What is a deposit agreement?

If you are about to buy a home in Madrid or sell a property, the deposit agreement (contrato de arras) is usually the most important step before signing at the notary. It is the document that “locks in” the transaction: it sets the price, deadlines and conditions, and determines what happens if either party fails to comply.

The deposit agreement is a private contract between buyer and seller whereby both parties commit to completing the purchase within a specified timeframe. Typically, the buyer pays a deposit and the essential terms are agreed upon: price, signing date, property condition and documentation.

Types of deposit agreements: the difference you should know

• Penitential deposit: allows withdrawal; the buyer loses the deposit and the seller must return double.
• Confirmatory deposit: reinforces commitment and allows enforcement or damages.
• Penalty deposit: includes a contractual penalty in case of breach.

If the type of deposit is not clearly specified, it is advisable not to sign.

How much is usually paid

Typically around 10% of the purchase price, although it may vary. The agreement should clearly specify the amount, payment method and allocation to the total price.

What a solid deposit agreement should include

• Full identification of buyer and seller
• Property description and annexes
• Price and payment schedule
• Notary signing deadline
• Distribution of expenses
• Status of charges
• Occupancy status
• Documentation provided

Key clauses protecting the buyer

• Financing condition
• Document review clause
• Realistic timelines

Key clauses protecting the seller

• Clear signing calendar
• Proof of buyer solvency
• Delay penalties
• Definition of included furniture

Common mistakes and how to avoid them

• Not specifying deposit type
• Not including annexes
• Not clarifying charges
• Deadlines too short
• Payments without traceability

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How BARNES Madrid supports you

At BARNES Madrid, we ensure the deposit agreement becomes a security tool rather than a risk. We coordinate document review, negotiate timelines and prepare the notary signing. BARNES Madrid BARNES Madrid.

We welcome you at Velázquez 15.