Buying Property in Austria: What You Need to Know Before Signing a Purchase Offer

One of the longest-standing areas of expertise of our company, as well as my previous career in finance, is residential real estate financing in the CEE region, particularly in Austria, together with the complete coordination of the purchase process. Based on the experience gained over nearly 15 years, I would like to share the most important aspects of this process with my readers, so that they can approach the purchase of their new home or investment property with greater confidence and a better understanding of the potential risks.

As with any significant purchase where the final price depends on the agreement between the parties, the key question is negotiation:

• How much can or should one negotiate?
• When is the right time?
• In what form?
• What should one be aware of?

If one wants to express the typical negotiation range in percentage terms, a reduction of approximately 5% to 10% is generally considered common. However, the actual realistic limit can only be determined through a professional bank valuation or an independent property valuation. In individual cases, overpricing of 10% to 30% is not uncommon either, particularly in the case of detached houses. 

If you are already our client, or become our client in the future, we take over the complete coordination from the very beginning and guide you through the entire process to ensure that every step is controlled and as smooth as possible.

Nevertheless, it is always beneficial to understand some of the most important aspects before starting the process.

Let us assume that after a long search, we finally find a suitable property. The location is right, the size meets our expectations, and the price appears attractive as well. The first contact with the seller or the real estate agent takes place, and a viewing appointment is arranged. During the viewing everything seems satisfactory, and we decide that we would like to purchase the selected apartment, house, or plot.

At this point, the seller or real estate agent may inform us that there are other interested buyers as well (whether this is actually the case or not) and suggest that, if we are interested, we should submit a purchase offer (Kaufanbot).

However, there is an important consideration:

If the purchase is not financed entirely with own funds, the bank's credit assessment and the related property valuation still need to be completed.

Even when purchasing with own funds, the actual market value should still be carefully examined based on the information available and the findings from the viewing.

So what should we do – and what should we avoid?

First, we should only request the documents required for a proper evaluation:

• Exposé
• Austrian Land Register extract (Grundbuchauszug)
• Energy Performance Certificate (Energieausweis)
• Floor plans
• Sufficient photographic documentation
• etc.

(During the viewing, avoid showing excessive enthusiasm, as this may give the seller an advantage during price negotiations.)

The most important point:

Do not submit a purchase offer immediately.

At this stage, you still do not know the true value of the property. Therefore, you may easily end up in a situation where even a successfully negotiated price remains too high compared to the actual market value.

First arrange a proper valuation and only submit a Kaufanbot once the result is available.

(For our clients, we arrange this valuation and also provide a financing confirmation.)

A conditional purchase offer should only be considered if it is genuinely necessary and if the circumstances of the transaction justify it. In practice, sellers may be reluctant to accept conditional offers if there is no real competitive situation and they have other interested buyers available. Such an offer may be appropriate when a decision cannot reasonably be delayed even for 1–2 days, for example due to strong competition among potential buyers.

In such cases, it is advisable to clearly state that the offered purchase price is only valid subject to approval by the financing bank or, in the case of investors, by the appointed valuation expert.

However, anyone considering submitting an offer already on the day of the first viewing should be aware of the special withdrawal right provided under Section 30a of the Austrian Consumer Protection Act (KSchG).

This is not a general "one-week cooling-off period".

The withdrawal right under Section 30a KSchG only applies if the consumer makes a contractual declaration aimed at acquiring an apartment, a detached house, or land suitable for the construction of a detached house, and this declaration is made on the same day on which the property was first viewed. An additional requirement is that the acquisition serves to satisfy the urgent housing needs of the consumer or a close family member. This special withdrawal right does not apply to purchases made for investment purposes, holiday properties, or other purposes that do not serve the consumer's own urgent housing needs. In principle, the consumer has one week to withdraw. However, this period only begins once the consumer has received a copy of the contractual declaration and written information regarding the right of withdrawal. In any event, this right expires no later than one month after the date of the first viewing of the property. (Section 30a Austrian Consumer Protection Act – KSchG)

If the conditions for this special withdrawal right are not met, there is no general right to withdraw simply because the buyer later changes their mind.

This must be distinguished from situations where the offer itself contains an appropriately drafted condition – for example, a financing condition –, where the parties have expressly agreed on a withdrawal right, or where another legal basis, such as failure of an essential assumption, misrepresentation, mistake, defective performance, or another breach of contract, may create a legal claim.

The specific legal consequences always depend on the individual circumstances and the content of the agreement.

It is also important to understand that if the transaction has already become legally effective – for example, because the seller has accepted the binding purchase offer within the applicable deadline – and the buyer subsequently fails to complete the transaction for a reason within their own sphere that cannot be legally justified, the real estate agent's commission claim does not automatically disappear.

