Displaying items by tag: Orgiva Properties
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!.
How much will it cost to sell my property?
Energy Efficiency Certificate
An energy certificate is needed by EU law, this needs to be carried out by an architect, costs vary greatly, we have a firm we can recommend that will do it for 80.00 Euros plus IVA (vat). This needs to be done to put the property up for sale as both the vendor and the agent can be fined for advertising the property without it.
Estate agent commission
Its normal in Spain that the buyer pays a commission to the Estate Agent working on their behalf. This can vary from place to place; the fees are normally between 2% and 5% of the agreed sale price. Payable either in two parts, half at the signing of the private contract and the balance on completion day at the Notary. If the sale is to go ahead in a short period of time most agents will wait for their fees until completion day.
According to Spanish law the seller pays approximately 60% of the costs of the Notary and the buyer pays approximately 40%. However, this can be used as part of the negotiation process, in certain areas its normal the fees are split 50/50.
This is a municipal tax called Plus Valía, based on the value of the buildings and the length of time that you have owned the property. This varies from Town Hall to Town Hall but is normally not a great deal of money.
What documents are needed to place my home for sale?
Before we can market your property we need the following:
Your title deeds.
• Current Nota Simple
• Latest IBI statement
• Electricity bill
• Water Bill
• Certificate of Energy Efficiency
• Contract of Sale (mandata de venta)
We have a standard contract giving us permission to advertise your property sell your property and agreeing to pay our commission upon a sale.. This states our selling fee including all marketing costs.
• Licencia de primero ocupación
• Certificado de Legalidad Urbanística
• Should I repair or redecorate before I put my property on the market?
Always prepare your house for sale, clear the deck, give a fresh coat of paint outside if needed, kerb appeal is important.
Do I have to show my property to prospective buyers?
As a local agent I will always accompany the potential buyer, if you’re at the property and wish to give your input then you are welcome to do so. Some vendors prefer to do it themselves. We hold keys for a lot of properties but always accompany the buyer.
What happens when I receive an offer, do you still bring clients to view?
Until contracts are signed, and the deposit paid we recommend the property continues to be marketed.
When do I sign at the Notary?
A suitable date for signing is agreed between both parties. The day you both sign, monies are transferred, and the keys handed over to the new owner.
Capital gains tax for Spanish Residents
The natural person’s incomes are classified as general income and savings income. Capital gains on investments and properties are considered savings income.
The tax rate that applies must be paid depending on the gain.
Up to 6.000 Euros, the tax rate is 19%.
• From 6.000 to 50.000 Euros, the tax rate is 21%.
• From 50.000 Euros an up, the tax rate is 23%.
The value of the capital gain is obtained from the difference between the value of the transfer and the acquisition value, which are not more than the sale and purchase price, and may be entitled to the consideration of certain expenses inherent to said operations.
Non Tax Resident.
A retention of 3% of the total sale price will be made at point of sale, I.E. signing at the Notary. You then have a set time to reclaim this amount if no Capital Gain has been made, or pay any outstanding tax due on the gain that has been made.
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!
1. APPOINT SELLING AGENT, SOLICITOR AND PREPARING DOCUMENTATION
First and most important decision is to Sell, then choosing the right selling agent for you. By choosing and appointing Orgiva Properties we will guide and advise you at every step making the process as simple as possible.
1st advice, appoint a solicitor. We would be delighted to introduce you to our recommended and trusted lawyer who speaks English and is used to dealing with the type of property you wish to buy. I.E. a lawyer specialising with Urban properties, or an inland lawyer who specialise with Rustic style properties with land. Independent legal advice regarding any government or personal tax liability that may result from the sale of your property is invaluable at the beginning.
Your solicitor can apply for first habitation licenses if necessary, arrange Power of Attorney to represent you should you not be available to sign in person at the Notary etc. All documents and other items that are necessary for the sale of your property should be prepared in advance.
With everything in place in the initial stages we can all be confident that there is no reason why we should not have a swift and very smooth completion of the sale of your property. We like to be prepared with NO surprises at the end for you, for the Buyer or for us!
2. DOCUMENTS YOU NEED TO SELL
COPY OF THE ESCRITURA (Deeds)
COPY SIMPLE (This shows the current title to the deeds on the day of completion i.e. if there is a charge on the property, any outstanding mortgage or other debts)
UTILITY BILLS - WATER - ELECTRIC - COMMUNITY FEES - SUMA
INVENTORY LIST - Furniture or other items that is being left in the property (this list will made part of any sales contract and will be binding)
ENERGY EFFICIENCY CERTIFICATE (EEC)
SIGNED AUTHORISATION TO SELL
3. EMOTIONAL GOODBYE'S
Next step is preparing you and your property for sale. Emotional goodbye's have to be done before you can move on. Stop calling it your 'Home' it is a 'House' like any product that has to be sold. Dis-associate yourself with it. Start to picture in your mind the day you leave and look forward to where you are moving to! Focus on what you will do for the new owners the day they move in, leaving the rooms cleaned, keys labelled, useful local contacts for firewood, builder, plumber etc.
