Down payment with provisional purchase agreement
The down payment is a fixed element in the purchase agreement in Spain. But how high is that down payment and to whom do I pay?
The moment there is agreement about the purchase, a provisional purchase agreement will be drawn up. One of the most important elements in the purchase agreement is the down payment.
No contract without a deposit
A provisional purchase agreement will always be drawn up in such a way that a first payment must be made before a certain date. It will also be included that if the buyer does not make the down payment on time, the provisional purchase agreement has no value.
And in that case the seller can freely dispose of the house again, without the prospective buyer being able to claim anything.
Amount is negotiable
The amount of the deposit was always set at 10% in the past. In recent years it is very common that you negotiate a lower amount, especially if the purchase price is high and 10% therefore becomes an excessively large amount.
Who to pay to?
Note to whom you will make the first payment. The seller will always endeavor to receive the deposit directly into his bank account. In most cases that will not be a problem. But if you have any doubt about the seller's financial situation, do not choose to make the payment directly to the seller. In that case, you would do better to find a different solution. Often the down payment is then deposited into the office of the selling agent. He then acts as the depositary and ensures that the money reaches the seller on the day of the transfer at the notary.
Don't pay too fast
Never make a first payment before you are sure that the property you are going to buy is 100% in order. Once you have made a payment, and afterwards a closer inspection reveals something so that you no longer want to buy, you will have a big problem trying to get the first payment back, especially if this first payment is already in the bank account of the selling party. If you cancel the purchase for legitimate reasons, the first payment may be better with the selling agent.
When in doubt