10 tips for Spanish property buyers.
Thinking of buying a home in Spain?
Here are ten tips to help buying a Spanish property.
Many visitors to Spain, Europe’s most popular country, dream of owning just a little slice of paradise. This is one of the most sought-after destinations for investment, young families relocating, golf or holiday property and retirement homes. So, if you, like millions of other buyers right now, are considering purchasing a home under the Spanish sun, for some sort of vacation, fun, investment or (early) retirement here are a few tips to ensure the purchase goes smoothly.
Do your homework when buying in Spain
Your 7-day trip last July may have felt like a little piece of heaven, of course it did. However, that is not enough time to tell you what you need to know about moving to or buying in Spain. The rules change here all the time, and not all agents are up to date with the current laws. If you’re buying for investment, especially for short term rental, be sure that the property is in an area where its legal to rent it. San Miguel on the Costa Blanca will not allow it, nor will Barcelona or Benidorm in many cases! If you are renting long term, you must pick a home close to amenities and facilities such as medical centre, bus route, local shops or the beach. If you’re looking a property for a golfing holiday ever few weeks, have you checked out the costs of playing, membership etc- Its changes from region to region. We advise our buyers to look beyond the postcard experience of Spain. We can help with issues like safety, medical care, schools, Wi-Fi, satellite TV, pet ownership and emergency response.
- Secure a mortgage early
Before you go searching for property in Spain, you should be aware of how your dream purchase will be financed. Do you intend to secure a mortgage? Will you do that back home or here in Spain? Will you seek pre-approval from your lender before you go house hunting? We think you should, and we can help. You can get a great deal if the seller knows you have the funds ready to go as opposed to a client who makes an offer subject to approval from the bank. Getting a mortgage from a Spanish lender varies only slightly from the banks in your home country. Just like everywhere else, you will still need to show legal documentary evidence of earnings, assets and your ability to repay the loan.
Find a real estate agent and trust them
Real estate agents working in Spain are often not very well versed on the property laws and regulations here. They will be able to help you find the dream property, but the real difficulty for you happens afterwards. You want an agent who will steer you to the shortcuts to bypass red tape, town hall hold-ups, and legal problems that can frustrate the Spanish property process. A good real estate agent will have in-depth knowledge, a large network of contacts (builders, lawyers, mortgage brokers etc) and be willing to introduce you to ex clients of hers who will give you a full recommendation. Avoid agents who are just out to make a quick buck!
- Hire a legal firm really early in the process
This is so important when buying a home in Spain- get a legal team with a whole lot of experience. People say not to work with the agent’s lawyer- we don’t mind either way. If it’s a legal firm with a reputation of honestly, they are not going to do anything to jeopardise that- in fact they are government by European law, so shortcuts are not on the agenda. Either way make sure the lawyers speak English and Spanish, have been operating in Spain for years, actually have an office as opposed to just working out of the back of their car, plus are tax compliant. When you decide on the Spanish property you want to buy, you will need to make an offer to purchase, it is prudent to have an attorney to help you check purchase contracts, deposit issues, etc. When choosing a Spanish solicitor, try and get a referral from a fellow expat who has gone through the process. A word of warning however, many expats will make a recommendation just to get a kick back from someone acting as a fiscal advisor rather than a lawyer. Make sure your “Spanish lawyer” is an actual LAWYER!
Make sure you are getting the right property
You will be amazed at the numbers of people who come to Spain to buy a beach property end up with a golf property; people come to buy a 150,000 apartment for cash and end up with a 300,000 euro villa and a mortgage; others want a property for the kids to enjoy and buy 50 Km from the coast (with no neighbours). Don’t let your agent talk you into something you don’t want. But first you must have a good idea of what you do actually want. Sure, a private pool is a nice idea, but would you rather be walking distance to the beach for 100,000 euro? Sometimes you can’t have it all so know in advance what is most important to you and stick to your list of must have benefits.
- Get an attorney’s advice before you pay your money.
You have seen the house you love- the price is right; the location is perfect but…. The agent tells you that you must pay a deposit this second, or the property will be sold to someone else. Now is the time to relax, and not rush in. Let your lawyer first look at the deeds of the property- are there any outstanding planning/legal/ownership/ issues? Maybe if you are buying inland, you can ask your lawyer to provide information about the property to determine its true market value. We work with an engineer for example to help our clients in this respect. The survey report which he provides will determine for our buyers, the legal boundaries of the inland property and whether or not there are any encroachments. Now is the time to find out of there any problems as its east to walk away.
- Prepare for the true cost of buying your home in Spain.
Buying property in Spain does not only involve the cost of the property on the agent’s window. There are attorney’s fees, notary fees, real estate commission fees, the cost of valuation and survey, conveyancing taxes and other fees too- N.I.E. number, power of attorney etc. For example, Spain asks residents of some non-EU countries to apply for a residency permit before you can purchase land. Some area is zoned “military” in Spain and certain town halls require the buying permits to be in place before you get the keys!
- Be patient! This is Spain.
Cultural differences and government/local bureaucracy in Spain, can turn your search for a dream Spanish property into quite a long and drawn out process. The builders sometimes close for the whole month of August; One town hall requires slightly different paperwork than another; the bank is in no hurry to get your money transferred. It is important that you be patient. It is going to be worth it, but in the meantime, keep in constant contact with your agent, lawyer and be sure that things are proceeding according to plan- your plan!
- Learn about the foreign exchange rate.
Exchange rates vary greatly depending on the bank you use. Banks are here to make a profit, remember this! You should be aware of the exchange rate if you are used to spending Sterling, kroner or Yen! We work with Money Corp, Currencies direct and a few other currency providers, to save money for our clients.
Protect your new asset in Spain.
So, you have the keys to your new home in Spain? Congratulations! Now protect it- house insurance, rental licence (if you intend to buy as an investment), a good property management company are of course all important. After the purchase of your property in Spain is complete, be sure to have it included on your Spanish will. If you don’t yet have a will in Spain, now is the time to get one. You need to make sure you are up to date with your non resident tax, community fees and more too. Is the electricity set up on direct debit? Talk to your agent and lawyer about how they can help to secure your asset in Spain.
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