4. DE - PERSONALISING
Again it's emotional, pictures, ornaments etc. but they must go! Potential buyers have to imagine themselves in the house and they will not be able to do that with all of your personal things everywhere telling them the house is yours! If you can try to leave them a blank canvass to imagine their own pictures on the walls and their own style of decoration. Good for you as you can start packing by putting your most important and precious things away first.
5. DE - CLUTTERING
This is different to de-personalising. This is getting rid of the junk, all the things that we all accumulate over the years. If you don't want it or haven't used it in a while, then get rid of it! Bin or charity! That means empty the shelves and all surfaces, especially kitchen counters. It is important to make the kitchen look as big and serviceable as possible, so again if you are not using it. Pack it. Good news again for you, you are packing already!
TIP - Cupboards, Wardrobes etc. Buyers open doors! Kitchens, bathrooms, wardrobes everywhere, they can't help it, it's not nice but they do it!! So, no nasty surprises, make it look like the inside is as clutter-free and organised as possible. Tidy inside kitchen cupboards, wardrobes, garage etc. buyers will remember all that space and imagine the places where they will put their own things.
6. FLOW OF YOUR ROOMS?
Stand at the entrance of each room. Is it easy to walk across it? Is there an obvious flow to the room? Is there something in the way you have to walk around? What blocks the path and walkway into each room? What is the first thing you see? AND is it good? After considering all of the above, move any items that are in the way and store them! Anything that hampers the path and makes the room look smaller, move it. You need to make your rooms look as large and spacious as possible.
7. SELLING FURNISHED/UN-FURNISHED
In Spain it is quite normal to sell property furnished, minus personal items. So to avoid any misunderstanding later on it is best if you have sentimental or other attachments to any particular furniture or fittings to remove it before the viewings start. Better not to show a buyer something than have to say later that they can't have it. If you think it is necessary a simple replacement or just remove your belongings, then what they see is what they get!
Perfect for everyone. You are packing, and the buyers can see the house as they will buy it.
8. SHOULD YOU SPEND MONEY OR DO REPAIRS TO SELL?
This is up to you, if there is a lot to do then a price adjustment can be more effective letting the new owner do the work themselves to their own taste, but if there are just a few minor cosmetic things like a little repair here and there this can make your deal. Loose handles, kitchen drawers that fall down, dirty grouting and a big one -- light bulbs to be replaced that don't work. A coat of white paint outside makes all the difference!
9. REVIEW WHAT YOU HAVE DONE
You have done all of the above, walk into the house and into each of the rooms again.
What do you see?
What can you smell?
Where is the focus of each room?
Imagine now you are the buyer walking into your clean, fresh, de-cluttered, de-personalised show-house.... how could they resist?
10. CURB APPEAL - OUTSIDE/ EXTERNAL PREPARATION
Most of the hard work is done now..... You've done all of the above and waiting for your first viewing, the Agent pulls up outside with the clients .... and they say they don't want to go in! It doesn't look like it is for them and won't get out of the car! It does happen!
What to do now? ...
Go outside, walk to the end of your street, what do you see? Is it good? If not, you need to go through the process again and again until your 'Curb Appeal' is perfect! Ask a friend or neighbour to be honest, ask them to come around and tell you what they think of the outside. What are their first impressions? What would they do to make it more appealing? Do Not take offense, they are helping you. A little care, a bit of D.I.Y., clear the pathways, cut back the hedges, clean the garden furniture, strategically placed potted plants, sparkling inviting windows and front door.
Orgiva Properties is the oldest established property agency in the area.
Founded by Paul McJury in 2004 Orgiva Properties has been helping clients to find their dream property, whether it be a cortijo, a country house or a house in the pretty villages of the Alpujarras, for nearly fifteen years.
He is now widening his covered area to include the Costa Tropical, with Towns such as Salobrena, Almunecar, Jete, Motril, Torrenueva Costa etc.
At the end of the boom in property prices almost all real estate agencies in the Alpujarras, and in Orgiva in particular, disappeared.
Orgiva Properties has consistently offered high levels of service to vendors and buyers alike and this is no doubt the reason why the agency is not simply surviving but thriving and growing.
In the past ten years there have been considerable changes in legislation affecting the sale of property which makes life more complicated both for real estate agents and their clients. Previously lax attitudes on the part of lawyers are no longer accepted.
Culture and Language
In rural Andalucia the vast majority of buyers are non-Spanish. For both economic and cultural reasons the Spanish prefer to live in towns. It is vitally important, therefore, that agents speak the language of the clients and understand the mentality of, predominantly, Northern Europeans. Thought processes and belief structures can be vastly different and misunderstandings very common.
That both buyers and sellers emerge from a sale satisfied with the outcome and confident that we have done a really good job in both bringing them together and successfully concluding what is not only a financial, but also an emotional, process.
We look forward to meeting you.