Looking for a home in Spain can be very time consuming. There are some important differences with house hunting in northern European countries. Also, the house buying process in Spain is different. Below an explanation of How To Buy A Property In Spain.
Searching a house: do it yourself or by an estate agent?
In the UK you have Rightmove, in The Netherlands you have Funda, in Belgium ImmoWeb. All portals that provide accurate and complete information about properties for sale. Therefore it is very easy for a searcher to find its house on the web. In Spain however, a number of similar sites do exist. But the quality of these sites are horrendous. Following portals we consider best:
In our opinion Kyero is the most important portal for the area of the Costa Blanca. Searching through this portal will be helpful to get an idea of the range and the quality/price ratio, but not useful for a specific search and scheduling viewings.
Some of the obstacles are:
- The same house is often showed several times. Each with a different (or the same!) description, photos and sometimes even a different price. This can be conflicting and creates confusion.
- The information is not up to date. Even properties that are sold are still on the portal.
- Addresses are not listed on the websites. Often the partidas or residential areas are mentioned, but if you do not know the area it is sometimes difficult to figure out where and how this area is.
When you want to buy a house in Spain, we advise you to find yourself a trusted estate agent. This agent can organize the whole searching process for you from beginning to end. He/she knows the area, the market, the procedures and has a local network. Giving an order for exclusive guidance you may expect your agent to be proactive and take a lot of work out of your hands. Because of the system in Spain this guidance will cost you nothing.
Would you like to know more about this subject? Read our article “An estate agent in Spain? A peek behind the scenes.“
Once you have found the house that suits you, the negotiation can be opened. Your estate agent will advise you on a correct market value of the house and suggests a negotiation strategy. Eventually, of course, you decide what you consider the acceptable price of the property.Please don’t forget there are also additional costs to be taken into acccount, such as tax, lawyer, notary, etc.
In this phase of the process, or possibly even before, it is time to get acquainted with a lawyer or gestor. Essentially both perform the same work, but we always recommend not to save on quality on this subject and to choose a lawyer. Unlike in some other countries when buying a house in Spain a lawyer is indispensable. Mainly so because the notary plays only a minor role in Spain. Still a crucial one. The notary witnesses the signing of the deed after checking ownership and identity. But that is all. The notary does not investigate outstanding debts, mortgages or herds on the property for example.. Even the entry in the property register is not subject to the duties of the notary. This is one of the things that your lawyer takes care of.
Read our article “What can a lawyer do for you?” to get an impression of what a lawyer can take care of.
Once agreement has been reached on price and other terms, firstly a reservation contract will be prepared. This is a short contract in which buyer and seller confirm their agreement of the sale and selling price. The purchaser is required to pay a deposit. This reservation fee usually ranges anywhere between €3,000,– and €6,000,–.
The reservation contract mentions also the period within the contract must be signed. This prescribed period will be used for researching the property.
Your lawyer conducts all necessary research of your new property. He pulls data from the cadastre and the property register (in Spain two different bodies), the municipality, the tax authorities and the utilities.
It may occur that the current owners have re-built or added to the property without registering this. This will be discovered by your lawyer. He will advise you to ask the seller to legalize this before the sale takes place. Mostly legalization is possible and won’t have to interfere in the buying process.
This phase of the process will also be used to prepare for your upcoming status as a home owner in Spain. You will have to apply for a NIE-number and to open a bank account. In either case, your lawyer will be able to assist.
The signing of the purchase contract must take place within 10 days after signing the reservation contract. Generally speaking the purchase contract should describe all conditions that are part of the agreement. By signing the contract, the buyer needs to pay an advance of 10% (less the reservation fee previously paid).
On the agreed date, all parties appear before the notary, chosen by the buyer. Your estate agent and your lawyer will accompany you. If necessary, the deed will be explained once more, but obviously it is already discussed before that time with your lawyer. With your lawyer also the payments have been prepared. In Spain this still takes place with cheques. After putting signatures, checks and keys are exchanged and you are the new owner of the house!
On top of the agreed purchase price, you must take into account an additional charge of approximately 12% to 13% of additional costs (about 10% tax and 2% to 3% for notary, registration fee and lawyer). Another 1.5% tax is asked for new constructions (stamp duty) and sometimes also fees are charged separately for the connection for water and electricity. For mortgages also costs are charged for mortgage tax, opening costs at the bank, notary fees and costs for the mortgage (around 4%).
Buying a house in Spain, of course, also brings its responsibilities. After transport at the notary you are responsible for paying local taxes, signing contracts with utilities and maintenance. Your lawyer will help you registering with the municipality and the transfer of the contracts for gas, water and light. Regarding the maintenance of garden and swimming pool for example, there are many companies available that offer their services. Your estate agent can provide more information.
The Costa Blanca is a very popular location for tourists (and with good reason!). Renting out your property during holidays could be an interesting opportunity. The rental income can take care of a (big) part of the annual costs. Regarding holiday rental already an extensive infrastructure is available. Several options are possible from outsourching all to being involved yourself. Again, your estate agent can give you more information.