An Introduction to the process of Property Purchase in Spain …
Once you have found a property you want to buy, the first step is to put in a verbal offer. If you are offering below the asking price, it is advisable to let your agent know how flexible your offer is as they can negotiate on your behalf. Remember, making a silly offer that is too low may jeopardise further negotiations
Once your offer has been verbally accepted, it is advisable to appoint a lawyer.
However, should you wish to make initial enquiries yourself, we recommend the following:
- Obtain a copy of the Nota Simple form the Property Registry Office. This document identifies the owner of the property and provides details of any outstanding mortgage or embargoes on the property.
- Request receipts for IBI (impuestos sobre bienes inmeubles) payments which will show the valor catastral of the property. Your local taxes and annual property income tax are calculated on this rate.
- If the property is in an urbanisation or part of a community, ask the administrator or president for copies of charges paid.
- If the property is a new build, obtain a copy of the “declaracion de obra nueva” and, if applicable “declaracion de alteracion de bienes naturaleza urbana”.
In order for the property to be taken off the market, you will be required to pay a small holding deposit (this amount is negotiable between agents). At this point, your lawyer will prepare a formal offer and agreement contract.
Once the lawyer has conducted all the relevant searches on the property, usually around 2 weeks after the holding deposit has been paid, the exchange of private contracts (contrato privado) takes place. The private contract sets out terms and conditions of the sale, including the agreed price and a completion date. It is normal practice to pay 10% of the selling price at the time of signing this contract.
Once this contract has been signed, by law, if the purchaser withdraws, any deposit paid is lost. It is also not unusual for clauses to be added to the private contract that should the seller withdraw, then twice the paid deposit should be paid to the purchaser. Ensure your legal representative explains these clauses to you.
On the assigned day, the purchaser and seller (and/or their authorised representatives) are required to be present at the Notary office to sign the title deeds (escritura de compraventa) and if a mortgage is required, the bank manager will be present to also sign the mortgage deeds (escritura de hipoteca). The role of the notary is not to check the content of the deeds, but merely to confirm that all parties have agreed to them. For this reason, it is advisable to request a copy of the deeds before going to the notary and have them translated and explained to you. one important factor is that the deeds must state that the property is sold “free of charges, mortgages and tenants” (libre de cargas). Upon signing the deeds, the balance of payment is made and the purchaser takes possession of the property.
If you would like to know more about property purchase in Spain, just contact us. We are here to make it easy for you!
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