The Buying Process
Having found the right property and agreed the price and terms, you will normally have to pay a 'deposit or reservation fee' in order to have the vendor withdraw the property from the market. The amount of the fee depends on the price of the property in question, but anything from 3000 - 6000 Euros is normal. At this stage it is prudent to apply for your NIE number, without which, anything of significant value cannot be purchased in Spain.
Next step is to make a private purchase contract. This is normally 2-4 weeks after the reservation payment. This allows the purchaser's legal representative sufficient time to carry out the necessary searches.
You will then be required to pay the balance of deposit which is equal to 10% of the purchase price. The contracts are normally in Spanish with a translation into your native language, but your lawyer will ensure that you have a full understanding of the contract and the process.
Completion Finally on the appointed day (usually 4-6 weeks from making the deposit), your Agent and Lawyer will accompany you to the Notary Office for the signing of the ''Title Deed'' (Escritura). You will make the final payment to the Vendor who will simultaneously pass over possession of the property to you, handing you the keys. The Notary will pass the details of the new Title Deed to the Land Registry who will record the details of the new owner.
Fees and Taxes If you are buying a resale property, then a Transfer Tax of 10% will be charged.
Other fees will be charged for the Notary and Land Registry; these fees are based on a sliding scale depending on the price of the property (about 0.5% for both). Your Lawyers fees (0.5 - 1.0%) will also be payable at completion, although many lawyers work with a fixed fee.
It is wise to budget for 12-13% (if you buy without a mortgage) and 14-15% with a mortgage.
It is advisable to instruct an independent lawyer to advise you through the legal process of buying. For most people, buying property is one of the most important investments ever so; therefore, using a lawyer will then be a kind of insurance that nothing goes wrong.
Your lawyer should check the following for you:
A lawyer will be sceptical towards everything that has not been documented and not least know how information on the property can be controlled. So, my advice is to use a local lawyer, i.e. a lawyer that is familiar with the Spanish rules for property sales and who has knowledge of local conditions.
Don't use the vendors lawyer, even if it is just for assistance regarding technical conditions.
Villa Lingo can recommend several lawyers and know which of them speak your native language to enable you to have a full understanding of the process.
Finance & Mortgages Through years of dealing with various banks and financial institutions we are able to obtain preferential rates and no cost money transfers.
With interest rate as low as 2%, Spanish mortgages are far more attractive than many other European countries. The borrowing criteria is similar throughout Europe with mortgages arranged for up to 70% of the property valuation.
Documentary evidence of proof of income and other property investments are necessary.
Our experience is that many Spanish banks offer a far better service than their counterparts in the UK, and we will happily introduce you and help you open an account.