Paying deposit

[MadameButterfly]

Hi,

My partner and I want to buy a property in Spain but we are unsure about how to pay for the deposit. We are buying directly from the owner so no estate agent or lawyers are involved. I'm spanish so I know how this all works and I know the contract we have to sign, but in the past I've always done this in person (both parts signing when the money is handed over) and now being abroad I'm not sure if it's possible/safe.

Can anyone let me know if you've done this? Of course we will go to spain to sign the deeds when we buy the property, but for the deposit I'd rather not go if it's possible to do it from here.

Thanks!

 

[Andrew Quirk]

Hi there, I have been in the industry for over 12 years now and I have to say that I wouldn't recommend not a lawyer for a property purchase in Spain... I understand not using the agent however it would be much safer for yourselves to use a lawyer to run all the property checks etc and then you could also ask this lawyer to receive the deposit and hold it until notary.... I think for the cost of a lawyer it would be a brilliant idea to protect yourselves.

Regards

Andy

 

[Acreixell]

Hello MadameButterfly,

The downpayment contract in Spain is called "Contrato de Arras".

Normally it's a 10-20% downpayment and the conditions are as following: when you set "Contrato de Arras" is compulsory for the seller and the buyer to finish the transaction. In case that the contract is broken, the person that broke the deal should refund the money. If it's the seller, the one that broke the contract, should pay double.

For example: 100k for a property. Contrato de arras for 10k.

Seller: if finally he doesn't sell the property, he need refund 20k to the buyer.

Buyer: if finally he doesn't buy he losts the downpayment.

 

[Longterminvestor]

I assume these funds will be held in some kind of escrow account? I also think not using the services of a local lawyer could be risky.

 

[Acreixell]

No, they are held by the seller. This kind of contract is always used in any RE transaction and it has legal validity in front of any tribunal.

But for instance, the deposit for renting a property is held by a public entity until the end of the contract.

As @Longterminvestor said, is better to hire a lawyer.