Purchasing real estate in Spain can be a sensitive process. After deciding on a property, the next step is to reserve it and sign a preliminary agreement known as the Contrato de Arras, confirming your intention to proceed with the sale. To ensure everything goes smoothly, the legal experts at Serviciosdextranjeria conduct a thorough review of the property’s physical and legal status. We assist with drafting the down payment agreement and handling the deposit process. Our team is available to address any questions or concerns related to property purchases in Spain.

What is the Earnest Money Contract?

The Contrato de Arras, or down payment agreement, is a binding document between buyer and seller. It provides mutual protection, ensuring the seller cannot offer the property to others during the contract period, and offering the seller assurance of the buyer’s commitment. The contract includes penalties to discourage either party from backing out.

General Terms of the Arras Contract

While the specifics can vary based on individual agreements, most down payment contracts in Madrid follow this general structure:

Down Payment Amount: This is determined by mutual agreement among the buyer, seller, and their legal representatives. Typically, it’s 10% of the total property price, though this can be negotiated.

Penalty Clause: If the buyer decides not to proceed, the seller keeps the deposit. If the seller cancels or sells to another party, they must return double the deposit to the buyer.

Before signing the Deposit Contract

It’s essential to confirm that the property is in good physical condition and legally unencumbered before signing the agreement. Once signed, you are legally bound to complete the purchase or face the penalties outlined in the contract.

After signing the Deposit Contract

Once the agreement is signed by both parties, the buyer must transfer the deposit to the seller or their representative. Ownership remains with the seller until the notary signs the deed of sale and the remaining balance is paid, at which point the property title is officially transferred.

Signing the Arras Contract is a crucial step in the Spanish property buying process. It helps secure the transaction by preventing the sale to other parties and includes strong penalties to ensure compliance. Serviciosdextranjeria experienced real estate lawyers are available to assist with drafting the contract and providing support throughout the purchase process. Feel free to reach out to us for professional assistance.