The Property Banks Buyers Guide to Iceland
Based on a Property of 157.130
Procedure 1.
The buyer obtains a non-encumbrance certificate from the Land
Registry
Time to complete: 1 day
Cost to complete: ISK 1,000 each certificate if completed at the
Magistrates office
Comment: The buyer would usually demand to receive a certificate of
mortgages and other possible rights and obligations in relation to
the property. Anyone can request a certificate in paper. It costs
ISK 1.000 and is takes one visit to the District Magistrate (Land
Registry).
Real-estate agencies have on-line access to this information (Landskra
Fasteigna) at a cost of ISK 550 per certificate. Landskra Fasteigna
is a data and information system operated by real estate valuation
authorities.
Procedure 2.
Authorized real estate agent prepares and executes the Sale-Purchase
Agreement
Time to complete: 1-2 days
Cost to complete: 1.5-2.5% of property value (real estate agent
fees)
Comment: An authorized real estate agent prepares and executes the
sale purchase agreement.
It is not mandatory to use an authorized real estate agent, but it
is almost an absolute praxis. His fees will be around 1.5% and 2.5%
of the property value.
The seller-purchaser agreement is usually registered at the District
Magistrate if the property is not paid in full at the time of the
agreement. The deed is first signed when the property is paid in
full. Registration of the seller-purchaser agreement protects the
rights of the purchaser. The total extra cost of registering the
seller-purchaser agreement is ISK 1.350. The process takes about 2
days. In this case there is no need to register the seller-purchaser
agreement and it is in any case not a formal requirement.
The conditions for registry of the sale purchase agreement are that
it contains the following information: the name of the property as
officially registered by the municipal authorities, unique property
reference number of the land and the property, the legal description
set forth by the planning and building authorities and the land and
the building's number which has direct reference to it's plots. This
information can be obtained from the magistrate office in the
property's district or from Landskra fasteigna (cadastre). If an
authorized real estate agent handles the sale this information is
available to him via an electronic data and information system.
It is common that the buyer notifies the insurance company.
Insurance companies have electronic access to the data base at the
Real Estate Valuation Authorities and there is a daily processing of
the title of transfers. The title of the fire-insurance changes the
same day as the transfer of title is registered.
Procedure 3.
Transfer of title is prepared and registered at the Magistrates
office
Time to complete: 1-2 days
Cost to complete: ISK 1,350 + 0.4% of the official real estate
valuation (usually lower than purchase price) for Stamp Duty
Comment: When the buyer has fulfilled his obligations in relation to
the sale purchase agreement and the conditions for registrations,
the transfer of title is prepared and registered at the Magistrates
office.
The deed shall be delivered in two signed copies (including one copy
on a special accredited paper).
The documentation shall include:
The deed signed by the seller and the purchaser and certified by a
notary public, or an attorney, or a certified real-estate agent. In
practice a notary public is hardly ever used.