Earnest money: the arras contract
The arras are your first real commitment of money. The document you sign here can cost you 20,000 euros if you don't read it carefully. Neither the seller nor the estate agency has an incentive to protect you — that's your job.
Types of arras
Arras penitenciales (the standard type)
Used in about 90% of property transactions in Spain. The rules:
- If the buyer backs out: loses the deposit amount.
- If the seller backs out: must return double the amount received.
Either party can walk away by paying the penalty. This is the type you should always request unless you're 100% certain the deal will go through.
Arras confirmatorias (binding arras)
More aggressive. If one party breaches the contract, the other can demand forced completion or full damages. No easy exit like with penitenciales. Avoid these as a buyer — they lock you in with no escape.
Señal or reserva (holding deposit)
Not technically an arras contract. Many estate agencies (inmobiliarias) ask for a holding deposit of 500-3,000 euros to "reserve" the property while the arras contract is being prepared. If the arras are never signed, this deposit is usually refundable — but it depends on the fine print. Read the document before paying — the agency drafted it with their interests in mind, not yours.
How much to pay
The standard is 10% of the purchase price. For a 200,000-euro property, that's 20,000 euros in arras. But it's negotiable:
- Some sellers accept 5% or even less.
- When a holding deposit converts into arras, the amount is sometimes lower (2,500-5,000 euros).
- What matters is that the amount is enough for both parties to take the commitment seriously.
Key clauses to negotiate
Financing clause (cláusula de financiación)
The most important clause for the buyer. It states that if you don't obtain a mortgage, you get the arras money back. Not all sellers accept it, but fight for its inclusion. The typical wording: "subject to obtaining a mortgage loan for at least X% of the purchase price." Some contracts require you to present formal rejection letters from 2-3 banks to recover your money.
In Catalonia, the Catalan Civil Code (article 621-49) allows the buyer to invoke a financing suspension clause almost automatically, even if it's not explicitly written in the contract.
Deadline (plazo)
This sets the final date by which the notarial deed must be signed. The standard is 2-3 months from signing the arras. Less than 2 months is risky if you haven't started the mortgage process. Avoid agreements that fix an exact signing date — negotiate a maximum deadline instead. Banks don't respect your dates.
Property description
The contract must include the complete cadastral reference (referencia catastral) of the property. If the property includes a garage space and storage unit, make sure these are also listed. Buyers have had problems when the garage had a separate cadastral reference and the seller refused to include it in the arras.
Property condition
Specify that the property is delivered free of charges (libre de cargas) and current on all payments (community fees, IBI property tax, utilities). If the seller has a mortgage, it should state that it will be cancelled with the sale proceeds.
Arras without an estate agency
If buying directly from a private seller (particular), you draft the arras together or with help from a lawyer. Spending 200-300 euros on a lawyer to review the contract is worth it. Contracts drafted by estate agencies tend to protect the seller and the agency more than the buyer. That's not a coincidence — they wrote them.
What happens if the bank rejects your mortgage
If you didn't include a financing clause and the bank denies your mortgage, you lose the arras deposit. No exceptions except in Catalonia and in very specific circumstances. Don't sign arras until you have at least a reasonable (though not final) pre-approval from one bank.
The arras and the provision of funds
A frequent question: if you're getting 100% financing and your savings just cover taxes, where do the arras come from? The arras are deducted from the purchase price on signing day. If you bought for 200,000 euros and paid 20,000 euros as arras, the bank transfers the remaining 180,000 euros to the seller. You don't pay twice.
Note: this guide is not legal advice. If you have questions about a specific arras contract, consult a lawyer before signing. Based on real experiences reported in online mortgage communities, 2024-2026.