Whilst there are of course many unknowns and individual preferences that come into play when choosing to buy a property abroad, there is actually a very definite process that you can follow when buying a home in Spain so that you never lose sight of your goal, you’re not swayed by external pressure and you maintain a calm grip on the entire proceedings the whole time.
In this, a complete guide to buying a property in Spain, we’ll guide you through each small step in the sometimes lengthy process towards researching Spain and finding the exact and perfect property to meet your requirements. We begin with the planning and research stage and take your right through to completion and receiving your title deeds.
If you, or someone you know, is thinking about buying a home in Spain, this guide should prove invaluable to you, and it will allow you to structure your buying process correctly whilst informing you of everything you need to know and what you can expect to happen along the way.
Despite the negative publicity that Spain has received of late in relation to falling property prices, the fact of the matter is, as Britons, the nation is one of our favourites. The nation is so stunning, so diverse, so close and has such a great climate – what’s not to love! Many see the current situation in Spain as the opportunity that they’ve been waiting for for years. Vendors and developers are so keen to sell in this stagnant market that there are bargains to be bagged, and what’s more, everyone knows that these downturns in the market are part of a cyclical process. I.e., as long as you’re not buying property in Spain hoping to turn it around and make a fast buck, you’re probably buying a very solid investment for the long-term.
The very first piece of the property buying process puzzle is deciding why you want to buy a property in Spain. Your decision will guide many elements in the rest of the process. So, are you buying for investment purposes, if so do you want rental income or is capital appreciation more important to you? Are you buying for family holidays, for you to live in and work from, or as a retirement property? With a decision clear in your mind, you can look at any property with this fundamental conclusion guiding your choice. I.e., if you’re buying an apartment in Spain to let to the tourism m sarket, you will surely then look at each property with your potential tenant’s tastes and desires in mind rather than your own.
Next you really need to get a firm handle on your budget. Before you even begin to look at properties you should have sorted out your financial affairs so that you will then know what you can and cannot afford. Are you going to be raising a mortgage or remortgaging an existing property? Will you be interested in stage payments for an off plan property, will you use credit cards for a deposit, are you going to sell something such as an investment policy or second property to raise funds? You need to make these decisions and then take financial advice to determine how likely it is you can get a mortgage/remortgage, or how much you can raise from selling an investment asset for example.
With your figure in mind, factor that between 10 and 15% of that money will have to go on fees and charges, therefore take that off your lump sum figure and you will be left with your budget to guide your search for a suitable property.
You next need to do some intensive research with books and the internet guiding you. Look up estate agents, developers and architects in Spain, shortlist your towns and areas, take recommendations from friends and from forums and be active in looking into which types of property are for sale in the areas you’re interested in. When you’ve looked at plenty of property offerings and got a fair idea of what’s average for your budget, then you can enjoy drawing up a shortlist of what you ideally want from your new home in Spain.
First of all be as specific as you can be about where in Spain you want to be. Think not only about the specific town or district location, but whether you want to be in a rural location, near to the sea, in a town, in the mountains, close to a village or in an urbanisation. Factor into your planning some of the accessibility issues that we’re always talking about on Degtev – do you need to be close to public transport, an airport or a motorway? If you’re renting the property out, it’s important it’s within an hour’s drive of an airport for example. And then think again about the amenities you want to have within reach. If this is to be a holiday property you’ll probably want to be near bars, restaurants and some sort of nightlife. If this is a retirement property what about having basic services within reach – from a hospital or clinic to a supermarket? Finally, which property type most suits your requirements – an apartment, a farmhouse, a resale or a new build for example?
At this point you can include any specific ‘must haves’ and ‘definitely don’t wants’ such as the size of the property, number of bedrooms, pool etc., but try and also keep an open mind. The next stage is to go on a research trip to Spain…this should not be confused with an inspection trip! Whilst you should be arranging to meet any developers, agents or architects that you have singled out as being of interest to you, and this will likely result in your viewing properties, this is not the visit in which you should be putting money down and signing contracts. So, arrange those meetings as well as your flights and accommodation, and enjoy a busy few days or weeks in Spain.
Note – as soon as you begin meeting estate agents, developers or anyone with a property to sell, expect the ‘hard sell.’ You will be put under clever pressure from these people to buy – you will be made to feel like if you don’t sign for that ideal property the minute you see it, you will lose your chance to buy it forever. Well, there is always more than one ideal property, and if you really do want to make sure that you’re doing the right thing, you will take all the time you need to get to know everything about Spain and property before you make any commitment at all. Take all you hear with a pinch of salt, stay firm and true to the process!
Once you arrive in Spain you need to research the areas that you have shortlisted as potentially being ideal for you. Check out the accessibility, look at the amenities and facilities, remember that if you visit during the peak season that things will look very different in the winter! Visit estate agents and developers in the town or region and get a feel for what they have on their books. Pick up a feel for the property types and average prices. Repeat this process for each and every single shortlisted town or area and then stop and take stock. Have you got the area research right? Are the places you’ve visited ticking all the boxes for you, are you likely to be able to find the property you want at the price you want to pay in the given area? If not, don’t panic. Your time has not been wasted at all, you have successfully ruled locations out and therefore prevented yourself from making an incredibly expensive mistake. Simply regroup, research again and begin this research trip part of the process once more going over the new areas you have identified as being of interest to you.
Whilst you’re in Spain, think again about your finances, speak to agents and developers and architects and lawyers to get an idea of all fees and charges. It may be wise to open a bank account in Spain and then when you return to the UK, you can transfer about 15% of your budget to it as working capital with which you can make deposits and pay taxes and immediate charges when you’re ready to proceed. Remember that you will never get the best exchange rate from your bank, so look at the currency specialists out there and speak to them about your euro transfers and getting the best transfer and exchange deals.
Now you’re back in the UK it is another chance for you to regroup and reconsider all your options and decisions so far. You can then plan a proper inspection trip back to Spain to revisit the specific areas you want to buy in and to revisit agents and developers you’re keen to work with. Again, arrange flights and accommodation, but also arrange more detailed appointments with property sales persons. You may wish to revisit some properties or developments you’ve already seen, or you may prefer to forward any revised criteria to your agents so that they can set up plenty of viewing appointments for you. You will need to find a lawyer and also sort out your NIE number on this visit as well, and you should have your funds agreed if not available so that if you do find a suitable property on this visit, you’re in a position to buy it.
Be ready for each of your accompanied viewings. Whilst you need to be very specific in terms of your budgetary criteria for example, remember to try and keep an open mind and be flexible. Take a notepad and a camera with you on each viewing, make very detailed notes and plenty of pictures of each property to remind you what it is like. You can miss so much on a quick viewing – so it can be worth writing down a list of points to look out for in advance of any visit, that way if the view is breathtaking and distracting, you’ll still remember to check the state of the roof and the plumbing before coming away! Also, make a note on a map of where each property is!
After all your viewings you can make a shortlist of properties that appeal to you – make sure you then revisit each property by yourself. Try and meet and speak to neighbours, find out what you can about the property. Visit the nearest town or village and look at the amenities, think about the accessibility of the property. If the property needs work doing on it you need to bring in an architect immediately to advise you about whether the work can be done, what permissions you will need and how much it may cost. If you’re keen on a specific property or two, it’s then time to speak to your lawyer who can do preliminary basic searches into the viability of the sale.
With all the information you need available to you, it’s time to pick your property and make an offer. In this current market climate don’t be afraid to offer well below the asking price. Be ready to negotiate! Once an offer has been accepted you sign a conditional purchase contract that protects you and your deposit in the event that your lawyer finds something untoward with the property, its deeds or the vendor’s right to sell it. You will usually pay a deposit of about 10% at this point. If you haven’t already you will need to set up a bank account and have an NIE number in place – your lawyer or estate agent can help you with this. Now you need to keep a very close eye on your chosen lawyer and ensure they get on with searches and checks in a timely manner to meet the conditions of the contract.
Meanwhile, you need to sort out your money and have it ready to transfer to pay for the property. You lawyer will then let you know when he has completed his checks and hopefully he will advise you that you can proceed. You will need to return to Spain unless you have given your lawyer power of attorney. If you’re signing the contract in person get your flights and accommodation booked and travel to Spain to your estate agent or lawyer’s office. They will advise you of the process that follows, but it will include you ordering the money for transfer from your bank on a specific day. Usually you get a cheque or banker’s draft. You will attend the notary’s office with the vendor – your lawyer will arrange this. You need to re-read all contracts and when you’re happy you will all sign, you will hand over the money, they will hand over the keys and that is almost the end of that! Your lawyer will advise you of all other payments and fees that you need to make, some will be due on this date. And in about 6 months to a year you will finally get the deeds to the property!
The process to buy is very straightforward – but getting the research right is the key to whether they whole purchase is a success. So, take your time, don’t rush or be swayed by estate agent’s veiled threats, and remember that this is one of the most important purchases you will ever make, so it is worth taking the time to get it right.