‎Buy and Sell Agreements in Brazil

Understand how the property purchase and sale contract works

Negotiating a property can be complicated for a lay person in the matter. In this sense, one of the points that usually generate more doubts is the property purchase and sale contract. If you are thinking about acquiring a property or negotiating something you own, you must be aware of all the peculiarities of this very important document.

Thinking about it, in this post we will point out the main items existing in a property purchase and sale contract, and how it works. This will help you to understand more about the subject. So, read on and check it out until the end!

What is the property purchase agreement?

The purchase and sale contract acts as a compromise between the seller and the buyer. It records the intention of the first to hand over ownership of the property to the second, which must make available the amount corresponding to the value of the property acquired.

This is because the sale only takes place with the drawing up of the public deed by a notary at the registry office, which is the stage subsequent to the signing of the contract.

It aims to stipulate the amount agreed between the parties in the negotiation, the conditions and forms of payment. According to the Civil Code, a legal instrument that governs contracts of this type, both parties must be capable and lawful.

From the moment the contract is signed by both parties and registered with a notary, the real right to purchase the property is created. That is, if the document is not registered, the sale of the property has no legal value. Thus, if any of the parties involved decides to go back in business, it will be impossible to demand any repair.

How does the contract work?

In the contract, it is essential that the obligations of the buyer and seller in relation to the negotiation being carried out are very clear. For this reason, the preparation of the document is a critical activity and, therefore, must be accompanied by a lawyer with knowledge in this type of transaction, to avoid any misunderstanding.

Just as the seller must be careful in preparing, the buyer must analyze the document very well before giving a signature in order to avoid assuming any responsibility that is not his.

The first step in drawing up a property sale contract is to write the document. It is possible to find a number of templates on the internet that can be used to facilitate this process. After writing it, it is necessary for both parties to analyze all the devices described in order to verify whether they agree or not.

Then, buyer and seller must go to a registry office, where the signature and signature of the contract must be performed. From there, the document takes legal force.

What is its importance?

The contract is a legal instrument that guarantees the fulfillment of the duties and rights of both parties in a given business relationship. In the case of real estate, this importance is demonstrated in the guarantee that the sale will take place, since it only happens with the passage of the deed.

It is through the execution of the contract signed in a notary public that we are sure that everything that has been agreed between the parties must be fulfilled, with the aim of avoiding any type of complication.

In the event that any of the parties fails to comply with their obligations, it is possible that the buyer or seller will file a lawsuit in order to be repaired for any inconvenience caused by failure to comply with any device.

When the property is negotiated in installments and there is any delay in payment, the Buyer's Law establishes that fines of 2% on the installment amount and 12% per year of default interest may be applied.

If the seller does not accept to receive installments in arrears, acting in bad faith to incur higher interest, the buyer can demand his presence at the registry office where the contract was signed in order to receive it in front of the notary.

What information should be included in the contract?

There is several relevant information that must be inserted in the contract so that it ends up not fulfilling its role as guarantor of rights.

At first, the contract must include the names, nationalities, professions, identifications and addresses of both parties involved - buyer and seller. In situations where the second is married, the data of his partner must also be included in the contract for him to sign the deed.

It is also necessary that the data of the property are present in the contract. Among them, we can highlight the address, number and date of registration with the city hall, the description of the property and characteristics and dimensions of the property being negotiated.

In negotiations where monetary corrections and interest are being charged on the property's debit balance, the rates practiced and the index applied in case of interest must be included.

When the property is located within a condominium, for the purpose of protecting the buyer and seller, all urban restrictions for the location must be recorded in the contract. In the case of real estate purchased at the plant, the contract must include some important information, such as:

the start and end date of the work;

the total value of the property and the payment terms (financing, consortium, etc.);

the complete data of both the buyer and the construction company and representatives of the building's construction;

the grace period for withdrawal from the contract;

late payment penalty;

localization;

total footage of the property.

What documents are needed?

The list of documents necessary for the drafting and signing of the contract is long. However, most of these items are easily accessible and only a few can take a little more effort.

Property documents

For the property, it will be necessary to gather:

certified copy of the deed on behalf of the seller;

negative certificate of taxes, condominium debts and twenty years of real liens;

certified copy of the IPTU discharge for the year;

plant approved by the city hall;

registration of the construction registered with the real estate registry office.

Buyer documents

For the buyer it is necessary to gather:

copy of RG and CPF;

in case of married marital status, the partner's RG and CPF and certified marriage certificate;

personal data such as address and profession.

Seller documents

The seller needs to gather more documents than the buyer in order to protect the sale against any pending on his behalf. Among the roles are:

copy of RG and CPF;

in case of married marital status, the spouse's ID and CPF and certified marriage certificate;

proof of address;

negative certificate of civil actions, protests at the federal and labor justice levels;

negative guardianship and interdiction certificate.

What care is needed before signing the contract?

So far, we have seen some essential information for you to understand what the rules are for making a contract. However, there are still some factors that need to be known so that you can protect yourself from possible financial or emotional losses. Let's look at some of these precautions.

