Buying any property is without doubt one of life´s most difficult financial decisions so it goes without saying that buying in another country can be even more daunting but it can be made simple if you surround yourself with the right people.
First and foremost, we strongly recommend appointing a reputable Lawyer or Abogado from the outset to offer impartial, professional and honest advice throughout the process. Your Lawyer will assist you with your applications for an NIE number (Numero de Identidad de Extranjeros, a tax identification number) and the opening of a Spanish bank account, both legal requirements for ownership of a property in Spain and also necessary for dealing with utility companies and should you wish to purchase a car. Ask family or friends for recommendation if they have had personal experience or alternatively Jackson Grundy are more than happy to help with suggesting a selection of good lawyers for you to choose from if you should require.
Secondly, choose a good Real Estate Agent. Remember that in Spain there is no need to register with each and every agent, and there are over two hundred on the Costa del Sol, as most are members of a multi listing service which allows us to offer one another´s properties. At Jackson Grundy we not only search our own portfolio of properties but have access to thousands of properties up and down the coast. By registering your details with Jackson Grundy you are, in effect, registering with over 200 agents with only one point of contact saving you from endless calls, repeating the same information time and time again.
Once you have found the perfect property, you will complete a reservation contract detailing your full names and those of the vendor, the address of the property, the agreed price of the property along with any other special conditions agreed, a date to sign a private purchase contract and be asked to make payment of a refundable reservation deposit (typically circa €6,000) which can either be held in our client account or preferably with your lawyer. This deposit ensures that the property is taken off the market for an agreed period whilst your lawyer conducts due diligence, carrying out all the necessary legal searches – confirming that the seller owns the property being sold, there are no mortgages or charges and that all planning consents are in order. The reservation deposit is fully refundable during this time in the event that your lawyer should discover any legal impediments pertaining to the property.
Once all the searches have been satisfactorily carried out, the lawyers will draw up a private purchase contract to be signed by both buyer and seller detailing a date for completion, similar to exchanging contracts in the UK. On a resale property, you will be asked to pay a non-refundable deposit normally of 10% of the purchase price on exchange of contracts. If you are purchasing a new property the developer will generally require a deposit of between 20% and 30% (plus the 10% IVA on that payment) of the purchase price property to exchange contracts, although this percentage can vary from development to development. There may also be additional stage payments to make during the construction period, again depending on the terms of the development.
Finally on the day fixed for completion, your lawyer will go to the Public Notary to sign the Title Deeds, making the final payment to the vendor’s lawyer, who will simultaneously pass over possession of the property to you, handing over the keys. At this stage, the sale is complete and immediately your lawyer will have the original title deed submitted to the Land Registry for registration of your title. Your lawyer can also arrange for the transfer of utilities and services such as water and electricity, into your name, and organise their payment through your Spanish bank account.
With a new-build property obviously completion can take a lot longer, the payments are split over stages of the build process and the developer should provide bank guarantees against each payment. This protects your payments in the event the developer fails to complete the property or goes bust.
Purchasing a resale property in Spain will involve the following expenses: