Differences between OFFER and RESERVATION in the purchase of a property

After searching and finding the property that interests you, and after having seen and compared several options, it's time to "bet" on your future home.

Possible scenarios when buying a property

There are two possible scenarios: First, you may be certain that the asking price is what you're willing to pay and you have the money in your bank account to buy it. Second, you may want to negotiate the price with the seller and/or be waiting for a mortgage. In both cases, there are documents that need to be signed.

The OFFER in the purchase of a property

SIf your intention is to negotiate the price and there are conditions that depend on mortgage approval, then we're talking about an offer. For a house offer to be firm, there must be a deposit (around 1% of the offer price), which demonstrates to the seller your genuine intention to offer a specific price.

To make an offer, you must sign a document and deposit the required amount. If this offer is made through a real estate agency, the money will be deposited into an escrow account, which professional real estate agencies maintain for this purpose and which is completely separate from the office's business accounts.

In addition, an offer document will be signed, which must include the date and time the offer is made, the amount, and details of the property for which the offer is being made. If there are other conditions, they must also be included in this document to proceed to the next step of the real estate transaction: the signing of the earnest money agreement.

After signing this offer, the seller has a maximum period, usually 7 days, to accept or reject it. If the offer is accepted, the money will remain in the escrow account and will form part of the earnest money deposit. If the seller rejects the offer, the money deposited with the real estate agency, which acts solely as an escrow agent, will be returned in full to the client who made the offer.

The RESERVATION in the purchase of a property

Assuming you've reached an agreement with the seller on the price, it's time to finalize the deal. This involves signing the property reservation agreement, as the civil code already covers this type of agreement. Specifically, the payment to reserve the property is considered a deposit.

There are three types of earnest money contracts: earnest money with penalty clauses, which are the most common; earnest money with confirmation; and earnest money with penalty clauses.

Importance of penitential earnest money

A penalty clause is a type of contract that allows both parties to withdraw from the agreement under certain conditions. This type of deposit is especially useful for buyers who want to ensure they have the option to back out if circumstances change. For example, if the buyer doesn't obtain the mortgage they expected, they can get their money back.

Regulation in Catalonia

It is important to note that in Catalonia, the regulation of earnest money (arras), until the entry into force of Book Six of the Catalan Civil Code on January 1, 2018, was primarily and solely governed by Article 1454 of the Catalan Civil Code. This article has been replaced in Catalonia by Article 621-8 of the Catalan Civil Code. This means that buyers should be aware of the new regulations that may affect their transactions.

Tips for a successful purchase

When buying a property, it's essential to be well-informed and prepared. Here are some tips that can help you through the process:

1. Research the market: Understanding the real estate market will allow you to make a fair and competitive offer.

2. Consult an expert: A real estate advisor can offer valuable information and help you navigate the buying process.

3. Review all documents: Make sure you understand all the documents you sign and don't hesitate to ask questions if anything is unclear.

If you have any questions, please don't hesitate to contact me. I'm here to help you make informed decisions and guide you on this exciting journey to your new home.

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