The two most important contracts in the context of a real estate transaction. These are the main differences between these two real estate documents
Two main documents are often drawn up when buying a property: the purchase contract and the mortgage deed. Both documents have different functions and are essential to the process of purchasing a property.
What are deeds?
Documents are legal documents that are signed by a notary to confirm the legality of an act. When buying real estate, both the seller and the buyer as well as the notary must sign the deeds, which makes them legally valid.
The deed of sale:
This deed documents the transfer of ownership from a seller to a buyer. It confirms that the property has been sold, is free of encumbrances and occupants and that both parties are willing to fulfill the terms of the contract. The deed is entered in the land registry and secures legal ownership of the property.
The mortgage deed:
This deed is a contract between the bank and the client that sets out the terms and clauses of the mortgage loan, including the loan capital, interest, repayment terms and the property as security. The notary must explain the clauses of the contract to the client and provide his signature.
Order of signing:
The deed of sale must be signed first, as you must first be the owner of the house before you can encumber it with a mortgage. The deed of sale should include a clause stating that payment is subject to the approval of the mortgage.
Retention of the deeds:
The original purchase contract is usually kept by the new owner, while the bank keeps the mortgage deed. The customer receives a copy of the mortgage deed for inspection and verification of the conditions.
