The small print before you sign...

...reading is one of the most important recommendations for every contract. However, not all contracts are the same.

The right property has been found, the financing is in place and both buyer and seller are in agreement. That's great! Now all that's missing is the contract. But until the final notary appointment, both parties can make various contractual agreements.

This is an option contract that gives the buyer the right to buy the seller's property by a specified date in return for payment of an option sum. The contract is usually drawn up when certain details are still unclear or the bank still needs time to give the green light for the upcoming transfer of the purchase price. The amount of the down payment is usually between 10 and 20 percent of the purchase price. If the purchase does not materialize, the seller retains the option amount. Otherwise, it is offset against the purchase price when the contract is concluded.

This is a special form of option contract. The buyer asks the seller to reserve the property for a few days in return for payment of a small sum. If no private-law purchase or option contract is concluded by then, the buyer retains the reservation sum.

Contrato privado de compraventa

The time has come. All the details have been clarified and the financing is fully secured. In this case, a private purchase agreement is concluded before a notary or lawyer. The content includes the legal description of the property, the determination of the final purchase price, the terms of payment, the determination of the time of fulfillment of the contract and the time of handover of the property.

Which contract is ultimately used should be decided on a case-by-case basis and in consultation with the appointed lawyer. Both buyers and sellers should always have a lawyer experienced in Spanish/Mallorcan real estate law at their side. If you have little or no knowledge of Spanish, you should use German-speaking lawyers or get an experienced translator/interpreter to assist you.

Andreas John