Displaying items by tag: Buying Property Orgiva
Legal Buying procedure
When you select a property to purchase you will need a copy of the Nota Simple which specifies according to Land Registry what you are buying and what is registered and to whom. To understand ongoing costs of your potential, purchase a check of yearly IBI (Council tax costs) and level of community charges where applicable should be made. At this point you should appoint a Spanish lawyer who can also check the seller is the owner and basic legal enquiries are made before you part with any money.
The legal implications in Spain of signing a purchase contract
Private Purchase Contracts as part of the buying process in Spain is the equivalent to an exchange of contract in other countries and holds the same legal implications. It is normal at this point for a 10% deposit to be passed to the seller. At the point the contract is signed the buyer becomes legally liable to complete within the stated timescales or risk losing deposits and or incur late payment penalties. The seller is now legally obligated to sell the property at the agreed price.
It is at signing of purchase contract it is also agreed what expenses will be picked up by the buyer and what fixture and fittings form part of the sale and the price.
A purchaser should before signing a Private Purchase Contract have decided exactly who will be buying as it is difficult to add or remove buyers in Spain after this point.
What to expect at completion of your Spanish Home?
Completion for a property purchase in Spain is undertaken in the offices of Notaria Publica. All parties connected to the completion in Spain, including any bank personnel for redemption or subrogation of an existing loan the bank providing a new mortgage, and seller or their legal representative must be in attendance to sign. Either the buyer and or the buyer’s lawyer must also be present.
In the event the Buyer attends in person without their legal adviser being present the Notary will insist you either are fluent in Spanish or have an attendant with you who is. Before completion you will need to understand and ensure you have accounted for all costs, have sufficient provision of funds required for costs and taxes and all relevant cheques, or bankers’ drafts have been written and are available.
Signing on day of property completion what can I expect?
When signing at the Notary for a purchase, if you intend to attend in person patience can be required. It is not unusual for there to be delays and not unknown for one of the parties required to cancel, in which case the signing cannot take place and must delayed. Never assume signing will happen on the day booked and leave sufficient time in Spain to allow for delays.
The notary will check all paperwork and again it is not unknown for them to raise issues and require clarification on points and suspend the signing until these have been sorted. You or your power of attorney will be required to have a certified passport or original passport and original NIE certificates available. The notary will also require to see evidence of the full monies required for completion and be able to verify their source. You can avoid completion day personally by appointing a Spanish lawyer who has power of attorney to sign on your behalf.
What happens after signing and what is the legal process of registration of ownership?
After signing at completion, a copy of the deeds are given to the buyer or their legal representative by the Notary. The originals are sent to land registry to be registered. The registration process can take up to three months. After registration the original deeds and all invoices relating to the transaction become available.
Why do I need to check registration has correctly taken place?
You should always check that registration has taken place and get into your possession or pass to your lawyer in Spain for safe keeping, the originals of all documents and invoices. If you wish to sell in the future these will be required for the sale and to ensure you do not pay Spanish capital gain tax on costs incurred at purchase through lack of evidence of these costs.
Do the asking prices displayed include all costs?
No, the prices quoted are those sought by the sellers. You need to add the costs of buying which, in Andalucía, are approximately 12% - 13%. This is broken down by 8% ITP (stamp duty), 2% Estate Agents fees and 1% for a lawyer, Notary and Property registry fees of these plus IVA (vat)
What is the legal buying process?
The buying process is fully explained in our guide to the legal buying procedure.
How long does it take to buy a property?
The norm is around three months from the signing of the private contract and paying the 10% non- refundable deposit. This can be quicker if all the necessary paperwork is in order, you have your NIE and Spanish bank account in place with funds prepared it can be done within a week.
Am I protected during buying process?
Always appoint a lawyer registered with the College of Abogados (lawyers’ college) this way you are protected should anything go wrong. We can recommend a reputable lawyer if you wish. If your buying inland property classed as rustic its always best to use a lawyer that is accustomed to dealing in that area.
