What is an Upfront Money Guarantee?

Upfront given money is the amount most often mentioned when talking about the pre-sale real estate?It is a guarantee to the seller that the buyer will buy an apartment and that during the conclusion of the contract of sale, the rest of the amount will be paid. In this text, we will explain everything you need to know about the it. Click here to know more about us.

When buying an apartment, house or office space, you must be well informed about all the obligations that await you. In addition to checking and preparing the documentation, you must extract the money for the payment. As a buyer, you give the seller a pledge as a guarantee that you will conclude a contract with him for the sale of an apartment (or some other immovable property). Although the purchase of a flat is a higher burden on the buyer, the seller must in some way be assured that the contract will come to an end. Also, while in the process of negotiation, the seller must stop selling and refuse other potential customers.

Apart from the seller the buyer is protected by receiving a small amount of money. If the sale agreement is not concluded due to the seller’s responsibility, the buyer has the right to demand that the seller pay him twice the amount of the loan. If the conclusion of a sales contract does not occur due to the buyer’s responsibility, the seller has the right to retain the entire amount of the hedge.
However, what if the buyer can not know with certainty that he knows that he will really buy an apartment and sign a sales contract?

Such uncertainty is most often monitored by credit buyers, but we will explain everything you need to know about giving a cap in that case.

Although customers first require a credit extension, they generally know under what conditions they can take a loan, for how many years in which amount. However, there is always some uncertainty about whether a bank will really grant a loan. In order to avoid misunderstandings and damages, it is best to agree on how to solve this problem before it arrives. The first option is to reach an agreement with the seller to repay or one part of the amount is refunded if the bank does not approve the loan, and the pre-contract will be terminated at the expense of the buyer.

The second option is disadvantageous to you, as a buyer, that is, in the event that a bank does not approve a loan, the entire amount of the credit remains to the seller. Whatever you arrange in the preparation of the pre-contract, define these items and the contract must be verified with the notary public. In this way, you will be sure that the procedure for returning the money given is done according to what is stated in the pre-contract.

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