The Buying Process
The purchase process is slightly different depending on if the property
is existing (resale) or an off-plan new development. Both are secure processes
if done through a lawyer.
We can recommend and arrange both lawyers and different mortgage option for
you.
Resale:
Step 1: Make an Offer
When you have found a property that you prefer we will advise on a realistic
offer.
Step 2: Pay the Reservation Deposit
It is usually advisable to pay a reservation deposit, that average from 6,000
euro (plus 7% IVA) for a lower priced property to a larger, negotiable
figure for higher budgets. This deposit is to secure the property
at the agreed price. Should you then change your mind, for no particular reason,
100% of the deposit can be withheld by the seller. This is to cover the
seller’s inconvenience of having missed the opportunity to find another
buyer or having started to plan the move himself. Should however, the seller
changes his mind the whole 100% is refunded to you.
Step 3: A Private Purchase Contract
This is a legal contract which will be prepared by lawyers, usually within
3 weeks of paying the reservation deposit. It is your commitment
to buy the property and normally a deposit of 10% (plus 7% IVA) will be required.
While preparing the contract the lawyer will conduct searches to establish
property ownership, land registry, freedom from debts etc.
Once this contract is signed and the money paid, there will be no money refund
if you should change your mind, unless the lawyer later discovers a problem
with, for instance the property ownership. Should however, the seller changes
his mind, the money will be refunded.
Step 4: Signing the Title Deeds
This is called the ‘escritura’ in Spain and is the full
and legal title of ownership. It will usually be ready within 2 to 4 weeks of signing
the Private Purchase Contract depending on whether there are more extensive
searches needed, like when buying land from a number of owners.
The signing will be done with your lawyer present and in front of a Notary,
an official of the state, who will check all aspects of the purchase and
ensure you fully understand and agree to all details. Before signing, the
remaining balance has to be paid as well as Notary fees, land registry costs
and anything else due.
New Developments:
Step 1: Select a Property
When you have chosen a particular development, we will help you select the
most appropriate unit. Whether it is for your own use, rental or re-sale,
it is important to consider the cost per sq meter, orientation, views when
the development is complete etc.
Step 2: Pay the Reservation Deposit
The same process as for Resale
Step 3: A Private Purchase Contract
The percentage can vary with the different developments. 30% plus IVA is
most common. Sometimes stage payments are due at specific points of construction,
like when the roof is put on. The lawyer will ensure that bank guarantees
are in place so your payments are fully secured. In other respects the
same apply as for resale.
Step 4: Signing the Title Deeds
This will take place at the completion of construction, normally 18 to 24
months from start of construction. You will view the property before signing
for ‘snagging’. The signing will be the same as for resale.
If your strategy is to sell before completion, to realize the profit between
the pre-construction price and current price, we will plan the resale with
you and the new buyer will do the completion.
Some key tax and cost issues:
It is always important to go through the full tax and ownership options
before acting. Here are some basics to keep in mind:
