If you're thinking of buying a property, in Spain, you should treat the process with as much care as if as if you were buying a property back home and thoroughly research every aspect of the purchasing procedure. Make sure you're happy with all aspects and amenities of the location you choose.
However, one of the problems of buying property in Spain is that you imagine that the Spanish property industry operates much the same way as in the UK which is not the case. In fact, understanding this point is essential if you are to buy a property in Spain that is a safe and sound buy, both legally and as an investment.
There are guidelines to follow which will help you to buy Spanish property safely. Some of the most important are:
- Know the difference between 'Urbanizado', 'Fully Urbanizado' and 'Rural'. To understand these absolutely critical Spanish property terms is so fundamental that you should not even be looking at property in Spain before you know what they mean and their very serious and differing implications.
- Every Spanish property should have a Licencia de Primera Ocupación or First Occupancy Permit (sometimes known as a 'Certificado de Habitacion' or 'Cedula'). If it does not have one - do not buy it.
- Only buy a property that is easily re-saleable - so be prepared to compromise on what you want if it means buying a re-saleable property. Obviously(!), know (objectively) what is or is not re-saleable. Guidelines are available and they are very important...
- Never confuse a 'bargain' price with a sound buy. The two are not necessarily the same thing! This is as true of a property crash as it is of a boom.
- Never accept the very existence of a property in Spain as evidence of its legality - even if it has been around for a long time. The property may still be illegal, semi-legal or have huge potential liabilities.
- Always use a Spanish lawyer for your conveyancing who:
- a. Is completely independent of the seller and any estate agent.
- b. A specialist in conveyancing.
- c. Completely fluent in English.
- d. Fully and properly insured.
- e. Will put all advice in writing to you.
- Always use a properly qualified, fully insured, experienced building surveyor to survey your property - even if this means using an ex-pat surveyor. (Good Spanish surveyors specialising in house survey work are very hard to find).
- Never pay any 'black' money for a Spanish property - i.e. cash that is not shown on the Escritura (deeds) as part of the total property purchase price.
- Never be pressured, never rush and always double check what you are told - and obtain written proof if you have the slightest doubt about the truth of some matter.
Before opting to buy a Spanish property, you should consider approaching an experienced agent (English speaking for those not fluent in Spanish). Choose a reputable estate agent, who is familiar with the Spain and the Spanish laws. This way you will gain useful advice on the type of property available and get a good idea of the average price range.
It can be a good idea to book into a local hotel for a few nights, to get to know more about an area. In many parts of Spain you'll find English speaking residents in the local bars and restaurants who will be only to happy to tell you more about the region.
It can be very tempting to rush in and buy the first attractive property you see at the right price, only to realise later that the location isn't quite what you thought it was. Try to visit your chosen location at different times during the year rather than basing your decision on a week's holiday in the summer.
It is important to keep in mind that a property in a resort area though lively and with plenty to do in the summer months can become a ghost town in the winter. Likewise a home in a rural location, is beautiful in the hot summer months but during winter, could be dreary and isolated. You could feel a little cut off, so yes, it is the location that's the most important factor.
The solicitor will carry out a detailed investigation of the property including checking for correct planning permission, that there are no outstanding debts on the property (as, if there are, you would end up responsible for them) and that everything is legal and above board.
Once you have found the property you wish to purchase, the first stage of the buying process is to sign a Reservation Agreement and you pay 1-2% of the purchase price. At this point, the vendor will then withdraw the property from the market.
when your solicitor has completed his due diligence you and the vendor will both sign the Sale and Purchase contract, and you are required to pay a further 10% deposit. The contract will provide full details of exactly what is included in then sale eg the type of property, dimensions, number of rooms and any fittings and fixtures included with the property.
On completion day, you, the vendor and both solicitors sign the final contracts in the local Notary's office and the remainder of the purchase price and title deeds are exchanged.
You should expect legal fees to cost you around 10% of the purchase price, including 7% Purchase Tax and Land Registry fees plus notary and solicitors fees.
