Buying or selling real estate is a complex legal process that requires precision and caution from all parties involved. To ensure legal security and avoid potential problems, a pre-contract for real estate purchase is often signed before the main contract is concluded. In this text, we will explain its significance, content, and the procedure during the real estate purchase process.
When is a preliminary contract for the sale of real estate signed?
A pre-contract is a legal document in which the parties commit to concluding the main agreement in the future under the previously agreed-upon terms. It contains the essential elements of the sale and has the same legal form as the main contract. This document is drafted and signed when the buyer and seller have reached an agreement on the purchase conditions, but additional time is needed to prepare the documentation or meet other conditions (e.g., approval of a housing loan). It binds the parties until the main contract is concluded.
Real estate purchase procedure in Serbia
The process of selling real estate goes through several key stages:
Pre-contract for the sale – defines key terms and obligations of the parties;
Deposit for the apartment – a monetary amount that guarantees the intention to purchase;
Sales contract – the main purchase agreement;
Payment in total – completion of the transaction and handover of the property.
The pre-contract is signed in the presence of a lawyer or real estate agent, and it is advisable to have it notarized, although this step is not mandatory in Serbia.
Content of the pre-contract
The pre-contract must contain all the key elements of the sales contract, which are:
Identity of the buyer and seller
Description of the property (location, area, cadastral data)
Basis for the seller’s ownership rights
Price of the property
Amount of the deposit
Payment terms and method
Date of signing and conclusion of the main agreement
Date for tenant’s eviction and new owner’s move-in
Obligations for covering the costs of the sale
Deposit as a guarantee of seriousness
The deposit represents the first monetary amount that the buyer gives to the seller and serves as security that the final purchase will occur. It typically amounts to 10% of the total purchase price. If the buyer cancels, the seller keeps the deposit. If the seller cancels, they must return double the deposit to the buyer.
For cases where the deposit exceeds 10,000 euros, which is the legal cash limit, the remaining money is transferred from the buyer’s account to the seller’s account.
Sales agreement
The main sales contract contains the same elements as the pre-contract, but it holds greater legal power. After the contract is notarized, the purchase price is paid and the property is transferred. The seller must provide evidence of paid utility bills (electricity, water, taxes) before the buyer takes possession.
The pre-contract for the sale of real estate is an important legal document that ensures the safety and transparency of the transaction. Proper drafting and signing of this agreement can prevent many legal issues and ensure that the sale is carried out under the agreed terms.
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