“Step by step guide – Buy a property in Spain”
Finding a property
When finding a property in Spain you need to choose a real estate agency that you can trust, this is due to the fact that in Spain no license is required to work as a real estate agent, so anyone can start a real estate agency. Another main difference of the Spanish real estate market compared to most other European countries is the multi-listing network where the real estate agencies share their listings with each other, and the owner often put their property for sale with various real estate agencies at the same time.
This means that you can choose one agency for your entire property search. This saves you time in having to explain for different agents what you are looking for. If you choose one agent, him or her will be able to get a good understanding of what your needs and preferences are for the home you are looking for.
At Christensen Estates we collaborate with all Major Promoters and Developers, most banks and over 800 other Real Estate agencies. This means we can show practically any property for sale on Costa Del Sol. There is no additional cost for the buyer when purchasing a property from one agency or another. The listing agency splits his commision, paid by the vendor, with the agency representing the buyer. The developers and banks reward agencies with a referral fee.
If you think that Christensen Estates could be the right Real Estate agency for you, we suggest that you contact us and tell us what you are looking for. We will then allocate an agent to you who will start sending you suggestions and thereby be able to understand your criteria in order to prepare for a viewing trip where properties of your liking will be shown.
When you have found the property you are looking for, a reservation has to be made in order to take the property off the market. Conditions such as “subject to mortgage” can be added to the reservation, however the vendor has to accept any condition added in order for this to be accepted. We recommend that in the case you will apply for a mortgage you will already have been talking to your bank regarding this before making a reservation. In case you will apply for a mortgage with a Spanish bank we can help you with a free and unconditional pre-approval of a mortgage from a bank.
When making the reservation a deposit of typically 6000€ will be paid either to our client account or to a lawyer of your choice. To ensure the property purchase goes through rightfully it is necesary to use a lawyer.
At Christensen Estates we can recommend various lawyers speaking most European languages, that we have been working with previously. But the final choice of a lawyer is always up to you.
After the reservation of the property the lawyer will start conducting “Due diligence” on the property, which means that all legal aspects of the property will be checked including registry, debt in the property, the vendor being the rightful owner, property being legally constructed with no illegal reforms etc., and if the building is in acceptable condition.
In case your lawyer will find any legal impediments on the property and you decide not to continue the purchase, the deposit will be refunded.
Power of Attorney
When having found a lawyer of your choice, it is recommendable to give your lawyer power of attorney in order to act on your behalf in the property purchase. This also means that in case you do not currently live on Costa Del Sol your lawyer will be able to sign the Private Purchase contract and the Title Deed without your presence. However, a lawyer will never take any steps without your approval. A Power of Attorney is held in front of a notary and it typically costs 80€.
The Private Purchase Contract
If you decide to continue the purchase after the due diligence process, the deposit will be used towards the downpayment when signing the private purchase contract, which is typically 10% of the purchasing price of the property. This normally take place two weeks after the reservation.
Your lawyer will prepare the Private Purchase Contract for the property. In case the property is fully or partially furnished an inventory list has to be done. When the Private Purchase Contract has been signed by both parties, the vendor will be obligated by law to pay back the double amount in case he regret to sell the property.
The private purchase contract states the legal property details, the agreed terms and conditions, and the completion date of the public title deed.
Completion of the Public Title Deed
The completion of the public title deed is held in front of a notary, where the buyer and seller will be represented. The remaining price of the property is to be paid and the keys will be handed over to the buyer. The property is now in legal possession of the buyer. Usually the completion of the public title deed takes place one to two months after signing the private purchase contract.
The Buying Costs
You can find the estimated costs of buying a property in Andalucia down below. In Spain the taxes vary depending on each region. In general you can expect a total between 11.5-15% in Andalucia. The percentages may vary depending on the price and type of property.
|8- 10%||8% transfer fee on re-sales properties and 10% VAT on new sales properties|
|1%||Fee to lawyer, includes due dilligence, setting up NIE numbers, Spanish bank acount, Water and Electricity etc.|
|1.5%||Stamp Duty, a tax charged to make documents legally effective.|
|1-1.5%||Establishing costs of mortgage.|