1. The reservation contract (Contrato de Reserva)
This is normally the first legal document to be signed in your purchase process. A reservation deposit (typically €3000) is paid and then the property is taken off the market and the price you have agreed is frozen.
Within the contract it will state: the agreed price, the date for the Private Purchase Contract (PPC) to be signed (typically 4 weeks after reservation) plus the amount of deposit to be paid. Also the outline of taxes to be paid and by whom.
The appointed lawyer will then carry out all necessary checks (searches) on the property. This includes searches on the property to establish ownership and resolve outstanding debt and more importantly, checking that the deed (Escritura) is in order and that it matches the building and land being offered.
2. Private Purchase Contract (Contrato Privado de Compraventa) PPC
Once all searches are completed and everything is in order you can now proceed to sign the Private Purchase Contract and pay a 10% deposit, which is 10% of the total purchase price minus the reservation deposit already paid.
The PPC will outline the vendors and purchasers, amounts already paid, completion date agreed by both buyer and seller.
Once this contract is in place if the vendor should pull out of the sale you should expect to receive your 10% deposit back plus an equal amount. Should you pull out of the sale you will lose your 10%.
3. Completion at the Notary office
Both vendors and purchasers will be present at the notary unless Power of Attorney has been given whereby a trusted person can sign on their behalf.
Your lawyer is responsible for all the necessary paperwork in order to complete the process. This will include any mortgage information if one is needed plus the cancellation of any existing mortgage with bank representatives present to sign.
The Notary will read through the deed and then all parties can sign. On the day of notary you will be required to provide funds to meet the sale price of the purchase, usually in the form of a Bankers Draft. You will then receive the keys to the property and will become the legal owners.
Both parties will be provided with the "Copia Simple" which is a copy of the document you have just signed.