One of the central documents in the preparation of a mortgage is a contract of sale concluded between the borrower-buyer and the seller-owner. However, the basic document of the transaction may be preceded by a preliminary contract. For example, when buying an apartment on the secondary market, this is observed quite often. There are two explanations for this fact.
- The client has found a suitable apartment option for him, but can not immediately purchase it. Since the bank needs to analyze the object, examine the report of the appraiser, check the legal transparency of the rights to own the flat and other such things. All this can take from one to three weeks. And who knows, maybe in a few days another seller will appear at the seller, who will offer a large amount. To avoid this, the borrower-buyer goes to the conclusion of the preliminary contract.
- The client himself wants to sell the mortgaged real estate. However, the removal procedure may also take days. In order not to lose a good buyer offering a good price, this time the seller himself initiates the conclusion of a preliminary contract of sale.
General content of the preliminary contract
Despite the fact that such a contract is not subject to mandatory certification by a notary, it is still desirable to do this. Nevertheless, even without this, after the signing of the paper by both parties, the preliminary contract acquires legal force and becomes a document. The main banks of the Russian Federation – Good Finance, and indeed almost any other bank, support the conclusion of the transaction at a preliminary level. Good Finance employees, for example, when applying for a mortgage, always advise clients to enter into a preliminary contract for the sale of residential real estate with sellers. In general, a preliminary, written in writing option of the transaction is not much different from the main one. The standard sample consists of several sections (chapters):
- Section 1. Characteristics of the object of the contract (it is the object of the mortgage). All data to apartments / houses / other real estate.
- Section 2. Here it is indicated how the property will be paid.
- Section 3. Features of calculations.
- Section 4. Rights and obligations of the buyer and seller.
- Section 5. The term of the contract. Also here are some special moments of this particular transaction, non-standard conditions.
Moments of special importance
IMPORTANT! In drawing up and affixing the signatures of this paper, the buyer should pay attention mainly to the purity of ownership and possession, which the seller has. It is necessary to carefully check all documentation proving that the seller is really the full owner of the apartment / house. That the property is not in shared ownership, that there are no possible heirs, that there is no hidden registration and that the property is not mortgaged anywhere and has no encumbrances. And the seller, in turn, must carefully check the buyer’s solvency and the time frame in which he undertakes to pay for the purchase. Good Finance for such moments offers the buyer an extract, which he can present to the seller as proof that he will have the money.
The contract of sale begins with an indication of the place (town) and the time of its conclusion, and then the personal data of both parties (passport data).
It begins with an application for the purchase by the buyer of such and such real estate located at such an address at the expense of its own funds and funds received from such a credit institution. In addition, a document must be indicated stating the seller’s ownership of this property. Then the requisites (characteristics) of the real estate are listed: data of technical and cadastral passports, total and living area, number of rooms with indication of each area, number of floors, market and liquidation value. The section ends with the seller’s guarantees that the property is “clean” in terms of pledges, taxes, utility bills. And that not a single person is mentioned in it, which is not mentioned in the present contract as official tenants of this apartment / house.
Here everything concerns money. Indicate the amount of personal cash of the buyer and the funds that he received or should receive from the bank. This refers to money intended to pay for the cost of an apartment / house. Indicates the size of the advance that the buyer paid the seller. This, by the way, is not even an incentive, but rather a condition by which a preliminary contract is concluded. And this is extremely important for the borrower-buyer, since this money has already repaid part of the cost of housing. Consequently, this will affect the size of the mortgage, which in turn will determine its other criteria (interest rate, down payment, etc.). The terms of the mortgage loan itself are also mentioned in this section. It also includes information that the purchased real estate is not mortgaged anywhere. Finally, it is necessary to reflect the details of the creditor bank and the name of the settlement where the real estate is located and the transaction is concluded.
It is more in addition to the second section. Here is the final price of this housing. The final value of the property is one of the key criteria of the document described. It’s not just the buyer. The seller of the money received will be required to pay a state tax of 13%. By the way, the seller will be able to return them to himself (tax deduction when buying an apartment on the mortgage) only in 2 cases. Either the seller owned housing for more than 3 years, or the price of this housing is less than 1 million rubles.
The terms of all payments to the seller are clearly indicated. Usually these are two stages – a deposit and the subsequent receipt of the entire remaining amount. But in the contract of sale it is emphasized that the seller receives all the money only after the ownership rights are transferred to the buyer. Also, the seller undertakes after receiving all the money to write a receipt confirming this fact. In another way it is called “mortgage on the fulfillment of financial obligations by the buyer.” The buyer has the full right to demand this document from the seller after the transfer to the latter of the entire amount of money.
Usually this section consists of three points. The parties undertake to execute the contract within the agreed and mutually agreed period. The buyer undertakes to transfer to the seller a phased amount of money equal to the identified cost of housing (first, advance, after a while the rest). The seller undertakes to collect a list of all necessary documents on his part. This is the standard sample of a preliminary contract. But the mortgage is a responsible matter. Thus, Good Finance insists that the contract (this section) should specify additional obligations of the parties. The seller must keep the property exactly as it was at the time of the inspection by the appraiser.
The seller after signing the contract has no right to change the number of property owners or even transfer their ownership to another person (for example, a family member). The seller is obliged to transfer the immovable property into the ownership of the buyer after this contract is signed. Finally, the seller is obliged to present the buyer with the paper, which confirms the full payment of the cost of the apartment / house. But at the same time, the seller has the right to terminate unilaterally the concluded agreement, if the buyer has not transferred the money to him within the prescribed period. The buyer also has the right to terminate the contract unilaterally and demand back the pledge if the seller in his documents for his part provided deliberately false information.
Here the first thing is about the duration of the preliminary contract. And that by the time of its termination the parties undertake to conclude the main contract. Among the special conditions can be mentioned a variety of things. For example, the repayment of debt to the seller using the funds of the parent capital. Or the distribution of costs between the parties to the state registration of the contract. At the end of a separate paragraph are the final provisions, which declared the legal force of the contract. And it says that the document is made in 2 identical copies (the buyer and the seller).
This is the general plan of the contract of sale, which is concluded when taking housing in the mortgage. Sometimes some sections may merge. For example, section 2 and 3. Some banks may offer the services of their specialists to help with this contract. For example, Good Finance employees willingly advise potential borrowers on all the intricacies of drawing up such a document. Perhaps because Good Finance actively supports mortgage lending in the secondary housing market, where the need for a preliminary contract most often arises. Good Finance also supports the use of various government supports (matkapital, subsidies) for the calculation with the seller.