Buying in Spain
Having spent some considerable time in finding the area where you would like to purchase, chose an agent that gives you the best information and with whom you feel comfortable. Generally, it is fair to say that the seller would place his property for sale with a number of agents in the area.
However, most quality agents would work together to pool their properties and potential clients. Therefore, when choosing an agent you will find that he would have access to most, if not all, the properties in the desired location. This alleviates the need to trawl around dozens of agents trying to find the right property for you. Why waste your valuable time when "the man on the street" can do all the legwork for you?
Once having found your ideal choice of property and an offer has been accepted, there are several things the prospective buyer would need to do to secure the purchase.
Initially, a holding deposit of between 3,000 and 5,000 euro would be required. In some cases for more expensive property this could be higher and would be determined by the seller and his agent. Once the required deposit is lodged with the agent a contract to purchase is drawn up, which would indicate the date of completion at Notary and is agreed by both parties. This is always written in Spanish as it then protected by Spanish Law. However, it is usually accepted that a translation in the native tongue of the purchaser be supplied for the avoidance of doubt on either side.
The process of purchase can usually be carried out within 4-6 weeks. If, by agreement on both sides an extended completion date is determined, then there would be a need to place a deposit of no less than 10% of the purchase price immediately after signing the contract.
Always use a lawyer for conveyancing. You would not buy a house in your own country without a lawyer so why consider buying in a foreign country without the best advice being given? The conveyancing is not expensive but could just save you a fortune if your purchase went wrong. Again, be guided by your agent as to the person or company best suited to act on your behalf.
The agent will not take a fee from the buyer; the seller is responsible for the agent's fees.
Once the contract has been signed by both parties, subsequent to the holding deposit being paid, this is then a legal, binding document. Should you need to pull out of the contract you will lose your deposit. However, if the seller decides not to sell at this point then he is legally bound to refund double the deposit paid.
Before signing a contract you should always make sure you have the funds available to complete. Either by cash, mortgage or other personal funding. You should also ensure that you are aware that the government will take 7% tax (for resales and slightly more for new properties) on top of the agreed buying price and that you have additional sufficient monies for all legal and Notary fees. We suggest you allow total of 10% on top of the purchase price of the property to cover all additional taxes and charges.
Before completing, you will need to have a Spanish bank account and you will need to have monies available in full and into your account ten days before you go to Notary. Just to explain, the Notary is similar to a judge and will make sure all paperwork is in order in able to make the deeds (or escritura) over into your name.
You will also need an NIE number for the purchase. This is a necessary requirement for any large purchase in Spain. It can be obtained from the police within a 24 hour period. It is suggested you obtain the services of a qualified representative to alleviate the need to stand in queues for hours. General cost is 75 euro per person.
Most resale properties are sold fully furnished, however in some of the more exclusive villas where the furniture is of an exceptional quality, a negotiated settlement would be required. Generally, key ready or off-plan properties are sold empty. You would need to add the cost of furnishing, light fittings, kitchen equipment and air conditioning units to the purchase price. Some agents will offer incentives to provide white goods and a contribution towards furniture.
In relation to mortgages in Spain, most banks offer up to around 70% of the purchase price but you must be in a position to provide proof of income and an Experian report. However, in certain circumstances, and in relation to bank repossessions it is possible to obtain a higher percentage rate of mortgage. Your agent should be able to advise you of this, but bear in mind that bank repossessions are usually left in a bad condition and it may be a requirement of the bank that repairs and decorations are carried out within a designated period after the issue of a mortgage. In the long run, this could cost the potential buyer substantially more money than purchasing a similar, conventional property.
When signing at notary you will then become the legal owner of the property and keys are handed over. The outgoing owner has no more rights on the property. Your lawyer will ensure all outstanding bills are paid and that the new service for utility bills are transferred into the name of the purchaser.