Have you ever wondered what the real estate process around the world is? We did, and researched different countries around the globe. What we found were some striking similarities to how we go about buying property in the USA, but some big differences.
What we’ll be talking about.
For each country, we will outline and explain what we found about their real estate processes. Next, we’ll talk about who requires a title search and tackle the issue of title insurance. We’ll conclude with a summary of what we learned.
Countries
United States
United Kingdom (England and Wales)
Sweden
Brazil
Canada
Japan
Title Issues
What about a title search?
What about title insurance?
Real Estate Around the World: The United States’ Process
Below is a basic overview of how the real estate process works in the United States. For many people, it starts with a trip to the bank for a loan pre-approval, and then ends with getting the keys to a new home.
The Steps
Finding a Home
The first step for many people is to get a mortgage pre-approval. It will determine how much you can borrow to purchase a property, and allow your lender to get a glimpse of your credit history.
Generally, the home search starts once you know how much you can afford. A lot of people start online. This is also the step where you find a real estate agent to work with.
You make an offer when you find a property. The offer would include the proposed purchase price, other conditions, and a proposed closing date.
Heading Towards Settlement
Next, comes the negotiations. A seller may propose to accept, counter, or decline your offer. The terms of the sale are then agreed upon if your offer is accepted.
You will need to get a home inspection. This is conducted by a professional inspector who will identify any issues that may need to be addressed with the property.
Now, you’ll need a settlement company to conduct this next step. You will need a title search and title insurance. That’s what we do! The title search will look for and anything that may challenge or encumber the title to the property. Title insurance will protect you if there are any claims, and is also required by the lender.
Your lender will appraise your property next to make sure that the property’s value aligns with the amount being borrowed.
Finalizing the Transaction
Next up, closing day! You’ll sign all the necessary paperwork to transfer the property from the seller to you. You will receive the keys to your new property at this time!
Finally, your new deed and other documents will be filed in the appropriate county offices for recording purposes. Your originals should be returned to you at some point.
Real Estate Around the World: The Process in the United Kingdom (England and Wales)
Next, look at the real estate process in the United Kingdom (England and Wales). You may see similarities to the US’s procedures, but there are some stark differences.
The Steps
Finding a Home
Firstly, prospective buyers start looking for properties. Sometimes they use a real estate agent, and sometimes they don’t.
Next, buyers make an offer. If the seller accepts the offer, the transaction progresses.
Heading Towards Settlement
Conveyancing comes next! Conveyancing is the legal process of transferring the property ownership. A solicitor or a licensed professional takes care of the process, who will then search for any potential legal issues with the property.
At this point, a survey may or may not be done to assess the condition of the property itself. This is not a required step, but there are different types of surveys available for prospective buyers to get.
Next up, buyers need to get a mortgage approval. Banks will assess the value of the property before issuing approval.
Finalizing the Transaction
Here, the buyer and seller will exchange contracts once all the above steps are completed. At this stage, both parties are LEGALLY BOUND to the transaction, and a deposit is paid by the buyer.
Finally, and on the agreed date, the property is transferred to the buyer! The buyers gets the keys once the rest of the balance is paid.
Real Estate Around the World: Sweden’s Process
Sweden is a Scandinavian country located in northern Europe, and, of course, has its own structured steps when it comes to real estate transactions. The real estate process is typically handled in Sweden is handled in a very orderly manner.
Sweden’s real estate process is strict. Take note of the similarities between the process in the United States and this country.
The Steps
Finding A Home
Of course, the first step is to find a property, and many people do this online, through classified newspaper ads, and with the help of a real estate agent.
When someone finds a property they want to buy, an offer is made, either directly to the seller or with the help of a real estate agent. Both parties will then negotiate until they agree upon a price.
Heading Towards Settlement
Next, a preliminary contract (Preliminär Köpeöverenskommelse) is signed by both parties. Everything concerning items to the conditions of the sale to the purchase price is covered in this document. Both parties sign the contract and a deposit is paid by the buyer.
At this point, a title search (Fastighetsöverlåtelse) is conducted to ensure the ownership of the property, as well as look for things like easements and restrictions. Either a solicitor or conveyancer for representing the buyers performs the search.
Finalizing the Transaction
A formal contract (Köpebrev) is drawn up once the title search has been completed and everyone involved is satisfied with the conditions of the sale. Once the contract is signed by both parties, it becomes legally binding.
Finally, it’s time for the transfer of ownership (Överlåtelse av Fastighet)! Both parties meet on the closing date specified in the formal contract. The remaining balance is paid by the buyer, and the property is considered transferred!
