Buying a property in Barcelona is the dream of many people. Some of you work, struggle and save money for this purpose. Finally, you like a place and decide to buy it. At this time, real estate agents offer you to sign a reservation agreement. But, is the reservation contract in Barcelona sufficient to allocate the property? Read our article and have detailed information about this complicated subject in 8 questions.
1) Does Reservation Agreement mean ‘only you’ can buy this property?
You would expect a contract with the word ‘reservation’ in its name to reserve what you’re getting, right? Actually, not. The ‘reservation agreement’ does not secure the flat for you. It does not take the flat off the market, and it does not bind the seller in any way. The reserve is incorrectly titled and very confusing.
💡Keep in mind: The Reservation contract in Barcelona does not imply a contract of sale. It is just one of the necessary steps for that.
2) Why we need a reservation contract in Barcelona?
Because real estate agents want to see your offer in writing to be sure you’re serious about buying. On it, you write your offer and pay a deposit of approximately 1% of the purchase price.
The seller has about seven days to accept or reject your offer. If they accept it, you proceed with the purchase, and the deposit should go towards the purchase price. If they reject it, they should return your deposit. The contract clauses control all this in the reservation contract in Barcelona. Be sure to read it carefully before signing. If you read your contract in detail and make the necessary additions, you will avoid unnecessary payments.
Furthermore, you should not confuse reservation contract with arras contract. When purchasing a flat, initially sign a reservation contract whose purpose is to avoid a new buyer appearing in exchange for a small sum of money. After this, the “arras” contract is signed that is s a deposit made to a seller representing a buyer’s good faith to buy a home.
3) Will I pay for agent’s fee?
In Spain, the seller pays the agent. However, some (Tecnocasa) also charge the buyer. So if the seller rejects your offer, the agent might keep your deposit as their fee. Their fee is NOT in the listed price. So before you sign the reservation contract in Barcelona, read it to be sure or propose a clause: “The Agent is not charging the Buyer anything in this transaction.” The seller is already paying the agent 3% to 7% of the purchase price.
4) Is the property is ‘blocked’ for me with a reservation agreement?
No, the seller/agent does not have to block the property for you. They may continue showing the property and even use your offer to get a higher bid. It’s legal. To secure the property, you must put a clause on your reservation agreement that says: “Upon signing this reserve, the Seller will take the property off the market and reserve it in the Buyer’s name.” If you add this clause to the reserve contract, the property will now be private to you for a while.
5) Is it compulsory to sign a reservation contract in Barcelona?
If the seller accepts your offer, you must buy the property or lose the deposit. They usually want a 10% non-refundable deposit within 7-10 days. Thus, you must have your money and mortgage ready before signing the reserve contract. Mortgage approvals take time. If you don’t pay the 10% deposit on time, you could lose your reserve. You have to negotiate clauses into the reservation agreement if your money or mortgage is not ready.
Real estate agents might want you to get a mortgage broker in this process. It is also not obligatory. You can handle the process by hiring your mortgage broker or even without a broker.
6) Do I have the right of first refusal?
These generally don’t exist in Spain, but you can ask: “The Agent or Seller can’t sell the property during the reserve period without offering it to me first” in your reservation contract. You might have to pay a higher deposit, and they might say no. For further information, read our article explaining property buying rules in Barcelona.
7) When will I pay the deposit?
As stated, the seller will want your 10% deposit soon after signing the reservation agreement in Barcelona.
But you can’t pay it until;
- You’re sure the property is safe to buy (due diligence) and
- Your mortgage bank does an assessment.
Banks don’t make their assessments all at once. This process can take time. So write in the reserve contract: “The Buyer is granted up to ____ days to conduct due diligence and get a bank assessment before they pay the 10% deposit.” This will give you the time you specify in the contract to complete your transactions.
8) Who will get the payment of reserve contract in Barcelona?
Let’s say everything went well, and now it’s up to the payment of the sale transaction. Another critical issue is to whom you will make the payment? It’s usually paid to the agent. Before you pay, you should check these items;
- Ask for the agent’s license to sell property called an API license.
- Request to see their written authorization from the seller to collect the money.
- Ask if they’re charging you a fee and write it in the reserve.
- Get a detailed, signed receipt back; you’ll need it when you sign the deed.
If the agent refuses these requests, be careful. Google them to see what you can find out. There are hundreds of people selling property with reservation contracts in Barcelona. No license is required. For questions regarding these and other issues, call or email: Mark Carr at 664 665 365 or [email protected].