|The way in which sales are usually wound up is summarised as follows:
1. Usually the buyer and seller agree on the terms and condition of sale by means of a private, written contract. (Contracto privado). The contract defines the type of property in question, the payment terms, who is liable to taxes and transfer costs as well as the time of transfer of the property, in some case including the household effects.
2. Often an option-to-buy contract is closed, rarely do they however include the settlement of arrears (arras) whereby the buyer forfeits the deposit paid; should he not pay the outstanding funds within a stipulated period; and the seller pays double the deposit received by the buyer should he decide to sell to another buyer within a stipulated period. Already during in the negotiation phase, the buyer should ask for proof of the following: Have the property taxes (IBI) been paid for the last five years ? Is the seller familiar with the municipality's cost distribution and town levies? Is the property in question currently rented out? In this case the tenant has first option on purchase (of the property).
3. The notary will generally only get involved once both parties (buyer & seller) have agreed on all purchase related conditions. The notary verifies ownership of the real estate and the payments due, which are retrieved from an extract of the land register.
4. The land registry is committed to inform the notary of any changes in the land register within 10 days of application, from the time where the notary requests an extract from the land register. (e.g. If during this period an application for a mortgage or an embargo is entered).
5. Within a 10 day time-limit the notary title deed is usually closed. Statements of both parties are certified and it is usually then, when the ownership of the real estate goes over to the buyer. Should the real estate be financed, the buyer grants the mortgage in favour of the financing bank against receipt of a bank cheque. The cheque is then passed onto the present seller. If an existing mortgage is merely taken over, the previous mortgage payer will receive this cheque. The notary will explain the meaning of the purchase contract, the costs as well as the tax entries etc. It is advisable, to effect payment or substantial part thereof only at this point. Sometimes the notary could insist that the amount to the value of the purchase price be deposited into the notary office account in advance.