Buyers Guide

Step 1. Budgeting

It may not be a good start to talk about money right away. But you have to set a budget. There's nothing more annoying than making plans or even falling in love with a home when buying isn't feasible. Determine in advance what your options are, what you can and want to spend.

Only then proceed with the process.

Step 2. Region and purpose of your house in Spain

Spain is a very large country. This means that in different parts and also Costas of Spain there are very different climates and therefore different environmental factors. Determine what is important to you to find in the region. Do you mainly use the house in the summer, or in the winter. Do you love the beach and all the excitement that goes with it? Or do you just love nature, the peace and quiet of the mountains. When you know whether you want to use the house only for (short) stays, it is useful not to live too far from the airport.

If you are going there permanently or only for extended periods, this may be of less importance. Are you fond of water sports or golf? All important points to take into account when determining the location when you want to buy a house in Spain. When you buy a holiday home to rent out, the location is of great importance if you want to get a good return.

Step 3. Hiring a good broker

How do I recognize a good broker? And how do I choose a real estate agent in Spain?

Most importantly, listen to your gut! How is the accessibility? Do you get honest information, or just the sweet talk?

Are you getting the information you ask for? Within the agreed timeframe? And if not, is there at least a response why it takes longer?

A good real estate agent will find you the most suitable home within your wishes and specified budget. In addition, he or she will inform you about the process in such a way that you will not be faced with any surprises, especially financially.

Step 4. NIE request

Without a NIE number (Numero de Identidad de Extranjero) you will not do or arrange anything in Spain. If you are convinced that you want to buy a property in Spain, you can already apply for a NIE number. Certainly when you are still in the preparatory phase, you can already request your NIE number at the Consulate of Spain in your country. When you engage a lawyer to assist you legally during the purchase, he can also do this for you.

Step 5. Selecting properties to view

Good preparation is half the job. A lot of preliminary work can be done at home. First you will fully crystallize your wishes together with your broker. What is really important, what should definitely be there, and what definitely isn't. All important information to make the right selection. After this, your broker can digitally show homes that meet these requirements. In the case of new construction, this information consists of, depending on whether the houses have already been built or not:
- Renders (digital model image)
- Photo series at a model home
- Videos of the house and/or the environment
- Floor plans of the house and the project
- Price and availability list

From all this information, you can make a selection of properties that you actually want to see on location. It really makes no sense to look at 5 properties a day. In that case, you no longer know what the first property looked like when you are viewing the 4th property. 3 properties and the surroundings of the properties, if you like them, are more than enough for 1 day. We recommend when you come here to really make a good selection in advance. We can often reduce the selection to a few homes by providing very extensive information and by asking carefully.

Step 6 Choosing a property on location

Now you come to Spain for a few days or longer to view the properties. At least as important is to explore the surroundings of the houses. After all, we live out here and that's why the environment is almost more important than the house itself. That is something to think about because it is up to you to decide in what kind of area you want to live.

When you have seen one or two properties that seem suitable to you, we will look at it again the next day(s). If you feel like yes this is it, take a closer look at the area, can this area offer you what you are looking for. Only when this is all positive, and the price has been negotiated and all additional costs are clear, you can make a decision. It is up to you how long this takes.

One customer does this immediately, the other wants to think about for a few more days. Take the time you need for this. It's your money and it’s going to become your home. What others think is not important, it is about you!

Look out:

Reserving a home without calling in experts (broker and lawyer) can have unpleasant consequences. When entering into and paying the reservation contract, you no longer have the option to negotiate further. Negotiate everything well first, otherwise you risk losing the amount of the reservation.

Step 7. Engaging a lawyer to buy a house in Spain

We always recommend that you consult a lawyer once the property has been found. A specialized real estate lawyer represents the interests of only the client during the purchase of a property in Spain. This checks if all the paperwork is correct:
- The data correspond to those in the land register
- Whether there is a mortgage or other debt on the house or piece of land
- The permits and contracts are in order, also for existing construction, for example for the swimming pool or the permit for the extension or the guest house.
- Assistance with the notary and all kinds of related services such as applications for Nie, authorizations and utilities

When you buy a house in Spain, it is certainly not advisable to cut back on this item. It is and remains quite an exciting process that involves a lot of money, how nice is it that you can enjoy this carefree.

