Your guide to the property buying process in Spain
Step one: Find the property
The internet will undoubtedly be the first place most people will turn to when it comes to finding the right property. However, if you are visiting the area in which you wish to buy, then take time to visit all the local estate agencies and peruse local newspapers and any free neighbourhood magazines. This will not only help you get a better feel for the area and the type of properties available there, but you will get a sense of how the local agents work and what style, price range and number of properties they have on their books. Also, ask for recommendations from your friends, family, and trusted advisors – personal recommendations are invaluable when seeking property abroad. Read our tips for finding the right agent below.
Step two: Visit the property
Once you have selected a property – or properties (it never hurts to have options), it is well worth paying a visit to make sure it’s everything the agent says it is. When visiting a property, it’s a good idea to talk to locals about what the area is really like. Your trip to view properties in Spain is an important part of the buying process. We recommend trying to visit the properties and surrounding areas at different times of the day and night, to get a feel for real life there. Talk to your real estate agent about the area and types of property and benefit from their local knowledge and expertise. Find out as much as you can; take pictures and make notes about the different properties: the pros and cons of each, whether they fulfil your requirements, wishes and needs. Weigh up the amenities and availability of different services in the locality. There’s still time to so your research at this stage; it’s important to get a clear picture of the property you want alongside the properties you choose to view.
Step three: Ensure everything is in place
You’ve found the property for you. It’s time to make an offer! However, before you do, it’s essential to check that all your finances are in place.
- Can you definitely get the mortgage you need?
- Do you have enough money set aside for extra, hidden, costs such as legal fees and agency commission?
- Have you factored in the exchange rate with the Euro and how this affect the price of your property and all the other associated international costs?
- Legal fees will typically cost somewhere in the region of 1,000 to 2,000 Euros. It is essential to find a good quality Spanish lawyer who speaks the same language as you. Ideally, they should be in the area you in which you intend to buy your property, but this isn’t an absolute requirement. You (or rather, your lawyer) will need a copy of the Nota Simple, which specifies according to the Land Registry what you are buying and what is registered.
- During the process of buying a house in Spain, you will need to obtain a Número de Identificación de Extranjeros (NIE), if you don’t already have one. The NIE means that you are registered with the Spanish Tax Authorities. It can be applied in person at the Foreign Office or National Police Station.
Check you are eligible to buy a property in France
While France has long been a popular country for overseas property hunters, the UK’s decision to leave the EU has created a slight degree of uncertainty over whether the process will be as straightforward in the near future for British citizens. However, there are currently no restrictions on foreign property ownership in France and buyers from non-EU countries, including the USA, Australia and China, consistently invest in French property without problems. One potential impact that Britain leaving the EU could have on buying a home in France
is that mortgages could become more costly. Some non-EU purchasers are deemed higher-risk by lenders in the country than those from inside the EU. Whether British buyers will fall into this ‘higher risk’ category once the UK finally completes its divorce from the European Union remains to be seen. However, given that British borrowers are the largest single overseas nationality borrowing from the French retail banks, the likelihood is that French authorities are not going to want to lose British property purchasers at a time when confidence is returning to the country’s property market.
Step four: Make an offer
Once your finances are in place, and you have engaged a lawyer to work on your behalf, it is time to make an offer. You can do this through the agency who will then present it to the seller, who will either accept or reject. Many, although not all, sellers will accept offers below the market value, so it is worth starting with a lower offer, just to test the water – although not too low, as this can be considered insulting in Spain. Once you reach a verbal agreement, it is a good idea to have your lawyer summarise the key points in writing and get this over to the vendor so as to reduce the chance of any misunderstanding that might scupper the transaction further down the line. If you choose to do this it must be made very clear in the wording of the document that this is just a clarification of what you have agreed in principle and not a binding commitment.
