Buying Procedure
Your Quick-step Guide to Buying a Property in Spain
Buying a property in Spain, be it as a main home, holiday home, or as an investment should be an exciting time in all our lives. Many of us have dreamed of owning a beautiful home in the sunny, warm climate of Spain. All too often, many buyers get caught up in the dream and fail to fully understand the buying basics and the complete Spanish purchase process. As a result, buyers are often confused, wishing they had the right knowledge and guidance from the start.
The VIP Naked Agent booklet is designed to give you a transparent overview of the entire process, ensuring that buying your property becomes a simple and efficient task. This guide highlights the details from doing your initial budget and property research, right through to completing on your property and getting settled in! If you have not received a copy of the “Naked Agent” please email us at Hola@vipespana.com and we will send you a PDF version.
The Purchase Process Recommendation:
- Step 1: Do your initial research:
Do some basic online searches to understand the area of preference that suits your criteria. When choosing an agent, check that they are based in the area you want and most importantly they are the listing agent. If you use a third-party agent, this may affect your negotiating power. Always open email communication in advance as this will help the agent offer advice for you consider. Remember in Spain to allow purchase costs on top of the agreed price which is approx. 11% overall.
VIP Almeria cover the Eastern Coast so please see a list of the areas on the following link:
http://www.vipalmeria.com/almeria-area-information.html
- Step 2: Decide on your main criteria as this is a personal choice:
Is the property for investment or personal use?
Do you want a ready-built property or something off-plan?
Calculate your approximate budget (to include the purchase and mortgage costs if applicable)
- Step 3: Understand your budget and affordability:
How much of your own money do you have, or do you want to put in to buying a property?
Calculate your net real monthly income as the bank will request this information if requiring a loan / Mortgage.
Understand how much mortgage you can afford and obtain. Contact banks / broker for specific mortgage advice.
Calculate your real budget and plan within your means, for more information on mortgages and banking, please go to this page:
http://www.vipalmeria.com/mortgage-faqs.html
- Step 4: Do your detailed research
Conduct detailed online property search via property Portals.
Speak to or email real estate agents, are they registered as a company? Vision Investment Property Almeria is VAT / CIF registered in Spain (Number B04833737) & inscribed in the "Registro Mercantile de Almeria" http://www.vipalmeria.com/who-we-are.html
Possibly attend property exhibitions in your home country. VIP Almeria and VIP España continue to promote the idea of overseas home ownership to a British and Irish audiences and we attend yearly shows of at A Place in the Sun Live . http://www.vipalmeria.com/see-us-on-a-place-in-the-sun.html
- Step 5: Organize to view your properties
Select specific properties for viewing by email. Ask questions, a good agent will see the thread in style and type of options you are selecting. Please don't choose according to price as this can affect your shortlist. If you need to compromise to buy in one location over another, decide prior what is the most important.
Plan your viewing trips accordingly. A good agent will offer you a meeting point and book in viewings in advance, so you know how much time you need. Remember to spend time in the area. A property is key to the lifestyle you will live here.
Allow time in your visit to make a shortlist and view properties again if necessary.
- Step 6: Find the right property
Ask the real estate agent detailed questions, the paperwork is on file with the listing agent, so you can make an informed decision.
Understand initial payment terms & total costs before submitting an offer.
If an offer is agreed, then, engage independent solicitor / Abogado to work for you.
- Step 7: Engage a lawyer to do your initial property checks and consult a mortgage broker / bank to ensure you can obtain the mortgage you require
Lawyer to run important property checks
This is known as the Decree 218 http://www.vipalmeria.com/decree-218.html
If required, the legal can accept POA to apply for your NIE certificate and open a bank account
See Link: http://www.vipalmeria.com/nie.html
The initial offer to reserve will be drafted and signed by all parties. This information is used for the PPC. (you will be asked to pay an initial holding deposit at this stage to take it off the market)
Confirm final price & deposit amount, agree terms and conditions (negotiable between buyer and seller) & set an estimated completion date in writing.
- Step 8: Private Purchase Contract (PPC)
Once the legal have ensured all property checks are in order and the property title can be transferred to you, free of debts, tenancy and encumbrances, this is the 10% stage.
The information of the initial offer is used, and this is where exchange of contracts occurs. We advise clients to have an Annex showing a list of any furniture, fixtures or fittings that are to remain with the sale.
Step 9: Pay the balance of the 10% deposit and sign the private contract under legal guidance. This must always go via your legal client account.
Typical deposit is 10% of the agreed sale price, payable in two stages:
- Pay initial holding deposit (€ 3000) and sign initial reservation contract.
- 10 to 30 days later, sign private contract (if necessary) and pay balance of deposit Stages 1 and 2 can combined.
Deposits are normally considered non-refundable. In some cases, you can pay a deposit earlier subject to all the property checks being in order. VIP Almeria always insists that the deposits are made via your legal client account.
- Step 10: Formalize mortgage finance (if needed)
Ensure bank conducts property valuation Await banks formal mortgage approval and ask for the binding offer letter.
Get it in writing IF YOU HAVE ANY DOUBT OVER GETTING THE MORTGAGE AMOUNT YOU REQUIRE, ENSURE YOU GET FORMAL MORTGAGE APPROVAL BEFORE PAYING A NON-REFUNDABLE DEPOSIT
- Step 11: Prepare for completion
Get complete breakdown of funds for completion from lawyer. This is important that you are clear and relaxed with the process. Please always include your legal representative to communication with the agent so everything is transparent.
Ensure mortgage funds from your lending bank are in place transfer own funds to Spain either to your own bank account or Solicitors client / escrow account
Ensure you have the correct documentation in place to fix a completion date at Spanish Public Notary or Via POA (Power of Attorney).
All documents will be sent for completion to the Notary at least three days before the completion date. This will form the new deed of title transfer.
- Step 12: Completion
Organize banker's drafts for balance owed to seller in accordance with lawyers' breakdown of funds. If a transfer is agreed in GBP for example, the Notary will need proof of transfer to oversee the title transfer. It is important that all funds paid have a money trail.
Buyer and Seller (or POA) will need to be present for completion at notary or leave Power of Attorney with lawyer Sign Title Deeds and hand over checks Keys handed to you - congratulations!
- Aftersales: Get settled in
Your legal will arrange to connect the utilities (water, electricity, gas, telephone line, etc.) in your name, and sort out your furniture Register the rates / council tax (IBI) in your name which is why you need a Spanish bank account for direct debits. Please note that you need to get Home & Contents Insurance!
VIP Almeria is the only estate agent in Mojacar that is accredited with the exclusive “Safe Purchase Brand”. Giving you much more than other estate agents when purchasing your home in Almeria: A Certified extra property protection guarantees for the next 20 years.
See Link: http://www.vipalmeria.com/title-deed-insurance---safe-purchase-guarantee.html
To understand the whole purchase process in more detail and to find out how to be an informed buyer, please contact us: Hola@vipespana.com