Advice for Buyers

General Information before you commit to buying a property

Decide What You Want and Where

This may seem quite basic but having a list of requirements will help you identify clearly what you are after and make the subsequent process smoother. What is your budget? Do you want an investment property? Are you relocating or retiring? Do you want to live near the beach or in a specific neighbourhood? Is a terrace necessary? These are kinds of questions that you are probably asking yourself already and they will certainly help you decide and narrow down your selection.

Getting a Mortgage

If you have been looking for a property for a long time or you’re just starting your hunt perhaps the most important thing is to check if you are eligible for a mortgage (hipoteca).

The first thing to be aware of is that in Spain the transaction costs for buying a property are around 10% of the value of the property. These need to be added to the total cost.

If you are not living in Spain some international banks are able to arrange mortgages for you. Banks such as Banco Santander or Barclays that are also based in Spain can help finance up to 70% of the cost at a variable rate of up to 20 years. There are many other banks in Spain that would also consider lending you a mortgage and if you are a resident there are more options available with terms of up to 35 years available.

It is also important to know how long an individual bank will take to approve a mortgage. It is definitely worth investigating mortgage options before you even start searching and viewing flats.

Documents normally required by a bank to be granted a mortgage are as follows:

• If you are a non-resident you must have the fiscal number for foreigners called the numero de identificacion de extranjeros or NIE (more information here).
• Work contract
• Last 3 months payslips
• Previous months bank statements
• Pre-agreement with the seller
• Proof that the IBI Property Tax has been paid
• All property titles
• Outstanding mortgages and loans
• Information on assets held

In addition to this, you will also need to have a mortgage survey conducted to assess the property in question. This is paid for by the borrower/buyer and costs between 400-600€. This survey should be carried out by a registered valuer (tasador). They assess the property itself, its location, local amenities, and other factors that are relevant to the valuation. The bank loan is guaranteed according to the results of the evaluation and therefore the pertinent aspects of the property. Since the tasador is usually an architect they can also evaluate the structural condition of the flat which may be useful even if you do not need a mortgage.

Viewing Properties

After you have browsed and found a property you like on our website you can contact us at anytime. We will then try to arrange a visit at your earliest convenience. Both during and after the viewing we will be ready to answer any questions you have about the property and surrounding area. It is advisable to spend some time in the local area yourself to get a good feel for it.

Legal issues and checks on the property

It is highly recommended that you have an independent lawyer (abogado) who can assist and advise you on any legal aspects related to the property you are intending to buy. The “nota simple informative” from the Land Registry (Registro de la Propeidad) will contain the following (public) information about the property. This should be checked by your lawyer:

• That the property is owned by the seller.
• It is free from any debts which could include the mortgage, community charges, and Property Tax or IBI (Impuesto sobre bienes imuebles), and is not affected by any urban planning reform.
• The property has been correctly described regarding size, boundaries, and location.

Process

When you have found your dream place you will want to make an offer. It is important to provide as much information on how you are to finance the purchase and the likely timeframe involved. For this reason it is helpful to have consulted mortgage possibilities beforehand. There are 3 main stages in buying a property in Spain.

1. Reservation

To secure your property a reservation or ‘reserva’ can be made. This is a mutual agreement between buyer and seller and is usually in the region of 3000€. It means the property is then taken off the market and shows that you are serious about buying. This is then deducted from the final price of the property once an agreement has been reached. If the buyer decides not to follow through with the purchase they are liable to lose this reserve.

2. The Private Contract

The Contrato Privado de Compraventa is the exchange of preliminary private contracts once an agreement has been reached. This states the agreed price, any other important aspects to be included in the sale, and date of completion. The essence of this contract is that both parties agree to the obligation of buying and selling after a certain period of time has elapsed. This is normally within 2 weeks from the offer being accepted. Your lawyer should check the condition and status of the property as described above to make sure it is free of any outstanding debts. At this stage you have to pay a deposit – usually 10% of the purchase price. This contract should contain the following:

• The purchase price and fees and who should pay for these fees
• A full description of the property
• The size and boundaries of the property
• Details of the buyer and seller
• Other aspects of the property that are included such as fixtures, furniture, etc
• Details of your mortgage and the date it will be offered as well as the date of completion
• The specifics of any penalties incurred if the purchase is not completed

Once this is completed the vendor must transfer the property to the buyer. Likewise the buyer is obliged to pay the agreed price. If the vendor pulls out the buyer is eligible to receive double the deposit paid.

3. Completion – The Final Contract

The Escritura de Compraventa is the signing of the deeds to the property. Here the remaining price (-deposit) and associated taxes and costs must be paid. All parties visit a Notary (notario), a public official who witnesses the signing of the legal documents. At this stage the purchaser will normally receive a copy (copia simple) of the escritura and the original is sent to the tax office and land registry. The registration of the property at the land registry may take a few months to be completed and once this is done you will receive the authorised public deed of conveyance called the Escritura Publica.  That’s it. You will now be the proud owner of your new property in Barcelona.

 

Breakdown of Fees, Taxes & Costs

1. Lawyer’s Fees – Hiring a lawyer is optional but highly advisable. Normally expect to pay 1% of the total sale price (plus 18% VAT).

2. Notary Fees – These are around 400€ but can be higher.

3. Surveyor’s Fees - These are variable but could range from 400€-600€.

4. Agency Fees – There are NO agency fees.

5. Land/Property Registry Fee (Registro de la Propiedad) -

6. Property Transfer Tax (Impuesto de Transmisiones Patrimoniales (ITP)) – This is 8% of the value of the property.

If you are buying a new property additional costs like VAT have to be paid.