Step five: Do your due diligence
Before the 30 days of the reservation contract are up and your solicitor agrees, you will sign a private contract; there are several different types of these but generally it will be a long legal contract, detailing all relevant information about the seller, the buyer, the property, the agreed sales price and buying terms and potentially even a timeframe for the move. Usually you will pay the deposit for the property at this point as well. This contract gives both the buyer and vendor time to get ready for signing the deeds – however, if you are able to do the due diligence quickly and within a month, you may be able to skip this part of the process and move straight to signing the Title Deeds or public contract; this is the final part of the process for when everything is in place and can often be anything from one to six months after the initial signing, depending on what has been put in place.
Step six: Time to sign
Assuming you get the green light from your lawyer, it is time to sign the contract. You will need to pay a deposit in the region of 10 percent at this point. You will not get this back should you pull out of the deal once the contract is signed. Again, remember to factor in fluctuating exchange rates on this overseas payment and check out the best way to send the money with a currency specialist like Halo Financial.
Step seven: Completion date
Signing the deeds
On the date of completion, you will sign the title deeds in front of a notary from each party. The mortgage deed will be signed at the same time and it is this point when the property becomes yours and you can have your title inscribed in the land registry. If you are unable to be present in Spain for this, you can arrange power of attorney for someone else to sign the document instead; usually your solicitor. If you decide to use power of attorney, this must be organised within good time and authorised in front of a Spanish notary, Spanish consulates in the UK, or a British Notary Public.
Choosing a notary
As the buyer, you have the right to choose the Notary to witness the signing – your solicitor will be the best person to help with this. The Notary does not work for either side of the purchase, however, as the person who chooses the notary, you will be the one organising the date and time of the signing.
Having your funds in place
You will need to make sure that all necessary funds are in Spain and accessible by the date of the signing, and agree a method of payment with the vendor. It’s usually expected that this will be by bank-guaranteed cheque issued by your bank in Spain, but you may also be able to transfer the money directly to the Notary’s escrow account. Ask your currency specialist about the payments options available to you.
The right documents
You will need to bring certain documents with you to the signing, so it is of paramount importance that you check this in advance. You should check with your solicitor and the notary, but as an absolute minimum, these documents will include your passport or Spanish residency card, and your NIE number. You will potentially also need birth and marriage certificates, and official translations of these. You may need to bring a few hundred Euros in cash for any petty expenses, such as settling a shared property tax for the year, if necessary.
The Notary is required by law to run specific checks before they are able to witness the deed of sale – such as confirmation that the vendor is the genuine owner of the property and that there are no unexpected impediments on the property. It’s also really important to make sure that you and your solicitor have read through all documents and are familiar with all information in advance. This completion contract will be overseen by the seller and their lawyer, the bank representative if a mortgage is involved, the estate agent and the translator, as well as the Notary.
Reading the documents in Spanish
Once everything is in place, this is a relatively straightforward procedure. The Notary will check all identity documents and various details on these to ensure they are correct. They will then read all documents aloud in Spanish – which is why it’s so important to make sure you have your solicitor or translator with you. These documents will include all the financial aspects of the purchase, a detailed description of the property and the agreement, and a mortgage deed if necessary. Once this has all been discussed and no objections have been made, all deeds are signed and you will receive the keys to your new property.
After the deeds are signed…
You will be able to keep an unauthorised copy of the deeds, while the Notary keeps the original copy to record before they are passed on for the land registry. You may also need to settle the notary fees at this point.
There are a number of tasks that must be carried out after signing – some of which can be done by your solicitor; these include immediate notification of the transaction to the land registry, paying any taxes to do with the purchase and the mortgage (if appropriate – taxes will usually need to be paid within 30 working days of the date the deeds were signed), updating the Cadastre with your details regarding the property, and setting up utility contracts.
Consider any future payments you will need to make internationally for your property now that you have successfully purchased – bills, maintenance, or mortgage payments, for example. Talk to Halo Financial about saving on your regular payments to and from Spain.
Estate Agents and viewing properties
Finding the right estate agent for your overseas property search is vital to a successful international property purchase. They should do far more to help you than just show you a selection of properties abroad. Often, an agent’s local and country-specific knowledge is key to finding the right area, property and even lifestyle overseas. Halo Financial’s property experts offer their top tips to find the right real estate agent for you.