Can documentation be in my language?
You need to use a Spanish lawyer that speaks your language. That way you can be sure the questions you need answering are answered correctly. The private contract can be prepared in both languages, it is the Spanish version that is legal.
What is a N.I.E.
A Número de Identificación de Extranjero. This is a fiscal number which everyone in Spain has and is used to pay taxes and to identify you when dealing with any government or administrative organisation. This might change with Brexit!.
1. Sort your budget: First things first, you have to know how much you can feasibly spend on purchasing your new Spanish property and how much you want to spend.
2. How will you pay? There are a number of options when it comes to paying for your house:
◦ One-off payment: Paying the total sale price of the property outright to the seller, normally by way of an electronic bank transfer or bankers cheque in their name that you hand over when you sign the property deed at the Notary office.
◦ Mortgage. Getting a mortgage, either the bank in Spain or at home, using the property itself as a guarantee against defaulting. Depending on how old you are and certain other circumstances, payment terms can be up to 40 years, with banks normally offering to loan 60% of the value of the house and the remaining 40% being paid from the buyer’s pocket.
3. Decide what type of property you want and where, be it a new construction or second-hand, free or protected, on the seafront or in a city. You should choose the one that best suits your needs and personal situation. Drive around the area you have chosen, see which villages or Towns you like best then approach a good estate agent to find something in the vicinity.
4. Choose a seller. Once you’ve decided where to buy and how much to spend, your search will be so much more focussed and productive. Remember that negotiating the price and sale conditions depend on the type of seller, so choose wisely between a private seller or a real estate agency because each have their own pros and cons. It’s a mistake people often make using a “local” from a bar thinking you’re saving agents fees, often they are charging more than an agent your just not aware of the deal between them and the vendor. It’s probable the legal paperwork won’t have been checked out by a lawyer or gestor, meaning you could waste hundreds on a solicitor to be told the house isn’t legal and have to start your search again
5. Visit the property, talk to the neighbours and inspect the place top to toe. When you go to visit a place, take notes, check measurements and take photos of anything that takes your fancy. Take in the distribution of the space and the rooms, which direction the property faces, how much light and ventilation there is, the state of the fixed installations, the wiring and the energy performance, how much noise there is and what else is around in the neighbourhood… in short, be thorough in your first visit to see a house!
6. Make an offer (they can’t refuse):
◦ Make sure you’ve got your financing or a mortgage arranged and in place to be in a strong position to make that offer.
◦ Look over the property once more, just to be sure, before making your offer.
7. Sign the deposit agreement (contrato de arras). This is the first contract that is normally signed and it’s a kind of preliminary safeguard for the rights of both the buyer and the seller, assuring both will enter into the sale agreement. When you sign, you’ll have to pay a 10% deposit on the house, and with this you take on all the rights and responsibilities of a buyer. If you as the buyer later decide not to go through with the transaction, you will lose this deposit but if the seller cancels the sale to you, they will have to return double the deposit to you.
8. Sign the title deed. This part of the buying process must be done in front of a notary with both the buyer and seller present. The deed must contain a description of the property as well as explaining any mortgages or charges on the house, the final sale price agreed and how it will be paid, plus the taxes and expenses related to the sale. This is also a great chance to check that all the documents are present and correct, like the Energy Performance Certificate, insurance if applicable, and invoices for the latest tax and community cost payments.
9. Pay the transaction costs and taxes. The main expenses to be paid when buying a home in Spain are the ITP property Transfer Tax and VAT taxes, notary costs, the payment to register your name on the Property Register and any costs related to the mortgage. Budget for your overall buying costs, this can be between 12% and 13%. Broken down by 8% ITP (stamp duty), 2% estate agent fees plus IVA (vat) 1% plus Iva for a lawyer plus IVA (vat) then a share of the Notary costs and the Property Registry.
10. Pick up the keys and move in to your new home!