As soon as you have chosen a property 3 separate phases are initiated:
Phase 1: Purchase Proposal
A Purchase Proposal is a written proposal drafted by the estate agent and presented to the seller on behalf of the buyer. With this proposal, the buyer agrees to purchase the property at the price and terms described in the proposal during the period of validity of the proposal. The buyer must make a deposit on the property simultaneously with the transfer of the proposal by issuing a cheque made out to the seller. This is called an “caparra confirmatoria” (article 1385 of the Civil Code). The buyer entrusts the real estate agent with the cheque until the seller has countersigned the proposal. The amount of the cheque is related to the sale as stated in the Purchase Proposal and serves as a deposit. Usually the amount is somewhere between €1000 and €10,000. When the seller accepts and countersigns the proposal both parties are legally bound to signing the Preliminary Purchase Agreement (Preliminare of Compromesso). In the event that the seller does not accept the proposal, the estate agent returns the cheque to the buyer.
Phase 2: Preliminary Purchase Agreement
A Preliminary Purchase Agreement is a contract between the buyer and seller confirming all important information and conditions regarding the property as described in the Purchase Proposal. This includes price, date of transfer, method of payment, amount of deposit and fine in the event that one of the parties forfeits the sale. At the time of signing the Preliminary Purchase Agreement the buyer is required to make a second deposit to the seller. This amount usually totals –in conjunction with the first deposit– 20% to 30% of the agreed on overall price.
Upon issuance of the deposit the buyer commits him-/herself to abide by the contract. If, after this point, the buyer wants to pull out of the purchase for any reason whatsoever he/she loses the deposit. In the event that the seller wishes to withdraw from sale after signing the Preliminary Purchase Agreement, he/she is obliged to pay double the deposit to the buyer.
Phase 3: The notarial deed
The notarial deed is drawn up by a notary of the buyer’s choice. The notary costs –2% to 3% of the purchase price– are borne by the buyer. The deed counts as the legal transfer of the property. During the signing of the notarial deed of sale, the buyer must hand over a cheque with the final amount of the selling price. The notary will then register the deed of absolute sale in the cadastre and provide both parties with a copy of the document.