There are certain beliefs about the sales contract that are not true or are not clear. In this article we will try to clarify those that are.
The purchase agreement is a legal document that includes all the terms of agreement between the buyers and sellers: - property data , price , date of signature at the notary.... . Although the signature of this document is not mandatory for the completion of the operation, here at Cómpeta Properties we recommend that it be done so that all the conditions of the sale are reflected in writing.
This contract is usually signed app. 1 month after the reservation fee and at the time of signing 10% of the total purchase price is paid.
01 Sales contract: Legal validity.
A Legally valid
The sales contract is a legally valid document which is signed by both buyer and seller and requires them to fulfill the mentioned obligations.
In the event that any one of the the parties can not be present at the time of signing the sales contract it can also be signed by their legal representative if they have previously obtained a power of attorney.
02 Sales contract: Insufficent to mortgage or register.
Although the sales contract is a legal document , it does not adjudicate the ownership and title to the property. Because of this it cannot be used to obtain a mortgage or register the property.
A Impossible to register with a sales contract
The property can only be registered in the new owners name after the signing of the title deed in the notary. The sales contract does not give a right to register.
B Impossible to mortgage with a sales contract.
Although the preliminary study by the bank is usually made during the time of paying the reservation fee and the signing of the sales contract, the signing of this does not mean that your mortgage will commence. The bank will only authorise the mortgage at the signing of the title deed in the notaries.
03 Sales contract: The dangers of a standard contract
There are no two sales identical, nor two houses or two buyers. Because of this a standard contract is not a option you should contemplate.
A Not all sales are identical.
i. Each sales operation is different. Cada operación de compraventa es diferente. The deadlines established for payments and signing are agreed between the parties, some owners have to update their documentation so that all is in order on the day of completion in front of the notary. Due to this a perfect contract which would be valid for every sale simply does not exist.
04 Sales contract: Who draws it up.
Although there is no restriction in respect of who draws up the sales contract , it is recommended that it is done by a lawyer or legal representative who specialises in conveyancing.
A A lawyer or qualified legal representative.
R26; Because it is complex.
The sales contract is quite complex as it is personalized according to each sale. Generally , the sales contract involves the payment of 10% of the sales price and in some cases replaces the reservation contract. It must be noted that if the seller does not complete the sales operation they are liable to return to the buyer twice the amount paid in this contract. If the buyer does not complete the sale they will lose the amount paid up to then.
R26; Because all the conditions be shown in the sales contract.
The sales contract must reflect all our conditions of sale and purchase (both vendor and buyer) and these conditions should be specificied exactly so there is no room for misinterpretation.
R26; Because it has to conform to the law.
As we mentioned before, the sales contract is a legally binding document and it is precisely because of this that although it is personalized it must comply with all laws and regulations that are in force.
The correct and scrupulous drafting of the sales contract will prevent us from having any future problems; either at the time of sale or during the process of the sale.
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