Document background
The Real Estate Reservation Agreement is commonly used in German property transactions as a preliminary step before entering into a binding purchase agreement (Kaufvertrag). It serves to formalize the serious interest of a potential buyer while providing the seller with a commitment through a reservation fee. This document is particularly valuable in situations where parties need time to arrange financing, conduct due diligence, or fulfill other conditions before proceeding to the final purchase. While not requiring notarization like the final purchase agreement, it must still comply with German civil law requirements and typically includes details about the property, reservation period, fee arrangements, and conditions for proceeding to or withdrawing from the final transaction. The agreement is especially relevant in competitive property markets where buyers need to secure their interest in a property during the preparation phase of the transaction.
