“Opción de Compra” or “Purchase Option”
This is a contract signed by both parties outlining the terms and conditions of the sale.
It should describe:
- the property to be sold including the building’s size and land size, neighbours, rights of way, easements, etc
- its registry and deed number
- its ratings number
- the price
- the vendor and purchaser’s name, id and addresses
- the deposit amount
- the date of completion
- what will happen if the contract is broken
- who will hold the deposit
- the commission payable to the agent by the vendor
- consider subject to survey clause.
- Do not confuse an “opción” or option with a “señal” or deposit. A señal is a small deposit, perhaps 1,000€ to hold the property until contracts are drawn up. It has no legal status and is usually done over a handshake.
- These contracts are often provided by the agents and primarily represent their interests or the vendors interests. Do not be afraid to suggest that your lawyer will want to be provided with this document.
- You will need independent and impartial legal advise on a purchase contract, so get a lawyer.
- Ensure you have an English translation so you know what you a signing/buying.
- The days of paying 10% deposits are gone . Try negotiating down to 5%. This is much more reasonable.
- Do not expect to get your option deposit back easily without a fight if the money is held with the agent, vendor’s lawyer or vendor, so make sure the money is held by a trusted third party. If it goes to court it can take years.
- Do not sign an option until a minimum amount of due diligence is carried out. Most vendor’s can and should wait for you to check out some basic pre-purchase details.
- Remember an unprofessional agent wants your signature as soon as possible in order to claim a commission.
- Forget paying cash for the option, however much the agent or vendor likes it. This is an antiquated and unreasonable request.