Earnest Money Contract in Spain: What Is It and What Should You Check Before Signing?

An earnest money contract (contrato de arras) is a very common document when buying a property in Spain. It is usually signed before the final deed of sale and records the commitment of both the buyer and the seller, as well as the main conditions of the transaction.

Although it may seem like a simple formality, signing an earnest money contract without carefully reviewing its terms can lead to important problems. Before paying any amount, it is therefore essential to check several key points.

What is an earnest money contract?

The earnest money is an amount paid by the buyer to the seller as a deposit and as part of the agreed purchase price. The contract should clearly set out the conditions of the sale and explain what happens if either party fails to complete the transaction.

There are different types of earnest money agreements in Spain, so it is important that the contract clearly specifies which type applies and what its consequences are.

What should you check before signing?

1. Make sure the property details are correct Check the address, surface area, cadastral reference and other identifying information. It is also advisable to verify who is legally registered as the owner.

2. The purchase price and deposit The contract should clearly state the total purchase price, the amount being paid as a deposit and how this amount will be deducted from the final purchase price.

3. The conditions of the sale The contract should specify when the public deed of sale will be signed and what happens if there are charges or outstanding issues affecting the property. It should also clarify what is included in the sale, such as furniture, a garage, storage room or specific equipment.

4. What happens if one of the parties does not comply? This is one of the most important points. The consequences depend on the type of earnest money agreement and the terms established in the contract. You should never sign a clause that you do not fully understand.

5. The legal status of the property Before paying any deposit, it is advisable to check whether the property is free of charges or to understand exactly what charges exist. You should also check for outstanding debts, liens, restrictions or other circumstances that could affect the purchase.

Special attention for foreign buyers

If you are buying a property on the Costa Brava as a foreign buyer or non-resident, it is particularly important to review the contract carefully and make sure you understand all its conditions. An automatic translation or informal explanation should not replace professional advice when there are doubts about the terms of the agreement.

An earnest money contract should not be treated as a simple formality. It is a document that legally commits both parties and can have significant financial consequences.

Before signing and paying any money, carefully reviewing the property documentation and the terms of the contract can help you avoid unexpected problems during the purchase process.

Are you thinking about buying a property on the Costa Brava? At Immogrupstar, we have extensive experience in the buying and selling process and can help answer your questions and guide you throughout the process.