Be sure to compare Brazil’s real estate process to the other countries we’ve covered so far.
The Steps
Finding A Home
Firstly, of course, a prospective buyer needs to find a property, usually online, through a real estate agent, or in a classified ad.
Secondly, once a buyer has found a property, they negotiate the terms of the sale, purchase price, payment terms, and conditions with the seller.
Heading Toward Settlement
Thirdly, a preliminary agreement (Contrato de Promessa de Compra e Venda) is signed by both parties. Everything that was agreed upon during negotiations is included in this document. A deposit of ten percent of the purchase price is generally paid here by the buyer.
Fourthly, a title search (Pesquisa de Matrícula) is done to verify ownership status, any liens, or legal issues that may affect the property. Generally, a lawyer or a specialized company may perform the title search.
Finalizing the Transaction
Next, it’s time for closing (Escritura de Compra e Venda) on the day specified in the preliminary agreement at a notary’s office to sign the deed of sale (escritura de compra e venda). The buyer pays the remaining and balance, and the property is transferred.
Finally, the deed of sale is registered, along with other documents, in the local land registry office (cartório de registro de imóveis) to serve as official proof of transfer.
Keep in mind, though, this process still may vary from province to province.
The Steps
Finding A Home
To start, Canadian buyers search for properties either online, through a real estate agent, or in ads, and may attend open houses to look at properties, too.
Next, Canadian buyers will make an offer on a property they are interested in. The buyer’s real estate agent will present the seller with different details concerning the offer, like the purchase price, closing date, and other conditions.
Heading Towards Settlement
Here, the seller will either accept the offer, reject, or may counter one. Both parties will negotiate until there is an agreement on the terms.
An home inspector will then physically inspect a property for structural issues or safety concerns. Sometimes, an inspection report may affect the purchase price.
Once the inspection is done, the buyer will finalize mortgage financing through their lending institution.
Up next, a title search is done to verify ownership, legal description, and things like easements. This search is done to verify the seller has the right to sell the property and that there are no defects on title, too.
Finalizing the Transaction
Finally, it’s closing day! On the day specified in the purchase agreement, the remaining balance is paid, and the property is considered transferred.
As a note, the sale is also registered in the local land registry office.
Real Estate Around the World: How it Works in Japan
Below are steps to compare to the other countries we’ve covered in the blog post.
The Steps
Finding a Home
It should come as no surprise now that Japanese buyers search for properties the same way their Western counterparts do; they find properties through real estate agents, online, and through ads.
Japanese buyers and sellers negotiation purchase prices. Other terms are determined at this time, too.
Next, a purchase agreement (chukai sho) is signed by both parties outlining the terms that were agreed upon.
A deposit (shikikin) of ten percent of the purchase price of the property is paid by the buyer and is generally held in escrow.
At this point, a title search (jyudaku) is done to verify ownership of the property and to look for any liens or legal issues that may be associated with the property. Usually, a real estate attorney or a specialized company takes care of the search.
Heading Towards Settlement
Finally, it’s closing day! On the specified day, the parties meet to finalize the sale. The buyer pays the remaining balance of the purchase price, and the ownership of the property is transferred.
The appropriate local government office will register the deed (shoyu).
What About Getting A Title Search?
Most countries that we looked at here in our comparison of the real estate process around the world do require some sort of title search or survey. Also, the title search step does come up in a different order in other countries than it does in the United States.
So, yes, other countries generally take the steps to ensure that the title to property is free and clear. It is also evident that many also take the steps to record the new sale in some sort of records repository in the correct jurisdiction.
What About Title Insurance?
Many countries do not require title insurance as a part of the real estate process. The only two countries examined here that recommend title insurance are the United States and Canada.
All the countries presented DO have the option to purchase title insurance. The title search is generally enough to show that there are no problems with the property. Still, a buyer in the United Kingdom may want to buy title insurance for extra peace of mind.
When it comes to other countries in our study, there are different reasons why there is no title insurance. Along with Sweden’s strict land recording laws, title is rigorously searched and provides the security buyers need. Brazil also stands by title searches for legal diligence, but some insurance companies in Brazil do offer title insurance as an optional purchase. Japan has a similar practice to Brazil’s.
Conclusion
Many countries around the world have real estate processes that have similarities and differences to us here in the United States. The order may be different for some countries, but it is interesting to see how each country handles the real estate process.
Also, title searches are common, though title insurance is not. Still, we here at Landmark Abstract are here for all your title insurance and real estate transaction needs. Call us for more information!!
Disclaimer: This article was researched with the assistance of AI, and was fact-checked, written, and edited by the author.
