to the Seller when concluding the pre-contract. As the amount of the purchase deposit is nevertheless a matter of agreement, it may be lower or higher than the stated amount.

4.    What does it mean when a purchase deposit is a withdrawal fee?
When the pre-contract stipulates the right to back off from the conclusion of the main contract, then the purchase deposit is considered as a withdrawal fee and each party may withdraw from the contract. Therefore, when the purchase deposit is contracted as a withdrawal fee, both the buyer and the seller have the right to withdraw from the contract, regardless of the reasons for the withdrawal. In this case, the buyer may withdraw from the contract and thus let the seller have the paid purchase deposit, or the seller may withdraw from the contract, by refunding twice the purchase deposit amount.

5.    When is the purchase deposit returned to the buyer?
If the conclusion of the main contract does not occur on the basis of the pre-contract that has not been certified (solemnized) by the competent notary public/Basic Court, the amount of money given during the preparation of the pre-contract is not considered to be a purchase deposit, but a payment of a part of the purchase price, which is returned in a single amount, according to the rules on unjust enrichment.

• In the event of an amicable termination of the pre-contract
• In case of inability to fulfill the pre-contract due to force majeure
• If both parties are responsible for giving up the fulfillment of the pre-contract

6.    How is the purchase deposit paid – in cash or through an account?
Both methods of payment of the purchase deposit are possible, but in practice, sellers most often ask for payment in cash.

For cash payment, there are legal restrictions on the maximum amount of funds that can be paid in this way. Namely, according to the Law on Prevention of Money Laundering and Terrorist Financing, it is necessary that any cash transaction amounting to EUR 10,000 or more must be executed through the Bank's account. This law is enforced by a notary public because by not accepting to certify the cash payment of a purchase deposit that is greater than EUR 10,000, when certifying the pre-contract.

When paying through an account, we advise you to check the amount of commission that banks charge for this transfer, since these costs are usually borne by the buyer.

7.    Does the purchase deposit represent a down payment for a housing loan?
It is useful to know that, if the purchase price is paid through a loan, the purchase deposit represents a Buyer's down payment or part of the total down payment.

8.    Is it obligatory to give a purchase deposit at the conclusion of the pre-contract?
The current regulation does not provide for such an obligation of the buyer, however, sellers generally insist on it, to make sure that the buyer is serious about buying an apartment/house from him/her. 
From the seller's point of view, there is no reason not to make a purchase deposit, if the buyer intends to buy his/her property, which is the case with “cash” buyers.

However, loan buyers are not sovereign in deciding whether they will eventually buy an apartment/house or not, in fact it all depends on the bank’s decision to approve the loan or not, which any seller, if he is well-intentioned, can understand.
Certainly, the intention of the seller is not to take a purchase deposit and keep his/her real estate, but his/her goal is to sell the real estate, so we advise you to agree with the seller that the purchase deposit should be paid within e.g. 10 working days from the date of conclusion of the pre-contract, in order to obtain the decision of the bank in the meanwhile. Most sellers have no problem waiting 15 days for the purchase deposit. When you receive a positive decision from the bank, then you pay the purchase deposit to the seller, the seller then certifies with the notary public a statement that he/she has received the amount of the purchase deposit or it is included in the contract on purchase/sale that the purchase deposit has been paid.

9.    Should the contract on purchase/sale have a specific form?
A special form is prescribed for the contract on purchase/sale in which it must be concluded – the form of a notarial deed, which is prepared by the notary public who is competent for the administrative area in which the real estate that is the subject of the contract is located.

It often happens that the contracting parties bring to the notary public’s office the already drawn up form of the contract on purchase/sale, mainly when the seller is an investor – a legal entity. In this case, the notary public will not draw up the contract, but will check the submitted form of the contract in detail and certify, i.e. solemnize it, by including a solemnization clause.

Contracts on purchase/sale that have not been concluded in the manner described do not have legal effect.

10.    When do you become a real estate owner?
In order for the buyer to acquire the right of ownership over the real estate that is the subject of the purchase/sale, it is not enough to sign the contract on purchase/sale and certify it with the notary public. Practically, by concluding the contract on purchase/sale and paying the purchase price, the buyer becomes only an unregistered owner of the real estate, but in order to acquire the absolute right of ownership, it is necessary to register the right of ownership in the public registers – Real Estate Cadastre.

However, without a so-called clausula intabulandi it is not possible to transfer ownership over the real estate from the seller to the buyer in the Real Estate Cadastre.

In this regard, it is necessary for the seller to provide the buyer with the so-called clausula intabulandi, i.e. a clause whereby the seller allows the buyer to register as owner in the Real Estate Cadastre of the real estate that is the subject of the contract on purchase/sale without his further consent and presence. 

