Buying property in Europe

When a seller and a buyer reach an agreement on the sale of a property, they can sign a preliminary contract.

The preliminary contract is a commitment to sell, a bilateral document signed by both parties in which the seller promises to sell and the buyer promises to buy as soon as the pre-conditions are fulfilled.

In order to be valid, this document must be drafted in the same form as the final sales contract and can therefore only be done as a notarised deed (art. 166 of the civil code). Sometimes the parties prefer to sign a down-payment contract in the form of a private deed, but such a document has no specific legal validity, except to prove that a sum of money was paid to a particular person, and the sum can therefore be reclaimed if the transaction is not completed. A real estate transaction is not enforceable on the basis of this type of contract.

The parties can have only one notary.

A preliminary contract is not necessary.

However, if the parties do decide to set up a preliminary contract, it must contain a number of pre-conditions, such as verifying ownership rights, securing a bank loan, gathering all the certificates required by prevailing law, etc., that are required for the sale to take place. The performance of the final contract is contingent upon the fulfilment of the pre-conditions set down in the preliminary contract. If one or more of the requirements in the preliminary contract is not met, the preliminary contract cannot advance to the stage of the final sale contract.

The preliminary contract also sets the timeframe during which the sale must take place. 

The preliminary contract stipulates the sale price. When the preliminary contract is signed, the buyer hands over to the seller a sum of money, the amount of which is freely set by the two parties. This sum is a down payment and the sale price will be offset by that amount when the final contract is drawn up.

In the event that the sale is not completed, if the party responsible is the seller, he/she must pay the buyer double the down payment. If the buyer is the responsible party, he/she loses the down payment.

The parties may also decide to include a penalty clause, stipulating that if the contract is annulled, an additional sum will be paid by the wrongful party to the other party.

It should be noted that the non-defaulting party, instead of invoking the aforementioned right for the collection of a sum of money, also has the possibility of pursuing the forced performance of the final contract via an action in a competent court of law, in keeping with legal provisions of a procedure called a declaration of intent judgment.

No. Under Greek real estate law, neither the seller nor the buyer is entitled to a cooling-off period or right of withdrawal.