The Escrow: How to protect your money in real estate transactions in Spain

Buying a home is one of the most important decisions a person can make in their life, and it is a process that can be complicated and stressful. One of the most critical parts of buying a home is the payment of a sum of money as a deposit or down payment to the seller, which can become a significant risk for the buyer if the appropriate measures are not taken.

The deposit or down payment is understood as a sign or guarantee that the buyer offers the seller to demonstrate their intention to acquire the property, and for which the seller withdraws the property from the market, reserving the right to purchase based on the private agreement signed between both parties. However, delivering a sum of money as a deposit or down payment can entail certain risks for the buyer.

Firstly, there is the risk that the seller breaches the contract and does not sell the property in question. In this case, the buyer may lose the amount paid as a deposit or down payment, which can be a significant loss of money for them. Furthermore, if the seller breaches the contract, the buyer will have to go to court to recover their money, which can be a long and costly process.

Secondly, there may also be risks in case of any urban planning irregularity or physical defect in the property that had not been previously known. In these cases, the buyer may decide not to buy the property and request the return of the amount paid as a deposit or down payment. However, if the seller refuses to return the money, the buyer will have to go to court to try to recover it.

The fact that a real estate agent or agency is involved is not a sufficient guarantee to avoid these risks. We have already talked in previous posts about hidden defects, for example, and how these are often not detected until after the sale.

To avoid these risks, it is essential that the buyer takes certain measures before delivering a sum of money as a deposit or down payment. Firstly, it is recommended to investigate the legal and urban planning situation of the property, to ensure that there are no irregularities that may affect the purchase. Furthermore, it is recommended to have the advice of a lawyer specialized in home buying and selling, who can advise the buyer on the terms of the contract and the conditions of the deposit or down payment. However, in a real estate market like the current one, where attractive properties do not usually last long in the market, conducting the corresponding study without reserving the property can result in us losing the opportunity to buy it.

In some countries, such as the United States or England, there is the figure of "escrow," which is a contract used in real estate transactions to guarantee compliance with certain conditions or obligations before signing a contract. A third party unrelated to the parties (the escrow agent) holds the deposit that the buyer provides, as a deposit or down payment, until the mentioned conditions are met.

At Valido Home, we offer buyers the Escrow service, associated with the deposit or down payment contract, which protects the buyer's savings in case the selling party fails to comply with the agreement or an urban planning irregularity or physical defect in the property is detected. This service offers greater security and peace of mind to the buyer, who can be sure that their money will be protected at all times since, in case of breach by the selling party or irregularity in the property, the buyer will not have to depend on the goodwill of the seller or a long and costly judicial process to recover their money. Valido Home would automatically credit the full amount paid to the buyer's account

In conclusion, providing a sum of money as a reservation or deposit can entail certain risks for the buyer in a real estate purchase. Therefore, it is important to take appropriate measures before handing over the money and to seek advice from a professional in the industry. Additionally, it is recommended to have custody services for the amounts to ensure that the buyer's savings are protected at all times.

In this situation, a solution has emerged in the market that provides greater security and peace of mind to buyers: the Custody of Amounts service. This service is offered by companies specialized in managing and protecting buyers' deposits in real estate transactions, such as Valido Home.

What does this service consist of? Basically, the company is responsible for safeguarding the amount of money given by the buyer as a guarantee of the transaction. This way, in the event that the selling party fails to fulfill the agreement or there are urban irregularities or physical defects in the property, the buyer has the assurance that their money is protected and can be recovered.

But, how exactly does this service work? First, the buyer and the Custody of Amounts company must sign a contract that establishes the conditions and terms of the service. Then, the buyer makes the agreed-upon bank transfer to the company's account, who is responsible for safeguarding the money in a segregated and protected account.

At the moment the conditions established in the contract are met, such as the signing of the public deed of sale and the delivery of the keys, the Custody of Amounts company will release the money to the seller. Otherwise, if there is any non-compliance or irregularity, the buyer can claim the return of their money.

This service not only protects the buyer, but also benefits the seller, as it offers greater guarantee that the transaction will be carried out under the agreed conditions, which can generate a climate of trust and security in the transaction.

In summary, the Custody of Amounts service is a safe and reliable alternative to protect buyers' savings in real estate transactions. Through this solution, situations of non-compliance or irregularities can be avoided, which translates into greater peace of mind for both parties involved in the transaction. If you are thinking of buying a property, do not hesitate to consider this option to ensure that your money is protected.

In conclusion, providing a sum of money as a reservation or deposit can entail certain risks for the buyer in a real estate purchase. Therefore, it is important to take appropriate measures before handing over the money and to seek advice from a professional in the industry. Additionally, it is recommended to have custody services for the amounts to ensure that the buyer's savings are protected at all times.

In this situation, a solution has emerged in the market that provides greater security and peace of mind to buyers: the Custody of Amounts service. This service is offered by companies specialized in managing and protecting buyers' deposits in real estate transactions, such as Valido Home.

What does this service consist of? Basically, the company is responsible for safeguarding the amount of money given by the buyer as a guarantee of the transaction. This way, in the event that the selling party fails to fulfill the agreement or there are urban irregularities or physical defects in the property, the buyer has the assurance that their money is protected and can be recovered.

But, how exactly does this service work? First, the buyer and the Custody of Amounts company must sign a contract that establishes the conditions and terms of the service. Then, the buyer makes the agreed-upon bank transfer to the company's account, who is responsible for safeguarding the money in a segregated and protected account.

At the moment the conditions established in the contract are met, such as the signing of the public deed of sale and the delivery of the keys, the Custody of Amounts company will release the money to the seller. Otherwise, if there is any non-compliance or irregularity, the buyer can claim the return of their money.

This service not only protects the buyer, but also benefits the seller, as it offers greater guarantee that the transaction will be carried out under the agreed conditions, which can generate a climate of trust and security in the transaction.

In summary, the Custody of Amounts service is a safe and reliable alternative to protect buyers' savings in real estate transactions. Through this solution, situations of non-compliance or irregularities can be avoided, which translates into greater peace of mind for both parties involved in the transaction. If you are thinking of buying a property, do not hesitate to consider this option to ensure that your money is protected.