Guide for Buying or Selling
Buying Property in Spain
Land Registry Searches
Your lawyer will perform a land registry search to confirm the status of the title to the property and if the property has any charges and/or encumbrances.
Professional and personal advice
Your legal firm will then advise you of the most advantageous vehicle for acquiring the property; i.e. through a national or foreign company, in your private name, jointly with your spouse etc., how to transfer the funds correctly in order that they may be later repatriated when you sell, and will help you apply for your fiscal number to enable the property to be registered in your name.
A reservation document allowing you to secure the property by paying a small deposit may often be required by the vendor. This deposit is normally non-refundable, therefore should you change your mind concerning the property you would lose your deposit. This deposit effectively fixes your agreed purchase price and takes the property off of the market.
Once you have paid you deposit and signed the reservation document you will be expected to pay a larger deposit, usually 10% of the purchase price, within a reasonable period of time (7-10 days). At this time, your lawyer will draft a private purchase agreement which reflects all the conditions of the purchase.
Escritura / Title Deed
Once all of the searches and checks are complete, a new Title Deed (Escritura) will be drawn up for signature before notary, who will previously, on the instruction of your lawyer, have gained a certificate from the Land Registry that the property is free of charges. Once signed, this deed will be sent by the Notary to the Land Registry who will immediately make a preventative inscription in your name, thereby ensuring no charges relating to the previous owner can be made against your new property.
Power of Attorney
If you are unable to attend the final transaction, you lawyer will advise you how to obtain Power of Attorney in your country of origin.
Legal Fees Explained
Apart from the purchase price of the property, you must take into consideration the costs involved in the transaction. These include:
- Transfer Tax or VAT, depending on whether it is a new or re-sale property.
- Notary's Fees. These will depend on the value of the property/transaction.
- Land registry fees.
- Stamp duty which is 1% of the value of the property/transaction.
- Municipal Plusvalia Tax. A tax on the increase in the rateable value of the property since the last transaction and paid to local authorities.
As a general guide, when buying a residential Property in Spain, you should account for costs of about 10-12% of the purchase price. In the case of a commercial property or land purchase, the costs may be higher if VAT is to be applied.
Once you have completed your purchase and your Title Deed has been presented to the Land Registry for final inscription, you lawyer will continue giving you further advice and assistance with, for example, opening back accounts, arranging contracts with the local utility companies and informing the Community of Owners where the property is located, of the transfer of ownership.
As a property owner in Spain, you are also required to make certain tax returns each year, which your lawyer will also prepare for your on your instructions.
In order to protect your interests when buying a property in spain, it is fundamental that you engage the services of a Spanish Lawyer. Most of the lawyers that Müller Property recommend are fluent in English and are accustomed to helping people like yourselves through all of the potential difficulties.
Use a qualified professional to protect your interests and make the purchase of your new home a stress-free experience. We at Müller Property are a good source of advice and have over 10 years of experience in the Real Estate business in Spain. Only negotiate with ones that are officially registered and hold a licence. Ensure you have a good lawyer with an excellent command of your own language and the native tongue, to deal with the endless stream of rules and regulations. For instance, did you know that if you're buying in Spain you'll need to make out a will in Spanish before buying, or that you can inherit debts from a previous vendor?
Research all legal issues and costs involved. Your solicitor/lawyer will advise and assist you. Before you have decided on a property it's important to be fully aware of the legal process and costs involved in your purchase. Obtain professional advice and check your finances, taking account of these additional costs.
Make your offer in writing if possible (of course, subject to contract), and include not only the price, but also the amount of deposit, when you're prepared to pay it, when you're prepared to complete, what you understand to be included in the price (for example furniture and fittings if applicable) and, an often neglected point, that all machinery equipment and installations are in normal working order.
A finca is a plot of land or an estate outside of or in-between towns and villages. Properties advertised as fincas can run from tumbledown farmhouses to lavish modern villas. An advantage is that fincas generally come with a substantial amount of land, which may include olive groves and fruit orchards.
If you wish to spend more than six months in Spain you need to apply for a 'residencia' to become a resident. Being a resident doesn't restrict movements in any way and it has many advantages, such as lower taxes. If you don't become a resident you must appoint a fiscal representative.
For facility management you can appoint a local gestor or legal representative. This person is the official form filler who does the work for quite reasonable charges. If you decide to live or work in Spain your gestor can assist you with residencias, work permits, licences and permits in connection with the opening of new businesses. They'll also advise on importing cars, furniture, electrical goods and pets into Spain, obtaining payment of your pension in Spain, national insurance and other related matters.
Ask your estate agent for details of the outgoings payable every year to maintain the property:
- annual real estate tax I.B.I. (Impuestos de bienes inmuebles)
- community fees
- charges for rubbish collection
- water rates
- electricity charges
- property income and wealth tax
Applying for a mortgage is a straightforward process, as in the EU. A number of documents must be furnished to the Spanish bank in order to accommodate a smooth transaction. Please not that originals of everything will need to be shown and copies will be taken at the bank.
