The purchase of a property and its forms of payment

If you are going to make a purchase of goods or property, it would be very interesting for you to know the possible contracts and payment methods that the Spanish regulation offers. We can make different types of contracts for the purchase or sale of a company: earnest money contract or deposit, pay the price in installments…

Different trading contracts depending of method payment

One of the benefits of this contract is the great flexibility in its possibilities of payment of the price. It has different models legally considered for carrying out the business. This is a possible classification:

Sale with delivery reserve (earnest money contract or token payment)

If you decided to buy a home, you had to do the previous checks to make sure everything was in order, the next step is to reserve it. The reservation is done by signing a pre-contract, called earnest money contract or token payment between seller and buyer. In this case they agree the quantity to reserve and the ways to continue with the contract of the final transaction. They have several options of reservation:

• The token payment or advanced payment, is a pre-contract where the parties agreed to reserve the future transaction delivering an amount of money deposit as a proof of it.
• The earnest money contract is a commitment of buying and selling within a period determined, sealed with a payment on account (then it will be deducted). In the event that the seller decides not to continue, you must return to the purchaser twice the previous deposit. If the buyer is the one who decides not to continue, this loses the advanced deposit.
• The purchase option is an accessory contract which allows the buyer time to decide on the purchase or look for another property. But if after the deadline the purchaser does not execute the option to purchase, the seller may retain the delivered initial bonus if they agreed it so.

Do you need to purchase a property? Ask our experts and they will advise you in the process

With purchase price payment in installments

It’s a purchase in which the seller delivers the property, and the buyer must do instalment payments called deadlines, fees, or ”letters”,  in a totally or partially postponed way. Widely used when goods object of the transaction are high priced, such as homes or a local prices, making your purchase easy. Here are its characteristics:

• This deferment in the payment agreed  by the parties is made by more than three months from the delivery of the thing and tends to be compensated by the payment of interests.
• There can be sold -bought by installments goods that are inside commerce and are non-consumable. They can be new or second-handed and lasting in the time, since they will be paid little by little while they are used,
•   Can not be subject of instalments sale:

1. Movable property intended for resale.
2. Non-profit occasional sales.
3. Sales already secured by mortgage, as this already means that it guarantees the payment.
4. Leasing contracts.

• If the purchaser does not have enough money, it is highly recommended to apply for a loan to finance it, so that way, the seller receives  the price in cash, while the buyer is paying at the deadlines.

• You can also negotiate a resolutory condition in which the seller recovers the property in the case the buyer does not pay the agreed deadlines. The payments can go for compensation.

With deferred purchase price paid in cash

Another way to make a purchase or sale of an asset is deferring the payment, delivering the price in a single term. You can carry it out by this two ways:

• Consigning the pact in private document, postponing the signing of the public deed of purchase to the payment.
• Providing the public deed and stating in it the method of payment of the postponement, without the difficulties of guarantee it with a mortgage.

In both cases the buyer obtains the property immediately when the contract is signed and they give you the keys. The seller, ensures the recovery of the property in the case of non-payment by reaching an agreement which includes a clause with resolutory condition.

Housing purchase plan

In this case, the seller is a promoter and the housing is not yet built. Purchase procedure differs with the purchase of a house already built.

The steps to follow are:

• Sign of a pre-contract of reservation (previous payment).
• A private contract: indicates the ending date of the work with the giving of the keys. It also contains the payments to the promoter until that date.
• Once the work ends, the developer must apply for the license of first occupation or certificate of habitability, confirming that it is suitable to of housing and meets the safety requirements for supplies and services.

If the buyer needs financial help, he must hire a mortgage to secure the payment.

Purchase mortgage-backed securities

This contract is made when the buyer who wishes to buy a property does not have enough money, so the buyer asks for a mortgage loan to a bank that will guarantee the payment, and this is responsible to forward the price to the seller and charge the payment of the price to the purchaser. 

Is used in the purchase or sale of real property, usually a flat or a House.

• Is signed before a notary.
• To make the transaction posible, thr good should not have any assessment.
• Is shown with certificate promulgate by the public registry of property.

Sale subject domain

In this type of transaction, the transfer of the domain is subject to a precedent condition which consists in the payment of the price or any other as long as it is lawful. Until the condition is not met, the property will not be definitively transferred to the purchaser.

 If you don’t know any of these concepts or have any doubts, consult our specialists.