The Technical Side of a Real Estate Transaction: What Should Be Checked Before Going to the Notary?

Watching the real estate market, I often see how the main focus shifts to emotion. People talk about the view, the layout, and whether the kitchen island fits in the room. That is understandable – a home is an emotional purchase. But my job is to keep emotions and the technical side separate. When the transaction reaches the notary, fresh paint on the wall no longer matters. What matters is what is written on paper.

Over the years I have seen dozens of situations where an apparently simple transaction gets stuck because of inadequate preparation or legal nuances. A real estate transaction is a process where, in practice, there is no room for error. I will point out the most important technical stages and documents that determine whether your transaction is safe or risky.

Contract under the Law of Obligations (VÕL), i.e. a preliminary sales agreement

Many clients ask why they need to go to the notary twice. Especially in the case of new developments, the contract under the Law of Obligations (VÕL) is the first sense of security. It is an agreement where the seller promises to sell and the buyer promises to buy.

• Booking fee and down payment. Usually, 10–20% of the purchase price is paid when the VÕL is signed. It is important to ensure that this amount goes through the notary's escrow account or is clearly regulated in the contract.

• Term and conditions. The contract states the exact date on which the real rights agreement, i.e. the transfer of ownership, must take place. If you are the buyer, you must make sure that your loan decision covers this period.

• Penalty clauses. If one party backs out, penalties apply. This is where I would never recommend making concessions at the expense of "reliability" – the contract must protect both parties equally.

Mortgages and the role of the bank

If a bank loan is used for the purchase, a mortgage comes into play. Technically speaking, it is the bank's guarantee. If the property being sold already has an old mortgage on it (the seller's loan), then it must either be removed or transferred during the transaction.

In practice, this means logistical precision. The notary communicates with the bank, the bank sends a power of attorney and prepares the annexes to the loan agreement. One thing many people forget: the valuation report ordered by the bank must be recent. If the valuation is delayed, the entire notary transaction is postponed. My role here is to make sure that the valuer, the loan officer, and the notary speak the same language and that deadlines are met.

Real rights agreement and transfer of ownership

This is the moment when the owner changes in the land register. Here the critical point is the handover of possession.

I have seen situations where the real rights agreement is signed today, but the keys are promised to be handed over "next week". My recommendation, which I would also give to my best friend: all agreements regarding the handover of possession, furniture left in the apartment, and payment of utility costs must be in writing and be part of the contract. If it is only spoken, it does not legally exist.

Technical inspection and documents

Before going to the notary, the technical side must be in order. It is not only the realtor's, but also the buyer's responsibility to check:

1. Use permit. Does the building have a use permit or usage data? This is now the be-all and end-all for banks.

2. Extract from the building register. Does the actual layout match what is in the register? Illegal alterations (removed load-bearing walls, enlarged balconies) are the biggest deal-breakers in transactions.

3. Energy efficiency. The energy class is not just a letter on paper – it determines your monthly costs and often also the loan interest rate.

A practical example from my experience

Some time ago I had a transaction where the buyer wanted to purchase an apartment in an older building in Tallinn. On the surface, everything was correct until I dug into the apartment association documents and the building register. It turned out that an extension to the attic made by the previous owner had indeed been "agreed with the neighbors", but had not been legally formalized – there was no notarial agreement on the right of use and the changes were not entered in the land register.

If we had gone into the transaction without fixing this, the buyer would have remained responsible for the illegal construction and the bank financing could have fallen through at the very last moment. We postponed the transaction by three months, prepared the necessary paperwork, and the transaction was completed with a clear conscience. That is the basis of a long-term relationship – I do not want my client to receive a letter from a lawyer a year later.

Summary

Real estate purchase and sale is a legal process packaged in a beautiful listing. If you dig into the numbers and the documentation right from the start, you save yourself from later disputes.

The honest answer is that proper preparation takes time. If someone offers you a "quick transaction" without checking the documents, that is a warning sign. In real estate, correctness pays.

If you have a transaction planned that seems technically complicated – whether it is a tangle of mortgages, setting up the right of use, or an unfinished development – then get in touch. Let us discuss it calmly and make sure the paperwork matches reality.

Laur Teppan | Co-founder and partner | laur.teppan@ellix.ee | +372 5682 2666