Sunday, July 13, 2014

Real estate offer agreements in Spain

If you want to make an official offer on a house or apartment in Spain, in some cases the real estate agent will ask you to put down a deposit, together with signing an agreement that if the seller accepts your offer, you will lose your deposit if you back out.

Problem is these contracts tend to be very badly written and can lead to real problems if things don’t work out. Especially important is who is going to return your money if things don’t work out.

The important points of the contract are what happens in each of these cases:

  • If the seller does not accept the offer in writing within a short time period (48 hours), the real estate agent should return your deposit immediately.
  • If the seller accepts your offer, but then backs out, the real estate agent should to return double your deposit. Since the offer contract is only signed by the real estate agent and you, the agent can’t really legally commit the seller to pay anything, since the seller isn’t signing the contract. (The real estate agent might have a contract with the seller, but that’s not your problem)
  • Will this fee will be credited towards the purchase price as part of the agreement? Sometimes it is assumed that this is a commission for the real estate agent, so be careful.

Alternatively, you could just look for a deal where you deal directly with the seller. In that case, don’t sign any agreement except the final one at the notary. In the past, people usually signed “arras” pre-sale agreements, but these can also be minefields (more on that later), so avoid them if at all possible.

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