Clausula intabulandi can be an integral part of the contract, and it can also be given as a separate statement, which is also certified by the competent notary public, which for the contracting parties means that after the certification of the contract on purchase/sale and the payment of the purchase price in the bank, they will return to the notary public, in order for the seller to certify the statement allowing the buyer to register the right of ownership over the purchased real estate.
We advise you to include in the pre-contract and the main contract on purchase/sale, the obligation of the seller to give the clausula intabulandi, after the buyer has paid the price, in order to prevent any misunderstandings and to be able to register your ownership right in the Real Estate Cadastre without any problems.

11.    Does the contract on purchase/sale have to be certified before the disbursement of the housing loan?
Please note that if you finance the purchase of a real estate through a loan, banks generally insist on a certified contract on purchase/sale before the disbursement of the loan. A certified contract on purchase/sale is in this case a requirement for the release of the loan for use, while a pre-contract is a condition for the approval of the loan.

12.    What should loan buyers pay attention to when concluding and certifying the contract on purchase/sale?
When you receive the text of the final contract on purchase/sale for signing from the notary public, be sure to check the data entered, as this can sometimes save you a lot of time and effort needed for correction, for example, of only one number or letter resulting from an unintentional typo. Errors, as in all other transactions, are possible and are corrected by an annex to the contract on purchase/sale. Anyone who had to make corrections to the contract on purchase/sale in the process of registration of their rights on real estate or when taking a housing loan, knows very well what errors mean and how much time and effort it takes to correct them, as well as that errors cause additional costs of certification.

13.    Does the bank determine the content of the contract and pre-contract when the purchase is financed through a housing loan?
Banks usually insist to clearly indicate the part of the purchase price paid by the buyer from own funds (down payment), and part paid from the bank's housing loan, as well as the currency in which the price is paid to the Seller.

In most cases, the banks require to indicate the deadline for the payment of the purchase price, as well as to provide for a reasonable (longer) deadline for the payment of a part of the purchase price from the loan due to the time necessary for processing, approval and disbursement of the loan to the Seller.

Also, banks require that the contract and pre-contract stipulate the obligation of the seller to certify with the notary public a statement containing a clause called clausula intabulandi, after the payment of the purchase price, so that the buyer can be registered as the owner.

Some banks also require a current account of the seller to which a part of the purchase price from the bank's housing loan will be paid.

1.    Do you need to hire a real estate agent – a real estate agency?
The cost of hiring a broker – real estate agency when buying a property is worthwhile, first of all, because of the time you save in searching for a property, as well as for legal certainty, bearing in mind that agents must have passed the professional exam for performing brokerage work. It is true that a notary public checks the complete documentation, which almost eliminates the risks of fraud, but it is a very complicated process because it requires you to go to a notary public for every apartment you are interested in.

Also, it should be borne in mind that experienced agents analyze ads, make it easier to schedule visits to apartments while making schedules in accordance with your obligations.

It is also important to know that real estate agents have to be insured against liability for damage that could occur as a result of non-fulfillment of contractual obligations, even double-insured. In practice, this means that if the agent would cause you damage due to unprofessional check of the ownership records or would not warn you that a mortgage or other encumbrance/right restricting your right to dispose of the property has been registered on the property, you will be able to claim damages.

2.    How do you know if a real estate agency works legally and if agents have passed the professional exam?
All agencies that work legally and all agents who have passed the professional exam are listed in the Register of Brokers. It is a public database of all intermediaries (agencies and agents) in the Republic of Serbia, which can be accessed free of charge on the website of the Ministry of Trade, Tourism and Telecommunications.

3.    What is the brokerage fee (agency commission) and who pays it?
The amount of the brokerage fee is not determined by the Law on Real Estate Sale and Lease Brokerage, but is determined by the brokers according to the market conditions in a particular municipality, and you can see the amount in the General Terms and Conditions of intermediaries. For example, the current market conditions in Belgrade have led to a commission of about 4% of the real estate price, and in Novi Sad, Užice, Kragujevac, Čačak, Niš, for example, about 3%.

The commission is paid by the person who hired the broker to perform the brokerage work for his/her account in the sale or purchase of real estate, on the basis of the concluded brokerage contract. If the same broker performs brokerage for both the buyer and the seller, the broker may, according to the Law, claim only half of the brokerage fee from each party. For example, if the buyer has signed a brokerage contract in which the brokerage fee is defined as 3% of the purchase price, and the seller has signed the same brokerage contract with the same broker, then the broker may, according to the Law, collect only 1.5% from both the buyer and the seller.

4.    Is the brokerage contract certified with a notary public?

No, the contract is concluded in writing after being signed by the contracting parties, or in electronic form in accordance with the law governing electronic commerce.