Guide to buying in Spain

Forget all the disaster stories. Providing you follow the rules, take proper advice from the right people, and use (ideally, English speaking) local solicitors, you shall find the purchase process a swift, safe and entirely stress-free experience. You will need to allow a further 10% on the purchase price, to cover all legal, taxation and other associated expenses.

Once you have found your ideal property you will need to pay a Reservation Deposit of (usually) €3,000. If you embark on a viewing trip with serious intentions, then please check with your credit card company that this transaction can be accommodated, before you leave the UK, as most agents can process this payment this way. This initial deposit is important, as it freezes the price, as agreed, and the vendor is obliged to remove the property from the market. One can usually make this deposit conditional on a satisfactory survey or mortgage application, and in any event it should be subject to satisfactory enquiries by your solicitor.
This arrangement is usually good for 2 – 3 weeks.

It is usual for all kitchen and laundry appliances to be included in the agreed price, and often the furniture and fittings are included too. It is our policy to prepare and agree a full inventory, at this stage.

Also at this point, we arrange to personally take our clients to Benidorm to apply for their NIE (fiscal) registration, introduce them to local, recommended solicitors, banks, currency exchange specialists etc. and offer guidance on local doctors, health facilities, and any other relevant issues or concerns.

Our recommended solicitor sends our clients a comprehensive ‘Client Care’ letter, outlining the whole legal procedure, a breakdown of all costs, guidance on Spanish wills, and confirmation of the cost of local utility bills appertaining to the purchase property.

Once all the solicitor’s searches are completed to their full satisfaction, the purchaser and the vendors need to agree a completion date (this can be varied later, by the mutual consent of both parties). We have completed sales – offer to completion – in eighteen days, equally when it has suited both parties, this period has been extended to nine months. At this stage the ‘Private Purchase Contract’ needs to be agreed and signed by both parties, and the original deposit needs to be made up to 10% of the agreed purchase price. If the buyer backs out of the deal, the deposit is lost. If the vendor reneges, then he has to return the 10% deposit, together with a further 10%. Understandably, this arrangement ensures a large degree of certainty to the transaction, which is woefully lacking in England and Wales!

The entire completion process is overseen by the local Notary at his offices. He is a relatively high ranking, totally impartial, government representative who ensures that all paperwork is 100% in order, to the complete satisfaction of the legal representatives of both parties. This can be a boring and long drawn out process, often taking a whole morning; it is not at all necessary for the vendors or the purchasers to be present – we would certainly advise against a buyer making a special trip to Spain, solely for the purpose of attending this anticlimactic event. At a modest cost of around €70 one can grant their solicitor Limited Power of Attorney to deal with this, in their absence, but this needs to be put in place during an earlier visit – we can arrange this.

At or before the time of completion the solicitor will ensure there are no financial encumbrances or obligation attached to, or transferred to, the property. They will arrange the transfer of all utilities and amend all local authority records relating to the new change of ownership. It is the convention, here in Spain that all such regular payments (including credit card monthly settlement) are debited automatically from your Spanish bank account. We can usually negotiate free banking for our clients, if using one of our recommended local banks.

Mortgages are available here, at very keen rates of interest, of up to 70% for residents, 60% for non-residents, for terms of up to 75yrs. We will be pleased to arrange for locks to be changed, if required, and for the ongoing maintenance of the pool, garden and any other property related issues. We do not charge the purchasing client for any of our services, at any stage.

I hope you will agree that there is nothing at all daunting or worrying about the above procedure; it has all been carried out thousands of times without incident, uncertainty or drama, of any kind, and to the full satisfaction of buyer and vendor alike. Take good advice, and allow the professionals to take the trouble. For us it is just part of our normal routine. For your part, just RELAX and ENJOY the buying experience – Mediterranean style!

Author:  Chris Garwood – Partner, Estate Agent Moraira, Select Villas of Moraira
December 2010