Under Section 7 of the Austrian Real Estate Brokerage Act (MaklerG), the commission claim generally arises once the mediated transaction has been legally concluded. It only ceases to exist if the transaction is not completed for a reason that is not attributable to the client. Therefore, if an already concluded transaction fails merely because the buyer changes their mind afterwards, the real estate agent's commission may still remain payable in principle. (Section 7 Austrian Real Estate Brokerage Act – MaklerG)

An unjustified withdrawal by the buyer may also have significant legal consequences for the seller. If the buyer fails to fulfil an already concluded agreement for a reason attributable to them, the seller may, under the conditions provided by law, withdraw from the contract pursuant to Sections 920–921 of the Austrian Civil Code (ABGB). Any potential claim for damages arising from the buyer's culpable failure to perform may remain unaffected. However, a claim for damages does not automatically mean that a specific amount can be demanded. The seller must prove the actual damage incurred, the causal connection between the breach of contract and the damage, and that the damage is legally recoverable. Such damage may, for example, arise if the property can only be sold later at a lower price due to the buyer's breach of contract, and the difference between the two purchase prices can be proven to have resulted directly from the buyer's failure to complete the transaction. The general legal basis for damages is Section 1295 of the Austrian Civil Code (ABGB). (Sections 920, 921 and 1295 ABGB)

Important: In the case of a property purchase financed through a bank loan, the credit assessment and the property valuation process in our practice are completed so efficiently that, in the majority of cases, there is no need to submit a conditional offer.

Once an appropriate purchase price has been successfully negotiated based on the principles described above, and both the financing confirmation and, where applicable, the required own funds are secured, attention should be paid to ensuring that the submitted purchase offer is accepted by the authorised person(s) within the relevant deadline and properly confirmed. Otherwise, a situation may arise where the buyer is already bound by their offer during the binding period, while the seller still has time to decide whether to accept it and may continue to keep other interested buyers involved. For this reason, longer deadlines – for example, two weeks – should generally only be used for conditional offers, allowing sufficient time for bank processing even during holiday periods.

Where financing has already been approved or the full purchase price is available, the deadline should generally be kept as short as possible in order to avoid unnecessary competition from other buyers.

Important: An unconditional purchase offer in Austria may become legally binding once accepted by the seller. Therefore, such an offer should only be signed if the required financial resources are fully secured and the relevant circumstances of the property have been thoroughly reviewed.

The Austrian Chamber of Labour (Arbeiterkammer) also expressly points out that a purchase offer is not merely a reservation or a non-binding expression of interest, but may lead to a legally binding obligation once accepted.

Important: Sufficient creditworthiness and available own funds do not automatically mean that a preliminary financing assessment received from a bank will apply to every other property with a similar purchase price.

Since every individual property must undergo its own valuation and review, previously unknown circumstances may always arise which only become apparent during the assessment process and may, in the worst case, result in the property no longer being financeable. Therefore, every new purchase offer must always specifically relate to the actual property being financed and to the persons involved in the transaction. It is equally important that the purchase offer contains all relevant circumstances and agreements. If the seller fails to disclose a material fact, this may form the basis for various claims by the buyer, including, depending on the circumstances, the possibility of challenging the agreement or seeking legal grounds to withdraw from it. However, this is not automatic and always depends on the specific facts of the individual case.

This is particularly relevant in the case of rural detached houses, plots of land, or apartments with associated land areas, where easements and other property-related obligations may play an important role. Although these matters should normally be identified during a proper due diligence process, it is advisable to ask about them specifically at an early stage. For apartments, the same applies to planned renovation projects, already approved refurbishment measures, or existing renovation loans of the owners' association. I will address the risks associated with these issues in more detail in a separate article.

Although the entire process – as outlined above – may involve various hidden risks, fortunately these situations are not the norm. Nevertheless, due to the financial significance of such transactions, buyers should not approach the process without appropriate caution. Having encountered a wide range of situations during the past nearly 15 years, my aim is simply to encourage those who do not yet have sufficient experience with such transactions to proceed with the necessary awareness and preparation.

For our clients, we take over the complete coordination of the entire process: from the initial consultation before the property viewing through to the completion of the registration of ownership in the Austrian Land Register (Grundbuch) and the delivery of the final land register extract.

To achieve the desired outcome safely and professionally, we cooperate with several banks and experienced law firms. This ensures that the purchase process and financing are properly coordinated, implemented as securely as possible, and that acquiring a new home remains a positive and rewarding experience. This service is provided completely free of charge for our financing clients.

The information provided above is intended solely as general guidance and does not replace an individual assessment of each specific case.

If the purchase of your new property is already approaching a concrete stage, I would be happy to provide a personal assessment and support you throughout the entire process.

Kind regards,

Csongor Laszlovari-Thoma

info@laszlovari.at
+43 660 7701000
www.laszlovari.at

Further details and additional video content can also be found under the following menu section: