We explain what the contract for the sale and purchase of real estate consists of
The sale and purchase of real estate is a contract in which two persons agree and commit that one of them, that is, one of the parties, delivers a thing to the other, to the other party. It is a written agreement, a contract that primarily includes the obligation to pay the price agreed upon by both parties, at the place and on the date agreed. Various aspects can be negotiated, but it must always involve a good or real estate, since in a sale and purchase agreement, it cannot be money or a service. This contract for the sale and purchase of real estate is binding on both parties, whether natural or legal persons, and must be signed by both parties to express the agreement.What data must be reflected in this contract/agreement?
- The good/real estate to be delivered/received
- Agreed and assigned price
- Conditions that have been agreed upon
- Other additional matters necessary for its veracity and legality
Breach of the Contract for the Sale and Purchase of Real Estate
If, at any point in the real estate sale and purchase transaction, the selling or buying party breaches any matter agreed in the contract, the affected party may demand payment or, if not related to payment, a forced solution. If this does not occur, one can always seek annulment of the contract and add compensation for the damages and difficulties caused.Documents Necessary for the Contract of Sale and Purchase
Depending on the type of contract, different documents will be required, but we will focus on the contract for the sale and purchase of real estate, which is the most common.- Title of ownership or deed
- Simple note from the Property Registry
- Certificate of pending debt or zero balance, which must be requested from the corresponding entity
- Property tax receipts
- Habitation certificate
- Latest utility bills and receipts
- Energy certificate
Signature Before a Public Notary
It is not mandatory to sign before a public notary; it can be done by private document. Its advantages are:- You would not pay taxes
- It can be sold even if the property is not in your name
- It cannot be seized because it is not registered in the Property Registry in your name.
- Since it is not done in a public deed, and therefore not in the Property Registry, you will not be able to register it in your name
- Since it is in the seller's name, it may cause a debt from the same
- Since it is not registered in your name, banks will not be able to grant loans
- Since the real estate is registered in the seller's name, they could sell it to another person in a public deed, which would have preference.
Steps to Follow for Carrying Out a Sale and Purchase of Real Estate
- Contact with the seller
- Visit to the real estate
- Reservation document with earnest money (usually has a validity deadline)
- Review of encumbrances and debts (if there are encumbrances or debts, a debt certificate must be requested)
- Execution of the contract or attendance at the notary for its public deed. According to the Mortgage Law, the notary must have the documentation at least 12 days before the signing, meaning that in a public deed, a sale and purchase cannot be carried out in just 2 days, for example.
- Registration in the Commercial Registry
- Payment of fees (notary + registry + management) and corresponding taxes depending on the autonomous community and personal reductions.