Buying a Property
Purchasing a property in a foreign country can be daunting, however with our help and expertise we aim to make this the easy and stress free process.
It is true that the Internet has become the most useful tool for those looking to buy properties and a net-based property search is usually the first step taken by any potential buyer. However keep in mind that it is still over the internet and there are some fraudulent websites. Some websites do not even identify themselves correctly, have no office address and not even a landline telephone number (in this region these start with either 951 or 952).
Google is a great tool for finding properties, but it is the second step you take which is probably the most important decision made in the whole buying process. Establishing a relationship with an established, reputable agent, who has in-depth knowledge of the area you are looking at, is essential. The right agent will help you through the process of looking for your property and they can share their market knowledge and give you great advice on the area. If what you are looking for is not in their inventory, they will go out and find the property for you through colleagues in other agencies on a commission-sharing basis. A reputable agent will not charge you a commission or “Finder’s Fee” as they receive their remuneration from the seller.
Negotiating a purchase
A good agent will also be immensely helpful to you in negotiating the purchase of a property you are interested in buying. It is important to remember that if your offer is too low it will not engage the seller’s interest, and might actually prove counter-productive.
An articulate offer will generally capture the attention of a vendor and we recommend that you make your offer in writing if possible (of course, subject to contract). Points to include are not only the price, but also the deposit amount and when you are prepared to pay it, when you are prepared to complete the transaction, what you understand to be included in the price (for example furniture and fittings if applicable) , if you have a second choice you should certainly advise the vendor of this fact.
The Buying Process
Reservation or Holding Agreement
Once you have found your ideal property and you have come to an agreed price with the vendor, then the next step is to reserve and remove it off the market. This is achieved by making a reservation or holding agreement along with a fee of € 6,000 to € 10,000 being paid to your lawyer. This reservation agreement will hold the property, removing it from the market while you and your lawyer start the due diligence process. This fee is fully refundable pending due diligence checks.
Private Purchase Contract
Around 30 days after the reservation agreement a private purchase contract will be signed and a 10% payment made to the lawyer, less the reservation fee. The private purchase agreement would provide details such as legal description of the property, purchase price, form of payment, date of completion, etc. Of course this 10% is only payable upon the full satisfaction of your lawyer that the full due diligence has been completed and that there are no liens and encumbrances. New properties from developers are paid over the construction period, and all payments on account before completion must be guaranteed by a bank or insurance company. If the property is not finished by a certain date, a purchaser has the right to reclaim the monies paid plus legal interests.
Documentation and Banking
Once the purchase process has started you will be required to get a NIE (an identity number issued to foreigners) which your solicitor will help by making an application to the local police station with a copy of your passport. The NIE will be used by the notary when completing the sale and by the bank when opening an account. As mentioned above if you are intending to buy a resale property it is always a good idea to sort this out as soon as possible in order to strengthen your negotiation power.
Once the remaining balance has been paid the seller will issue the public deed of conveyance to the purchaser, free of liens and encumbrances. The deed is issued before a Spanish notary and then passed from the notary to the tax office to be assessed for Tax Transfer to see if the property is a resale (second hand property) or assessed for Stamp Duty if the property is sold directly by the developer. It is then presented to the property registry for inscription (there is a provisional inscription made immediately upon the issuance of the deeds).
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