Updated
GL-P-07
Glossary · Real estate
Purchase / Reservation agreement - Purchase / Reservation agreement
01 / In 30 seconds
The short answer
- 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
02 / In plain words
What Purchase / Reservation agreement means
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.
A case from practice
A buyer signed a reservation and paid a deposit, and the check then revealed problems with the property. The reservation agreement did not provide for a refund in that scenario. Had a lawyer reviewed the document in advance, that clause would have cost one line.
When it concerns you
- Buying a completed home
- Buying at the construction stage
- A property for an investment programme
- A deal with a developer
- Buying from a private individual
- Reserving a property before your visit
03 / What it covers
What must be in the agreement
Subject matter
- Precise identification of the property
- Area and characteristics
- What is included in the price
Money
- Price and currency
- Payment schedule
- Who pays taxes and fees
Timelines
- Handover date
- Deadline for registration of title
- Liability for delay
Exit
- Deposit refund terms
- Withdrawal if there are title problems
- Dispute resolution
04 / How it works
The right sequence of steps
Preliminary check of the property
The lawyer reviews the agreement
Amendments and agreeing the terms
Signing and the deposit
Main payment and registration
05 / Key facts
What you need to know
01
A reservation records an intention, not a purchase
02
Deposit refund terms are read before signing
03
The agreement is often governed by local law
04
A translation from the seller does not replace the buyer’s lawyer
05
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”
06 / Expert advice
How to prepare in advance
The lawyer is brought in before the reservation is signed — that is where the refund terms are already fixed. The agreement is read in full, with an accurate translation, and verbal agreements are turned into clauses in the document. Anything the seller promises verbally but refuses to put in writing should be treated as non-existent.
What we do for you. 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.
Igor VentsHead of real estate, Title Deed and property checks
07 / Questions
Frequently asked questions
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.
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.
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.
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.
Before the reservation is signed. It is the first document that fixes the terms that later determine the fate of your money.
Slow down. Pressure through urgency is a typical tactic, and it almost always works against the buyer, not for them.
Related terms
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