Purchase / Reservationagreement
Purchase / Reservation agreement
- What it is
- The reservation agreement and the purchase agreement are two documents at different stages of the deal
- Reservation
- Takes the property off the market for a period, usually against a deposit
- The purchase agreement
- Sets out the price, timing, payment procedure and the parties’ obligations
- The most important thing
- The terms for refunding money if the deal falls through — they are read before signing
- A typical mistake
- Signing the reservation and paying the deposit before the property is checked
In plain words
Deals in foreign real estate usually involve two documents. The reservation agreement takes the property off the market for a set period against a small deposit — it records an intention, not a purchase. The purchase agreement is the main document: the price, the procedure and timing of payments, the moment of handover, the parties’ obligations and liability for breach.
The most important thing in both documents is not the price but the exit terms. What happens if the check reveals problems with the property. Whether the deposit is refunded and to what extent. What happens if the developer misses deadlines or the bank does not approve financing. These clauses are written in advance, because after signing the buyer’s negotiating position weakens sharply.
A separate difficulty is language and law. The agreement is often drawn up in the local language and under local law, and the translation sent by the seller is not always accurate. That is why the document is reviewed by an independent lawyer for the buyer, and disputed wording is corrected before signing rather than argued over later.
When it concerns you
What must be in the agreement
- Precise identification of the property
- Area and characteristics
- What is included in the price
- Price and currency
- Payment schedule
- Who pays taxes and fees
- Handover date
- Deadline for registration of title
- Liability for delay
- Deposit refund terms
- Withdrawal if there are title problems
- Dispute resolution
The right sequence of steps
- 01Preliminary check of the property
- 02The lawyer reviews the agreement
- 03Amendments and agreeing the terms
- 04Signing and the deposit
- 05Main payment and registration
What you need to know
- A reservation records an intention, not a purchase
- Deposit refund terms are read before signing
- The agreement is often governed by local law
- A translation from the seller does not replace the buyer’s lawyer
- After signing, the terms are almost impossible to change
Common mistakes
- Paying a deposit before the property is checked
- Signing a document in a language you do not understand
- Not providing for a refund if there are title problems
- Accepting verbal promises instead of contract clauses
- Rushing because “the property is going right now”
What this means for a BRIDGES client
We bring in a lawyer before the reservation, not after: it is the first document that decides whether you get your money back if something is wrong with the property. And we make sure the seller’s promises are in the text of the agreement, not in correspondence.
Frequently asked questions
01 /How does a reservation differ from a purchase agreement?
A reservation takes the property off the market for a period against a deposit — it records an intention. The purchase agreement fixes the deal itself: price, timing, payments, obligations.
02 /What is most important in the agreement?
The exit terms: whether the deposit is refunded if there are problems with the property, if the developer misses deadlines or if the bank refuses financing.
03 /Can I sign on the basis of the seller’s translation?
A translation from the seller is for reference only. The agreement should be reviewed by an independent lawyer for the buyer who knows the local law.
04 /Is the deposit refundable?
Only if this is expressly provided for in the agreement, and on the terms set out there. By default the deposit often stays with the seller.
05 /When should a lawyer be brought in?
Before the reservation is signed. It is the first document that fixes the terms that later determine the fate of your money.
06 /What if you are being rushed?
Slow down. Pressure through urgency is a typical tactic, and it almost always works against the buyer, not for them.
See also
Read next
This material has undergone editorial review by BRIDGES.
Been sent an agreement to sign?
We will check the terms and the deposit refund before you sign and pay any money.