Know well who you are negotiating with

It does not matter if you are entering into a property sale contract with a construction company or an individual owner, in both cases it is essential that you research your suitability.

In the case of an individual, it is necessary to check if they have a criminal record, which can be done in person in a criminal forum, accessing the website of the State Public Security Secretariat or the Department of Civil, State or Federal Police.

On the other hand, when a construction company or developer has a bad reputation, it is easy to find negative comments about it on the internet. Therefore, be aware of customer complaints about delayed works, failure to comply with contractual clauses, non-delivery of real estate, etc.

In some cases, it is possible to access the files of the Courts of Justice on the websites of the Courts of Justice. Investigate which of these lawsuits were initiated due to lack of commitment from the construction company.

Check the documentation

It is essential to check the documentation of the property. For this, it is necessary to check the documents at the Real Estate Registry Office responsible for the region in which the residence is located.

If the property you are buying is already ready, it is mandatory to have a record of the deed in the registry and the history of previous negotiations. On the other hand, if the house is still on the floor plan, it is essential to verify the registration of the property of the land and the incorporation of the construction.

This last document assures the buyer that the project is approved and that the mandatory legal requirements will be met by the builder or developer. It includes, for example, tables in the ABNT area (Brazilian Association of Technical Standards) that specify the footage of the private, common, total area and the ideal fraction of each apartment.

Read the descriptive memorial

Have you heard of the descriptive memorial? Many people are unaware of the existence of this indispensable document. However, it is very important to read this statement that contains all the characteristics of the property that will be delivered by the builder or developer.

Ask your questions

Do not underestimate the value that the security and peace of mind of doing a good business can provide. However, for you to experience this sensation, it is necessary to first eliminate any uncertainty. Therefore, talk openly with the brokers of the construction company or developer, question deadlines and the details of the work.

In addition, visit the property as many times as necessary to learn about its peculiarities. If possible, don't do this alone, take your family or a friend for a second opinion.

If the property is currently under construction, follow the work - you may need to go to the site or watch the building steps over the internet. When you go to the development stand, look closely at his model and ask about anything you are curious about.

Archive documents

Another attitude that will protect you is to archive all documentation related to the negotiation of the property. Do this in an organized way, creating a virtual folder and a physical one with the information related to the purchase, for example.

Even electronic messages exchanged with brokers or company representatives must be stored. If in the future it is necessary to file a lawsuit, all of this data can be used as evidence.

In addition, keeping documents filed and organized prevents them from being lost, making it necessary to issue a duplicate, which can be very expensive financially.

Seek professional help

Certainly, you have noticed how many important and detailed aspects need to be taken into account in order to enter into a purchase and sale contract. This task can be a challenge for people who do not have much time or little knowledge about the real estate market.

However, with the help of professionals, it will be easier to choose a property, negotiate it and conduct the closing of the sale more safely.

Another very efficient aid is the use of virtual tools to search for the best property. These technology solutions are offered through real estate applications that connect builders or developers with people interested in purchasing a property.

With this help, it will be easier to decide on the house, apartment or land that best suits you and your family.

Remember that no business transaction should be done on a word basis, but with the signing of a contract. In addition, checking the documentation and taking some essential precautions will make the buying and selling process go more smoothly.

How to define the payment method?

The success of buying a property is largely related to the right choice of payment method. Thus, understanding how the purchase of a spot and installment apartment works is fundamental. This will allow you to make the purchase decision based on the reality of the financial moment you are experiencing.

Thus, it is essential to avoid future inconveniences, such as default, in the case of the financed property. For this reason, we have introduced the payment options commonly available for the purchase of real estate. Look!

In cash

This is the simplest way to pay for a property, as having the full value of the property does not need to negotiate installments or seek real estate financing. Paying off property in cash is also advantageous due to the bargaining power it provides.

In this case, care must be taken to be clear about the total cost of the purchase, adding to it the ancillary costs to the purchase. These expenses, if disregarded or miscalculated, can take the buyer by surprise.

Then, when deciding to pay in cash for the house, apartment or land, add the costs with taxes and notary fees to their value. Also include in your accounts the cost of the move, and leave a separate amount for possible adjustments to be made to the property.

What is the next step in buying the property?

Handing over the property to your name follows the conclusion of the contract and sale, after the parties have fulfilled what is agreed in it. The act of transmitting the definitive property of the asset depends on having the land, house or apartment registered in the name of the person who bought it.

This is because the property registration is the notary act in which it is declared who is the legitimate owner of the property. To provide this document, it is necessary to go to the Real Estate Registry Office of the region where the property is located.

The registration procedures demand to present the purchase and sale contract executed between the parties, having the property as object. To draw up the deed, the notary will also request the buyer's personal documents, in addition to the seller's certificates.

With everything properly presented, the notary will prepare the deed, for later validation by the buyer and seller. To complete the procedure, taxes and fees for the transfer of real estate and notary costs must be paid.

All this done, the buyer will receive the updated registration of the property, already indicating the property registered in his name.