The average delay between accepting an offer and completing the purchase of a property in the UK is supposed to be three months. My colleague Lua was in China recently buying properties for me. On one occasion she made an offer for a property on Thursday, and by Sunday the property was not only sold to me, but was already rented out and generating income.
The market in China is quite amazing. Properties stay on the market for a matter of days. The whole process of transfer of title takes only weeks. The buyer is required to pay a deposit - say 10% - to the estate agent. The balance of the purchase price is due within weeks. If this is not forthcoming the deposit is lost. The estate agent is responsible for the whole process of registering the transfer with the appropriate government department. It also acts as an escrow agent, and accounts for any taxes payable, although the buyer must keep receipts for the taxes that have been paid or there can be problems when it comes to sell the property again.
Amazingly, estate agents in China will provide bridging financing for the buyer, especially one which has proved a reliable customer in the past.
Unlike in the UK, the buyer pays the estate agent's fees. Of course, estate agents' fees in the UK are borne by the buyer. They are only formally paid by the seller. Having the buyer pay the fees is quite an advantage, because the buyer can negotiate the fees as well as the sale price. Fees can be up to 3%, but these cover all legal expenses and mortgage arrangement fees. We have been successful in negotiating a rather better deal than this, but of course we are not in a position to obtain financing in China.
