Ten Step Guide To Buying A Property
A Ten Step Guide To Successful Buying In Andalusia
Step 1 Know What You Want
Be clear about your requirements. Tell us as much as possible about what you are looking for in a property and what you want to use it for. No matter how unimportant a particular requirement may seem let us know about it as it could be the difference between viewing and not viewing a property, possibly losing you an opportunity.
The clearer you are, the less time will be wasted in viewing unsuitable properties.
Step 2 Know the Area
We cover a wide area with varying physical characteristics, from mountainous to gently rolling hillsides, lake views etc. You may be familiar with a particular area that appeals to you. You may have holidayed in the same area renting and now want to buy your own place. You may only have the vaguest notion having seen the area on television. Whichever is the case tell us what your situation is so that we can correctly tailor the properties we offer you.
Step 3 Be Clear About Your Budget
Be honest. If you have €300.000 to spend, say so. Don’t say “about €250.000”. We will never try to sell you a more expensive home than you can afford but we don’t want to lose the opportunity to show you the house of your dreams because it falls above your stated budget.
Step 4 Mortgages
Be clear from the outset and tell us if you are going to need a mortgage. This may well affect the properties that we show you as not all properties are mortgageable. You need to be aware that valuations in Andalusia are a hit and miss affair for several reasons, principally because the system is very unsophisticated and because official sale prices are meaningless. And they have almost nothing to do with the market price. Expect to get a valuation on a fully renovated and ready to live in property of around 70% of market price. Banks traditionally loaned only 50% of valuation on rural properties but are now being more lenient and often loan up to 70% subject to status, so the most you can reasonably expect to finance is 70% of 70% or roughly half of the purchase price.
Step 5 Don’t Forget The Additional Costs of Buying
Indirect taxes are high in Spain. Chief amongst these is the tax on buying a property which starts at 8% of the declared sale price and goes to 9% over €400.000 and 10% over €700.000. We advise clients to budget approximately 13% on top of the purchase price to cover all costs.
Step 6 Have Your Deposit Prepared
There is a two stage buying process in Spain: a private contract followed by the signing of a public contract at a Notary. You will need 10% of the purchase price when signing a private contract which takes only a couple of days to prepare.
Typically, the buyer pays the 10% deposit to the seller in cash on signing or undertakes to make a transfer to the seller’s nominated account within a certain time, typically 7 days. So make sure you have the deposit funds available because the seller is free to sell to another buyer if you fail to pay within the stipulated period.
Step 7 Be Decisive
As the market hardens many properties are attracting interest from multiple buyers.
Decide if you want a property, tell us and we will act rapidly, negotiating with the owner and, once an offer is accepted, prepare a contract to send to your lawyer.
You will not be asked to pay any money until you sign a binding legal contract.
Step 8 Appoint a Lawyer
Your choice of lawyer is of utmost importance. We spend more time sorting out past problems caused by sloppy and incompetent lawyers than we do showing properties. If you are buying in the countryside appoint a lawyer experienced in that environment and not someone whose work involves the sale of apartments and houses in urbanisations on the coast. They are different worlds. Ask us to recommend a lawyer if you are unsure.
Step 9 Execute a Power of Attorney
Spain is an unbelievably bureaucratic country. Changing over title to essential services can be a long-winded nightmare. Best to let your lawyer do it, for very little cost. A power of attorney takes less than an hour and costs typically around €50 - €70. Money well spent. You will need to obtain NIE’s and open a Spanish bank account. You either have to do this in person (which can require repeat visits 10 days apart) or have your lawyer do it for you. Also, if you are unable, or it is inconvenient, to return to Andalusia to complete the purchase at the Notary, your lawyer can sign for you and save you the cost of a journey.
Step 10 Enjoy Your Property
You take possession of, and gain legal title to, your property on signing at the Notary. This is the beginning of what we hope will be a wonderful adventure. You will need to acclimatise, get to know your neighbours and do whatever jobs are necessary. We will be there to assist in whatever way you need. A plumber? Help with paperwork? We will point you in the right direction and introduce you to the necessary people.