How to Sell my Property
In order to favor the sale of your property and to facilitate the sale for Müller Property, you can take the following measures:
The first impression of a buyer when they visit the property is decisive. Invest a little in decoration for a faster sale. With small attentions to details in walls, carpentry, etc., you may even be able to obtain a better price. Let as much light as possible into theproperty. Open the curtains and ventilate the house before a visit. Small details make the difference and mean a lot. Look over, hide and repair all the apparent existing smaller defects in handles, windows, hinges, doors and drawers. Emphasize the capacity of storage of the property: order and clear the fitted wardrobes, the storage rooms, cellar, attic, etc. Show the most spacious/diaphanous property possible, clear out the furniture, ornaments and articles that can distort the existing space. The bath and kitchen are key elements: keep them clean and shiny. Avoid crowding the property during the visit; it can make potential buyers uncomfortable. Turn down the volume or switch off the radio and television set. If you have a pet, try to make sure that it is not in the property at the moment of the visit. Keep yourself in the background. The Agent knows what the client is looking for, and can best describe and emphasize the main qualities of your property. Do not follow behind them. Be courteous and friendly, but do not try to force a conversation with the clients. In case of any possible questions or doubts, the Agent will ask you personally for the information. This is a sale of a property, not of furniture. Do not try to sell to the clients any furniture that you do not want to take with you. Allow the professional to do his/her job. It is the salesman who should speak to the client about the price, conditions, terms and other factors. If you decide to change the conditions, mention this to the Agent when the buyer is not present. Ask for a previous appointment to show your property, so that the Agent is able to warn you that there is going to be a visit, especially if you reside in the house.
The value of your property is determined by what a potential buyer is prepared to pay for it. To determine its value is not an exact science. Your property is compared with previous sales and data bases of similar buildings, adjustments in differences of qualities and characteristics, and the result is an estimated value.
The criteria to determine the value of your property are mainly:
- The condition of your property (to reform, renovated, ready to be lived in...)
- Prices of comparable houses on sale
- Conditions of the local market, prices and the reasons why the property is being put up for sale.
Make sure that your property is in the best possible condition, as much from the point of view of the building, as from its preparation and internal appearance.
Prices must be:
- Sufficiently realistic to encourage the buyer to formalise an intention of purchase, and fixing a very high price can delay the sale.
- It is recommendable to resort to Müller Property; to make an evaluation, in which an estimated price is calculated through a detailed study of comparable completed sales comparable and the present portfolio of buildings currently on the market.
- Put yourself in the place of a potential buyer and you will almost certainly compare the property with others of similar characteristics and confirm that your asking price really is competitive.
If you are thinking of selling your property there are two important factors to consider: how much are you ready to accept for your house and how long are you prepared to wait to sell it. The price of your property will influence decisively in the speed of the sale. Therefore, it is important to fix a price on your property that is based on its real market value. Müller Property will help stipulate a right price, as much for you, as for the buyer.
Initially, your real estate Adviser must comment all the counteroffers to you, without considering the amount, unless you have fixed a minimum price below which cannot be negotiated. Treat all counteroffers seriously and do not be offended by low counteroffers. You will always be, as the proprietor, the one that has the last word as far as accepting or rejecting any counteroffers.
When a potential buyer makes a counteroffer it is possible that some condition is included; for example: they will buy your property when they sell theirs, a transaction with postponed price, etc. If you receive several counteroffers, do not limit yourself to consider only the price, but also take into consideration the proposed conditions to arrive at the most advantageous offer.
Are you ready to buy or sell a house? Do you have to perform both operations successively? If you have already decided to have an Agent present to advise you throughout the process, then this section can turn out to be particularly useful in helping you to find the best Agent to represent you.
The first condition that must fulfilled by the Agent candidate is that he/she is an expert of the area in which you are trying to buy a property: the Agent should be up-to-date in recent transactions of all types of properties (flats, semi-detached houses, villas, etc.) in a specific area (town/city centre, the outskirts...) as well as be well informed of the services both public and private (transport, schools, banks, hospitals, gardens, etc.) and be up to date with future projects in the area that may concern or affect you. A competent Agent should know the market inside out and the sale price of a property like yours. He/she should know how much a property you are looking for with similar characteristics is usually valued at. Another key to look out for so that an expert agent can give you a good service is based on his/her abilities of communication. A good communication must exist in both directions. You must be sincere with the agent in relation to your necessities of the sale of your property: If the sale is urgent, or you want to extend the period of sale, or arranged to accept a counteroffer, etc. All this information is very useful when fixing the price or conditions of the sale to your real necessities. Another key to consider at the time of choosing a real estate agent is their integrity. You should not only choose an Agent based on the price that he/she says they are able to obtain for your property, but in their ability to demonstrate this affirmation and their ability in the effective management of your property.