The Closing

At this stage everything is ready for closing the deal: you have found the land you wanted, the real estate due diligence has been made, the price of the transaction has been established by you and the Seller and now you are ready to sign all the documents required to close.

The main document that you and the Seller will sign is a “Notary Deed”: This is a formal document included into the Notary’s Protocol or legal book. In this Deed the Notary will indicate all the information of the property, the Seller and the Purchaser, the kind of transaction that is being performed, and the purchase price. This document will be signed in Spanish, and the Notary will translate it to you, guaranteeing a faithful translation of the Deed. The original document, the one the Seller, you and the Notary will sign, will remain in the Notary’s Protocol. You will, however, have a legalized copy of this original document.

Once the document is signed by all Parties, the transaction is considered to be closed, and once the amount agreed is presented to the Seller, the property is considered to be yours. The Deed needs to be presented to the National Registry in order to register that you are the new owner of that property. Doing this is the sole responsibility of the Notary. He will be contacting you around two months after the date you signed the Deed, and we will confirm that the Deed is recorded and provide you with a certification of the Registry where they certify that you are the new owner of your land.

Closing costs

The closing is managed by a Notary Public: he will draft the Deed, and has the obligation of presenting it to the National Registry and ascertaining that it’s registered correctly and in time. To record a transfer deed in the Public Registry, certain fees need to be paid. To avoid speculation, the Government has established the percentages that will be considered as closing costs:

- Legal Stamps: 1% of the contract price.

- Property Transfer Taxes: 1.50% of the contract price.

- Legal Fees: 1.25% from the total real price.


Who pays for the Closing costs?

There is no established rule about who is the person that pays for the closing costs and that’s why is so important to negotiate this issue with the Seller while negotiating the price that you will be paying for the property. The most common scenario is that both Seller and Purchaser share the costs of the closing. However, as we said, this is something you can negotiate with the Seller.

Additional observations to the Closing

Sometimes the property you are purchasing has been mortgaged previously by the Seller. This situation usually doesn’t represent any problem. Sometimes, when there’s a mortgage on the property, it is cancelled prior the Closing; and some other times it’s cancelled at the same time and even on the same Deed as the Closing. Either scenario will be different depending on the particular case, but you should always rely on legal advice to avoid any complications. The cost of the cancellation is paid by the Seller, and the Purchaser has the right to choose the lawyer.