Preliminary Home Purchase Agreement: What to Settle Before Paying an Advance

A preliminary agreement commits the parties to enter into a later main purchase agreement on agreed terms; it does not transfer ownership. The Lithuanian Chamber of Notaries discusses Civil Code Article 6.165, which requires written form. Article 6.393 requires a notarised form for the main real-estate sale agreement.

“Home reserved” says nothing about the agreed price, how long the seller will wait or when money is returned. Read the document and attachments: a “reservation agreement” label alone does not explain its legal effect. Do not sign blank fields. Keep changes in one final version approved by both parties.

If you are negotiating an apartment purchase in Klaipėda, a broker can help gather questions for the seller and coordinate the steps leading up to the notary.

Article 6.98(2) of the Civil Code bars using rankpinigiai to secure a preliminary agreement. This is a distinct Lithuanian legal term. A casual promise to “leave rankpinigiai” should not become an unclear payment clause. Call the payment an advance (avansas), state its purpose and how it is credited to the price, and address any contractual penalties separately.

An advance does not automatically mean the buyer forfeits it on changing their mind, or the seller must return twice the amount. The agreement, breach and circumstances matter. Before paying, check the recipient, account, deadline and payment reference; keep the transfer confirmation with the agreement.

Agree the amount in light of the transaction and the risk each side takes. A larger advance does not resolve unchecked documents or uncertain financing.

Specify exactly what the agreed price buys. An address may not prevent disputes: identify property units by their unique numbers and list appurtenances, parking, storage and items to remain. Attach an agreed furniture list and condition photographs if useful.

• Who owns the property, and who may sign for them?
• Which mortgages or restrictions must be resolved before completion?
• Which documents must the seller provide, and by when?
• Does the actual layout match the documents?
• Which known defects are disclosed, and who will address them?

Before promising to buy, use these apartment-check questions. The seller should gather the documents for a home sale in advance rather than promise unchecked dates.

A preliminary bank conversation does not settle financing for this home or the final credit decision. If buying depends on a loan, agree with a lawyer a clear condition: required amount, application deadline, evidence, and when the buyer can withdraw without agreed penalties.

Address a lower property valuation separately. For illustration, the price is €150,000, but the buyer’s approved financing and available funds are not enough. The question is not only “did the bank approve a loan?” but whether the agreed funding is sufficient and the buyer has committed to cover any shortfall.

Responsible-lending requirements changed from 1 August 2026, including down-payment requirements for qualifying first-home buyers. The seller’s advance and a lender’s down payment are different payments. Confirm your position with the lender before committing.

Set dates for documents, the bank’s decision, the main agreement, payment and handover, with a responsible party for each. This helps show whether a notary appointment is realistic and who must report a delay.

Agree how to request an extension, by when and how the other party confirms consent. Silence should not be treated as approval. A seller buying another home should not plan a second advance around payment that is not yet secured.

For an apartment sale in Klaipėda, a broker can coordinate calendars, documents and communication with the notary’s office. The broker cannot guarantee a bank decision or third-party timing.

Discuss three cases: both parties agree to stop, a withdrawal condition occurs, or one party refuses to proceed without a valid basis. For each, set the notice method, advance repayment deadline and possible financial consequences.

The advance may not be the only limit on liability. The Supreme Court of Lithuania’s explanation discusses ways to calculate losses and the need to prove them. A dispute’s outcome cannot be inferred from the advance alone.

If an obstacle arises, promptly notify the other party in writing and keep bank responses, document requests and correspondence. Give the lawyer the full agreement, not only the penalty clause. Accepting a better offer does not, by itself, resolve the seller’s existing obligations.

The notarised sale and move-in dates may differ. Before paying, agree when the home will be vacated, what stays, how meter readings are recorded and how keys are handed over. If the seller stays longer, discuss terms with a lawyer when preparing the documents.

Plan a second inspection. Compare the home with the agreed attachments, check equipment that stays and record discrepancies. If it is mortgaged, coordinate the lender’s requirements; see our article on selling a home with a loan.

Could you explain when the advance will be returned, when you might lose it and what happens if a deadline is missed? If the answer relies on a verbal promise, ask to put it in writing.

Consider the overall budget. The US Consumer Financial Protection Bureau advises comparing total borrowing costs. The UK government’s home-buying guide distinguishes valuation from technical inspection. These are planning principles; those countries’ contract rules do not apply in Lithuania.

A real-estate broker consultation can help organise open practical questions. Ask a lawyer or notary about the agreement’s legal effect and clauses.