Buying property in Spain (The purchase contract)

The private purchase/sale contract or the purchase option contract is generally signed within two weeks or a month following the down-payment, and usually entails a payment of 10 % of the purchase price where the owner is an individual, and between 25 % and 40 % if the property is a new build or acquired off-plan from a property developer. The deposit that has already been paid as a down-payment is normally included in that percentage.

The contract will include the details of the agreements reached between the parties and the conditions of the purchase/sale, even though some may be overlooked as they are merely an obligation in line with current Spanish law.

At this point, it is very important that the clients notify us of any commitment or condition that they may have agreed with the seller or their representatives, or with the estate agents, so that this may be reflected in the document. Once the contract has been signed, both parties are under obligation to respect the contract in the agreed terms and conditions.

In the case of purchasing a home that is under construction, other intermediate payments are usually made between signing the contract and signing the deed, which generally coincide with certain phases of the building work. Our firm will take charge of managing those payments on your behalf and will request the relevant guarantees from the developer. It is worth remembering that, in Spain, property developers and builders that receive down-payments for homes under construction are obliged by law to guarantee the amounts received up until the work has been completed, by means of a bank guarantee or insurance policy. In this way, in the event that the building works are not completed, the purchasers will recover all the money they have invested, plus the statutory interest.

Next: Obtaining a NIE (Foreigner’s Identification Number)Previous: Survey of the property and negotiation of the contract

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