Step 8. Open a Spanish bank account

When you are in Spain, it is useful to open a Spanish bank account right away. You will need this when paying the last instalment at the notary, this is often done with a bank cheque. You also need a Spanish bank account for the automatic debit of water, electricity, insurance and, for example, the internet.

In Spain this all happens automatically and this is not possible from a foreign bank account. A broker often has good contacts at various banks to arrange this quickly and properly for you. Even without a NIE number if you have not yet applied for one.

Step 9. Sign reservation contract

When everything has been checked by you, the broker and the lawyer, you can decide to sign a reservation contract. This will take the property off the market for around 15-30 days. By signing and paying the reservation contract, the seller promises to temporarily withdraw the property from the sale. The amount involved is usually between € 3,000 and € 10,000, which also depends on the purchase price of the home.

The reservation agreement describes the house and the sale price of the house. In addition, there is also a term within which the purchase agreement must be signed and the 1st deposit must be made. Any interim instalments that must be paid must also be stated . With the reservation contract, the buyer has the option of having the property inspected more closely.

That's why it's so important to hire experts before you even sign this reservation contract. If during the inspection of the property it appears that something is wrong and the buyer does not protect himself sufficiently against such a thing, the buyer may lose the reservation amount. If everything is correct, the amount paid for the reservation must be deducted from the purchase price to be paid.

Step 10. Signing the purchase agreement

As soon as the reservation has been made, the reservation amount has been transferred, the parties will draw up the purchase agreement. This is called “Contracto de arras” in Spain, usually it is drawn up by the lawyers of both parties. With new construction you see that this is often done by the lawyer of the project developer. It is then checked, including all permits and other associated documents, by the lawyer of the purchasing party.

In the case of existing buildings, the purchase agreement is often drawn up by the buyer's lawyer. Especially in the case where the seller does not have a lawyer. In existing buildings, a “contrato de arras penitenciales” is usually drawn up. This means that both parties can still cancel the purchase after deduction of 10% of the purchase price.

Step 11. Interim payments for new construction

When you buy a new-build home, you will also have to make interim payments. Usually per construction phase, but depending on the project developer and the phase of the construction in which you buy. Incidentally, deviating agreements can be made with most project developers, if a different form suits you better. These interim payments are again always in consultation with the lawyer.

Step 12 Off to the notary in Spain

To become the official owner of the house, the notarial deed of sale must be signed at the notary. This is called the “escritura” in Spain, with which the property is officially transferred to the buyer. In addition, the house must be paid, often this is done with a bank check which must first be collected from your bank the same day. Please note, if you do not speak Spanish yourself, and have not engaged a purchase broker or lawyer, an interpreter will have to be present at the notary.

You will also have to be able to designate a tax representative. Someone who can vouch for you when the Spanish tax authorities cannot find you. The escritura is signed by the buyer, seller and notary. Buyer and seller receive a copy of the escritura. This allows the buyer to register with the municipality and the various land registers. Incidentally, this can easily take six months in Spain before it is processed in the land registry.

Step 13 Pay associated taxes

The largest expense when buying a house in Spain are the associated taxes. For a new-build home this is 10% VAT and for existing homes this is 10% transfer tax. The payment of the VAT/transfer tax is usually paid directly at the notary. It is also possible later if it is paid within 30 days of purchase. In addition, you have to take into account about 1.5% stamp duty for new construction, depending on which province you buy something in.

There are also notary fees and registration fees. When you sell your home as a non-resident, 3% of the sales price is reserved. You can recover this after one year if it has been proven that you are not in arrears in paying the (local) taxes. This includes the annual property tax (IBI) and the rubbish tax (Basura).

Step 14. Registering electricity and water

The last step when buying a property on the Costa is to put water and electricity in your name. Good tip also in Spain there are big differences in energy rates. In addition, you often only receive daytime power as standard, but day and night power saves a lot in use. Definitely something to keep in mind when transferring power to your name. the utilities in your name.

You will also have to register with the Owners' Association (if there is one) and check whether and which insurance you want to take out to protect your new property.

For more information on buying or selling property on the Costa del Sol, call us on +34 951 829 894