Stress Free Buying

People buy properties here in Spain for many, many reasons. Some are looking for a permanent move, some a holiday home, some for retirement and some for investment purposes.
The lifeblood of any property market is the first time buyer. Without these buyers coming in at the bottom end of the market to buy the smaller studio and 1 bedroom apartments there would be no movement for second and third time buyers up the property ladder.
Whatever the reason for your interest in purchasing a property in Spain, this information produced by the Federation of British Estate Agents in Spain will provide you with some useful information and guidance.

Confirm your finances

Know what your budget is and stick to it. If you need a mortgage to buy the property of your choice make sure you have it agreed in principle before you start looking. Be aware of the extra costs involved in the purchase plus the hidden costs such as moving, insurance etc.

Make a wish list

Buying a property is almost always a compromise of one sort or another, so be sensible. Split your list into “must have” and “nice to have”. Try to stick with your list. Don’t waste your time looking at properties that don’t fit your list. Some things you might like to consider:

• Price
• Type of property: Villa, townhouse, apartment, Finca, etc.
• Location: Town centre, coast, country, village, etc
• New or old property
• Parking requirements
• Private or shared pool
• Number of bedrooms
• Room for expansion required
• Number of bathrooms
• Schools
• Health centres – hospitals
• Public transport
• Shopping, banking etc.

Of course there are many other things to take into consideration when choosing your property, but if you can make your wish list available to your FBEAS agent it will help him to find suitable properties for you to view.

Do your homework

Research the areas you are interested in. Use the internet, local papers and real estate publications to investigate prices and housing styles in different areas.  The internet is particularly useful if you are moving between towns.

Decide where you want to be

Take into account:

• Situation
• Affordability
• Public transport
• Convenience for amenities
• Schools
• Health centres - hospitals
• Suitability for your life style
• Parking
• Shopping – banking
• Neighbours

Find your FBEAS Agent

It may seem tempting to buy privately, but in every circumstance we would recommend the use of an FBEAS Member Agent, who can be extremely helpful to you the buyer. They will have the local knowledge to find the property of your choice. Additionally by using one of our Agents you will have the peace of mind and reassurance that they are fully registered, experienced and abide by a strict Code of Practice in order to protect your interests even through to that all important aftercare. Please remember an FBEAS agent will not charge the purchaser for his services, his fees being paid as a commission by the vendor
Your FBEAS Member Agent will be able to offer you a wide choice of properties to choose from. If he does not directly have your requirements, he will be able to “Network” with other FBEAS Member Agents via the Federation Property Portal to find the property you are looking for.

Viewing

Discuss with your FBEAS Member Agent the properties he considers may interest you. Make a short list and arrange to view. Depending on the number, we would recommend that you do this over a number of days. Take a camera with you, or even better a video camera and paper and pen to make any notes or comments. Be frank with your Agent, Tell him if you don’t like what he is showing you. Make a short list and if there is a property you particularly like, go back and take another look. Talk with the owner and get as much information as you possibly can. Later if you have any more questions about the property, make sure you get satisfactory answers from your agent.

Check that property

Once you have found the property of your choice, be practical. A few things to watch out for that might put you off buying:

• Traffic/airplane noise
• Access
• Structural defects (revealed by cracked window sills or walls)
• Dampness (can be detected by smell and/or mildew)
• Leaking or damaged roof
• Zoning restrictions (check with the local authority)
• Potential flooding/slipping of land
• Old electrical wiring and plumbing
• Leaking pools
• Local noise pollution
• Poorly maintained complex

Making an offer

Once you have decided to purchase a property, the first step is to make a verbal offer. This should be made through your FBEAS agent. If you do make an offer make sure you are in a position to proceed if your offer is accepted.

Appointing a solicitor

To formalize your offer you will need to appoint a solicitor. He should be fluent in your language. Your FBEAS agent will be able to recommend a suitable solicitor from an approved list.
Your solicitor will make all the necessary checks to ensure that all is in order with the property you intend to purchase, and that it is free of tenants and charges.

Holding deposit

Should you agree to proceed with the purchase you will be required to pay a small holding deposit (around 1% of the purchase price) to take the property off the market, normally for around 14 days while your solicitor makes the necessary searches.

Reservation Contract (Option to buy)

This document will be prepared by your solicitor. The document sets out all the agreed terms and conditions of the purchase, and states a date for completion. At this stage you will be required to pay a 10% deposit which is NON REFUNDABLE if you do not complete by the agreed date. Please be aware that this is a legally binding contract in Spanish Law.

Completion

On the agreed date, both parties (the buyer and seller or their appointed agents) will attend the office of the notary public. Your solicitor and your FBEAS agent will be present to explain in detail the procedure. You will sign the “Escritura de Compraventa” (the title deed), which will state that the property is sold free of debt and with vacant possession. Note that the Notary Public does not check the details of the purchase but only confirms that each party has agreed them. Payment in full is made at this stage normally via a bankers draft or guaranteed bank cheque and at this stage possession of the property passes to the purchaser.

The Costs

There are 3 fees to pay:
Solicitors fees - Normally around 1% of the purchase price.
Notary fees - Fixed by law, normally in the range €300.00 - €900.00
Property registration fees - Normally around 40% of the Notary fees.
Additionally there are 2 taxes to pay:
Transfer tax (ITP) - Government Transfer Tax -7% of the purchase price or 7% IVA +1.00% Stamp Duty when purchasing a new property from a developer.
Plus Valia - This is the local Town Hall capital gains tax, and is based on the increase in the value of the land since the property last changed hands.

Who pays what?

Apart from the Plus Valia the purchaser is responsible for the above fees and taxes. In some cases the vendor may wish the purchaser to pay the Plus Valia as well, so make sure you understand what you are paying for. As a rule of thumb, if you allow 10% of the purchase price for fees and taxes you won’t be far wrong. In any event your FBEAS agent will prepare a comprehensive estimate of the costs before you proceed.

Aftercare

Your FBEAS agent is bound by a strong Code of Practice, part of which charges him with the responsibility of aftercare. This service includes:

• Arrangement for payment of related taxes and charges
• Change of owners name with the local authority
• Change of contracts for service connections

The Member Agent may or may not charge for these services as appropriate.

Note – For the purpose of definition, where appropriate the words he/him/himself also indicate she/her/herself