Reservation Agreements in Swiss Real Estate

What a reservation agreement is

A reservation agreement is a private written agreement — not a notarial deed — that records the agreed purchase price, the property description, the conditions of sale and the intended timeline for signing the notarial deed. It is typically accompanied by a deposit of 10 percent of the purchase price, paid by the buyer to the seller or to the notary's escrow account.

The reservation agreement signals serious intent from both parties and provides a degree of security during the period between offer acceptance and the signing of the notarial deed. It is a common step in Swiss property transactions, though not legally required.

What it covers

A well-drafted reservation agreement covers: the agreed purchase price; the property description (address, land register reference, area); the conditions of sale (any financing or due diligence conditions); the deposit amount and the conditions under which it is refundable; the intended date for signing the notarial deed; and any special provisions agreed between the parties (items included in the sale, renovation works to be completed before handover, etc.).

The agreement should be reviewed by a lawyer or the notary before signing. Buyers should pay particular attention to the conditions under which the deposit is refundable — if the buyer withdraws without a valid reason, the deposit may be forfeited.

What it does not guarantee

A reservation agreement is not a notarial deed and does not transfer ownership. It does not guarantee that the transaction will complete — either party can withdraw, though doing so may have financial consequences. The seller can still receive and consider other offers, though reputable sellers will not do so after signing a reservation agreement.

The reservation agreement also does not protect the buyer against changes in the property's legal status between signing the agreement and signing the deed. Buyers should ensure that the notary conducts a final land register check immediately before the deed is signed.

The deposit

The deposit (typically 10 percent of the purchase price) is a significant financial commitment. Buyers should ensure they have the funds available before signing the reservation agreement. The deposit is typically held in the notary's escrow account until completion, at which point it is applied against the purchase price.

If the buyer withdraws without a valid reason (i.e., not due to a failed financing condition or a material defect discovered during due diligence), the deposit may be forfeited. If the seller withdraws, the deposit is typically returned to the buyer, and the seller may be liable for damages.

Key points

• Private agreement recording agreed terms — not a notarial deed, not a transfer of ownership
• Typically accompanied by 10% deposit held in notary's escrow
• Covers: price, property description, conditions, timeline, special provisions
• Does not guarantee completion — either party can withdraw (with financial consequences)
• Deposit may be forfeited if buyer withdraws without a valid reason