Congrats, you've made the decision to purchase property in Spain and now you're browsing the internet and many other sources to ensure the decision you’ve made is right. You want to make sure the buying process is as stress-free as possible and that no surprises come from out of nowhere to bite you in the proverbial derrière.
With that said, let’s discuss the top 10 tips you should keep in mind when it comes to buying property in Spain.
1. Know What A Real Estate Agency Does
First, you should know what the real estate agent’s role is when it comes to buying property in Spain. Their job is to introduce clients to prospective sellers. After you've seen the property and you make the decision that you want to buy it, then you’ll want to contact a lawyer or an abogado as they're known here.
You want to do this before you agree on a price for the property, so do not agree on any price.
Make sure you work with an established and reliable estate agent to make things as stress-free as possible.
2. Why You Need A Lawyer/Abogado
When you buy property in Spain, you'll definitely need a lawyer. Sure, the real estate agency you are working with may tell you that you don’t need a lawyer but you need impartial advice.
If you make all enquiries on your own and you are Spanish, then you probably don’t actually need a lawyer.
However, if you are not a Spanish national, then you probably don’t have a good grasp of the Spanish language and you probably don’t know much about Spanish business practice and business culture in the country. Things are a lot different over in Spain than the UK, US, or elsewhere. The bottom line is you’ll want to hire a lawyer to provide you with sound advice that is in your interest, and your interest alone.
Agents in Spain that we know of insist on clients finding their own lawyer to maintain impartiality.
3. Choosing A Lawyer/Abogado
A lawyer's experience with the market should be one of the main factors you base your decision on. In short, choose an lawyer with plenty of experience. Furthermore, the lawyer shouldn’t charge extortionate fees, but don’t just automatically choose a lawyer that charges the cheapest rates. Cheapest does not always equal best. Besides that, it’s ok if the lawyer isn’t close to the area where the property is because experience trumps everything else.
4. Clarify The Costs
How much is the total cost of buying the property because you want to know this. This will include fees such as your lawyer’s fees, Notary’s fees, taxes, and so forth. Your lawyer should give you a good idea, but do make sure you ask them and don’t just rely on whatever info your real estate agent is giving you either.
5. About Third-Party Funding
If you need to secure funding from a third-party, then don’t sign anything until the funding is secured. For example, are you going to get a mortgage? If so, then don’t agree to buy the property until you have actually secured the mortgage.
6. When To Pay A Deposit
Don’t pay anything until you are 100% sure you want to buy the property. Your lawyer should complete all the necessary enquires and then give you a report. After all this, you will be in a better position to proceed.
This does mean you will likely have to pay a fee to your lawyer. The good news is you might be able to delay the negotiation on the asking price. The bottom line is don’t commit to anything until your lawyer gives you the results of their enquires. Do not feel pressured into handing over a deposit before you are given your report.
*(Outstanding debts are transferred to the new owner if they don't do their due diligence properly so always make sure all the checks on the property are carried out and done correctly.)
7. Hire A Surveyor
It may cost you a bit of money, but you should hire a surveyor, who will survey the property you’re considering buying. Just make sure they are experienced and have the qualifications to back them up. Some Spanish real estate agents will tell you this is not necessary, but do go ahead and hire a surveyor.
Many people in Spain don’t really tell surveyors to produce a report, unless there are obvious issues with the property.
This might includes walls that aren’t in good condition or massive cracks in the foundation. Furthermore, make sure you understand what is in the surveyor’s report when they give it to you.
8. Learn How The Development Is Run
If you are purchasing property on a development with pools, gardens and other common areas, then you want to make sure your lawyer knows what you are paying in regards to service charges. You don’t really want to purchase an apartment in an area where you will be paying high service charges or increased charges. This is because you don’t want to be the one that pays more just so the development has funds to compensate other owners’ indebtedness.
*(It's commonly known that some owners don't pay their community charges on time or at all. This can cause problems with regular maintenance.)
9. Annual Expenses
Another thing you want to know about is annual expenses that come with owning property in Spain. For example, how much will you pay for wealth tax, if applicable to you, and how about non-residents income tax? Let’s not forget about water, electricity and other utilities. Before you sign a contract, have a full understanding of how much you’ll pay in annual expenses.
10. Understand Everything
If at any point during the process you don’t understand anything that is going on, then you should speak with your lawyer. Remember, this is what they are there for, so always ask questions when you don’t understand something.
Make sure you understand everything completely. The last thing you want to do is to make a list of questions you still want answers to so that you feel more at ease with the entire purchase process before finalising the deal.
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