Buying a newly built home is a process that requires a series of signing documents that can sometimes raise doubts and even be totally unknown to the new owners. These contracts are signed at certain times within the purchasing process, from the reservation until the client is already the owner.
Below, we explain what contracts and legal documents you will have to sign and when.
1. Reservation contract or deposit contract
It is the first legal document to sign and is equivalent to the reservation of the home. It is also called a reservation contract for new construction housing. Through this contract, the buyer is guaranteed that the developer can no longer sell this home to another interested party, setting the conditions of the sale in the purchase and sale contract that will be signed later.
This housing reservation becomes effective after signing the document and depositing the stipulated financial amount, ensuring the buyer the right to acquire the house.
This amount is deducted from the total price of the home.
Failure to comply with this agreement by either party entails penalties for the non-compliant party.
2. Purchase and sale contract
The purchase and sale contract can only be signed once the project has the construction license to begin construction. Before this permission, which the developer must request, the purchase and sale contract cannot be signed. In this act all the conditions of the sale of the property will be established: prices, terms, payment methods, guarantees, obligations of the parties among others…
When it is signed, the client must make the second financial contribution, which normally represents between 10 and 20 percent of the total price of the home, depending on the type of promotion, price, etc.
Nowadays, when buying a home it is very common to have to resort to applying for a mortgage loan, so the potential client will have to speak with their bank or they will be able to take over the mortgage that the seller has, in the event that the seller has constituted it.
During the period that elapses from the signing of the purchase and sale contract until the signing of the deeds, at which time the property is delivered to the new owner, the owner must pay at least between 10 and 20 percent of the total amount. of the home, having to pay the rest at the time of delivery of the property.
By law, all amounts delivered to the developer by the buyer must be guaranteed by a bank guarantee or insurance policy and will be deposited by the developer into a special bank account that will only be used for the development of the project in question.
It is in the purchase and sale contract where the penalties that may arise in case of non-compliance by any of the parties or due to termination of the contract are also reflected.
The data of both parties must appear in this contract, as well as all possible information about the property: built and useful square meters, exact address of the property, registration number of the property (if the horizontal division of the building has already been made), description of the home, plans, quality reports, the sale price of the property and the delivery date of the home. All taxes must also be included, as well as writing expenses.
3. Deed of sale
Once the home has been completed and the permits, administrative authorizations and reports from the supply companies have been obtained that prove the completion of the building, it will also be necessary to have entry into ten-year insurance coverage and registration in the appropriate registry of the energy rating of the home. property, as well as the registration of the property in the Property Registry as a completed work. It is at this moment when the buyer and the seller will sign the public deed of sale before a notary.
By signing this document, the buyer becomes the new owner of the home, and may take the document to the Property Registry so that the property is registered in his or her name.
If the buyer needs bank financing, the mortgage loan deed will also be signed before a notary, provided that the mortgage has been granted to the buyer by the financial institution. It is important to highlight that the granting of the loan will entail a notarial procedure where the buyer will be informed of the aspects related to the mortgage loan, such as interest, terms, amortizations, etc., that the financial institution has previously had to present to the buyer.
It is also important to highlight that the process of signing and processing the different documents will have to comply with the provisions of the legislation relating to money laundering, as well as data protection.
All these procedures and document signing can be somewhat tedious, but in the end they seek to guarantee peace of mind for the buyer.
At Salsa Inmobiliaria we advise and go hand in hand with our clients so that this process is agile, easy and provides the security that purchasing your home with us will be the best investment in the home of your dreams.