You've found your perfect Spanish property, so now it's time for the purchase process to begin!
Buying a property abroad can be confusing at first, but we've put together this step-by-step guide to outline how the process works.
Read on to find out what it entails.
The buying process in Spain
1. Reservation agreement
Once you have found your property, the purchase process begins with a reservation agreement. This is a contract that freezes the purchase price and takes property off the market for, usually, 30 days on payment of a fee between €3,000 and €12,000. The deposit is usually held by your lawyer or your agent in a client or escrow account.
2. Private purchase contract
Within 10 days of signing the reservation agreement, the full private purchase contract (contrato de arras) is signed between the buyer and the seller. (This is similar to exchanging contracts in the UK buying process) Within this time your lawyer should complete all the searches on the property - confirming that the seller owns the property being sold, there are no mortgages or charges and that planning consents are in order. Once both parties sign the main contract, it is binding. The arras contract or full private contract will usually require a 10 to 20 per cent deposit to be paid.
3. Transfer of ownership
The buyer is then committed to pay the balance of the price, and the seller (once the money has been paid) must transfer ownership to the buyer. If the seller pulls out of the transaction he must return double the amount of the deposit received by way of compensation. If the buyer pulls out he will lose the deposit paid. The property sale is formally completed when the title deed (“Escritura de Compraventa”) is signed before a public official called a Public Notary, or Notario. This will happen at their office and be accompanied by the agreed final payment and all the relevant purchase taxes.
The Escritura is then presented by the Notary to the Land Registry for registration and the property is passed to the new owner. Final registration of the title deed can take several months.
Buying a new-build property
With a new-build property, completion can take a lot longer, and the payments are split over stages of the build process, and the developer should provide bank guarantees against each payment. This protects your payments in the event the developer fails to complete the property or goes bust.
Who can help with the purchase process?
- Estate agents - Estate agents know the local market thoroughly and will be able to help you with general advice and assistance. A typical estate agent in Spain will do a lot more for the overseas buyer than you may find in your own country and commission can sometimes reflect this, with commission varying from sale to sale. Find out more about working with an estate agent in Spain here.
- Lawyers - Your estate agent may help recommend an independent lawyer for you who have acted on behalf of their previous buyers, if you do not already have one in place. Your lawyer will help with many checks, from ensuring there are no outstanding charges against the property to assessing the taxable value of the property. You can find out more about lawyers in Spain here.
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