Nowadays and more frequently today we find that some operators of the real estate area, who call themselves real estate agents, lack basic legal technical preparation and professionalism. This is what you pay when an activity doesn’t belong to an association and therefore isn’t controlled, with the exception of the real estate agents’ activity.
There are real estate agents whose only goal is to achieve the signature of the document that obliges the interested buyer, in order to satisfy their clients, the sellers, without taking into account many times the damage they can cause to the confidence that should prevail in the real estate intermediation. They are practically sellers, and at the same time, they are real estate advisors because they can represent the seller and they can be guarantor of the property buyer’s rights and that requires competence and professionalism among other things.
We shouldn’t think the worst, but often due to their ignorance, the buyers are proposed to sign documents by the real estate agents and these documents are not what they are supposed to be; that it is, although sometimes documents are called in some way, the reality is different and this can bring terrible consequences for the buyer.
In this article we want to report this action and we ask our readers to carefully read this article which will be of their interest because we are independent real estate advisors with great experience in the real estate sector, field of our specialty for more than 36 years.
The deposit contract is a binding contract or promise of purchase through the disbursement of money, called deposit, which penalizes the breach of contract with the loss of the delivered amount or with the obligation to return the double of what was paid.
This contract should gather the essential elements of the purchase operation to be made. Consult Alicante real estate lawyers Carlos Baño León.
In this regard we notice that every day the deposit contract is used more as a step prior to the recording of the deed and the reason is that operators find less formalistic and simpler the deposit contract document, and also they find that it adjust very well to real estate transactions of short duration.
To tackle this trend, real estate and construction lawyers of Carlos Baño León advise their homebuyer clients so that this document has full guarantees and promises them a safe home purchase.
In this kind of contracts, the different parties usually agree a term of two or three months or even less time. Hence a private contract for property purchase has no sense at all.
If the sale agreement involves a second-hand property we could conclude saying that this is the most frequently used contract prior to the registration of the deed without the need of private purchase contract.
But the fact that this contract is formally simpler does not mean that the buyer should lower his guard by entrusting the assumption of specific obligations to the registration of the deed.
We always warn that what is not included in the deposit contract will then be subject of controversy in the registration of the deed and may cause many frustrated operations with serious damages.
Always consult a real estate lawyer, get advice from a lawyer expert on Property Law and this will be the way you have full security in the purchase transaction that you are going to do.
Fraud. Attempts of avoiding you the payment to the seller in case of breach.
We had recently the opportunity to witness two fraud attempts to a buyer.
On one of the occasions, the real estate agent sent a contract named as deposit contract in which they payment of an amount was requested to the buyer and allowing the seller to back out without having to pay more than he would receive. That it is, although they were saying to the buyer that this was a deposit contract, actually it wasn’t.
On the second occasion, there was an obvious attempt to cover up a fraud and although the contract provided the implementation of the deposit clause and the return clause (in which it was stated a double refund for what was received from the buyer), it is true that in the following clause was suspended the entry into force of the deposit contract for a period of time. In other words, it rendered useless.
As you can see a shameless fraud because the buyer signs thinking that the seller assumes the double payment clause and on the other hand is not doing it and no obligation assumes the seller. Can the behavior of the real estate agent be qualified as honest and professional?
Other figures that are not advisable and that will want you to sign
If they don’t give you a private contract to sign nor a deposit contract they may give you a reservation contract of purchase, which is actually a purchase promise and that is used for houses under construction as well as for houses already built.
This type of contract is a so-called preliminary contract in which the parties are bound to the purchase but normally no sanction or penalty will ever be fixed in case of breach of contract.
This doesn’t make much sense because if the objective is that the buyer has some rights on the property, the best thing would be to constitute a purchase option where logically the buyer could request the fulfillment of the obligation, in this case of the purchase, and in case of breach of contract he could ask for damages.
A reservation contract will only have sense in cases of dwelling under construction as prior step to the signing of the purchase contract.
What we should do before signing the deposit contract?
We will never get tired of insisting on the importance of being advised by a lawyer as any omission of data in the purchase contract can damage the transaction later at the moment of recording the deed.
Of course, before signing, your lawyer should check if there is a whole series of budgets that guarantee the status of holder of who may appear as owner, or the authorization for signing the contract of the real estate agent and very important the authorization for the receipt of the amount on account. We are talking exactly about a question of being sure of what is being sold and where the money is going so that later we don’t find any unpleasant surprises and the owner could deny neither the authorization nor the reception of the money, etc., or other requirements that may make us impossible to claim.
Don’t skimp on paying a lawyer‘s fee for his or her legal advice because it will save you a lot of trouble. The purchase of a home is one of the most important legal acts you will perform, so you can’t think about saving a lawyer’s fees because the risk you take is such that it can cost you dearly. We don’t say that you shouldn’t listen to a real estate agent especially if he is competent and honest, but think that the real estate agent represents the seller and therefore you need someone to represent and defend you.
For many years Carlos Baño León real estate lawyers have been advising on the purchase and sale of housing at very good rates, so contact us and you will enjoy an immediate, professional, economic and honest service.