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THE PURCHASING PROCESS
The Reservasion Contract and deposit
Once your estate agent and lawyer have discussed the purchasing terms and conditions with the seller and an agreement have been reached, the next step is to formalise this verbal understanding through a written contract. This document is known as the Reservation Contract (Contrato de Reserva) and should be signed by both you or your representative and the seller. It might also include details about payment terms, estimated dates for exchange of contracts and completion. If both parties accept the terms in the contract a binding agreement is created. It is standard practice in Spain for this Reservation Contract to be accompanied by a sum of money which is paid by the buyer to demonstrate to the seller that there is a real intention to purchase. This money is known as a Reservation Deposit (Señal de Reserva) and usually amounts from €3,000.
Once this deposit has been paid, the property is taken off the market and the price is frozen for a specified period of time.
It is very important to remember that this deposit is usually non-refundable. In other words, if you do not exercise the purchase within the period of time established in the Reservation Contract the seller is under no obligation to return your money. However, if the seller backs out of the deal he will have to return your deposit.
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