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or in one of the following steps of the deal. It is important to underline that the Unilateral Offer is binding for the purchaser only, until the seller declares in writing to accept it. One of the most delicate issues relating to the Unilateral Offer is that the standard form utilized by the REAs are not usually accurate legal documents and often miss relevant element of the sale i.e. existence of mortgages or other burdens and encumbrances; condominium debts; regularity of the construction from the applicable real estate construction laws; litigation on the ownership of the real estate etc. Thus, the Unilateral Offer should be properly examined to avoid that it is not enough protective for the purchaser and is enforceable also in case one or more of the previously mentioned problems is disclosed after the Unilateral Offer is accepted (or to be granted that if this happens the deposit will be returned to the purchaser). 2. Preliminary Agreement The preliminary agreement is the key step for the purchase of real estate, and it is a contract utilized when the REAs assistance is present too. The preliminary agreement is drafted after the seller delivers to the purchaser all the documentation and information pertaining to the real estate, such as the title of property, mortgages and
encumbrances, the condominium’s account reports when appropriate, compliance with construction laws and regulations, existence of proper concessions and authorizations for possible refurbishment, compulsory energy certification, and other details delineated on a case-by-case basis. The supply of the above-mentioned documentation and information allows the purchaser to conduct a due diligence whose results will be the basis for the drafting of the final deed of sale or for the execution of the pre-closing activities that may be necessary to legally transfer the property of the real estate to the purchaser without limitation or conditions (cancellation of mortgages, payment of condominium arrears, regularization of construction irregularities etc.). At the time of the signature of the preliminary agreement, the purchaser makes a down payment that constitutes an anticipation of the purchase price, that varies depending on the conditions of sale and is usually between 20% and 40% of the price. The down payment (so called “ caparra”) has also the function of a guarantee, on behalf of both parties, for the execution of the final deed of sale. With the preliminary agreement, the parties will also agree on the timeframe for the execution of the final deed of sale. In some cases, it is worthwhile to register the preliminary agreement
ILN Real Estate Group – Buying and Selling Real Estate Series
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