Buying A House In Spain

Owning a sleek apartment in costa del sol, Madrid, or costa blanca in Spain is everyone’s dream. Despite the soaring real estate prices, the country remains an excellent location for dream holiday homes. That is because of the warm temperatures and the better quality of life you enjoy while there. If you are approaching retirement, it’s one of the few places in the world that will accommodate you. In addition to all these advantages depending on the value of the house you can obtain the golden visa or if we do not have 500.000€ you can retire in Spain with the non lucrative visa.

Statistically, Britons are rushing to Spain to acquire properties and makeup to 14% of foreign buyers in the country. Not even Brexit could put them off. To most of them, buying a property abroad is a lifestyle. Other European, Asians, and Americans are following suit.

While the rest of the world suffers from the global economic crisis, Spain is not an exception. The looming pandemic continues to inflict its citizens and the economy. Recently, figures revealed that real estate prices dropped to lows of 30%; however, many residents’ buying a property continues to rise. The overall ownership stands at 80%. Spain expects this figure to rise.

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What Are Some Of The Places Where You Can Buy A House In Spain?

In terms of culture and location, Spain is a diverse country. If you get fascinated by foreign languages, learning Spanish, among other cultural heritage, are some of the baits that will make you want a home in spain. It is one of the countries where you will enjoy the sunshine for more than 300 days a year.

With this in mind, you can live anywhere in Spain, from its coastal regions such as the beautiful Costa del Sol where you can find cities like Marbella, Malaga, Mijas to other inland cities like Granada and Seville. The country extends its boundaries to the Mediterranean and Atlantic. If you are a lover of shores, you can choose the Canary or the Balearic Islands. You can also move inland to the countryside. Residential properties here range from the village houses (Fincas) to country estates to upmarket Fincas. The great news about buying a house in spain is that they have plenty of lands to maximized for other purposes such as farming or recreation. There are also incredible landscapes like valleys, mountains, and rivers if you love nature.

City life comes with luxury and style. World-famous cities like Barcelona and Madrid are a marvel. You can check the best cities in Spain. A home in spain cities from apartments in skyscrapers to maisonettes, bungalows, and townhouses in the suburban. Your options are many with the right guide and a transparent real estate agent. Now you know that you can own a house anywhere in Spain. Let’s now get you to the various factors to consider when buying a house in spain.

Buying A House In Spain: What To Consider

If you are a citizen or resident, you may be aware of several procedures for buying a house in spain. You may not know everything there; it is prudent to research and understand the dos and don’ts. It is more involving if you are a foreigner, but this should be a leisurely sail-through with the right guide. Our guide will include the legal requirement, some of the snags involved, and how to avoid those.

The first and most important thing is to choose the city where you want to buy the city, here is a post where we explain the cheapest cities in Spain.

Legal documentation of the house

Buying a house that has legal documentation is possible, courtesy of scammers. As an expatriate, it’s your responsibility to do due diligence by conducting a thorough search about the house you intend to buy to determine if it is legal. Some several certificates and permits prove the legal status of the house. Check out these at the Property Registry.

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Construction Permit

The Spanish government is in charge of granting all construction permits and certificates through the various town councils. Get an expert to verify if the documentation matches with the ones at the town council offices. Illegally constructed houses have construction flaws and are substandard.

Occupancy License

This is the administration’s first occupancy license to show that the various utilities like water, electricity, gas, and telephone are safely fitted and fall into the required standards.

Property Registration Certificate.

Spanish administration requires that all new buildings have insurance cover to protect the occupants from construction defects that may cause injuries. Most defects and flaws are hidden but may show up later when you are comfortable living there. If you plan buying a house in spain, get a real estate expert to get things straight for you before you buy such a property. A copy of the Property Registration Certificate verified at the necessary property registrar’s office will tell you the house’s legal status.

The Owners Association Statutes

The document is a deed to show rules that govern buying property in spain, especially on horizontally owned buildings. These restrict endless problems common with apartments and gated communities. They can include pet ownership, upgrading your drainage, changing your roof, and others.

Mortgage Status

Buying a house with an existing mortgage is a complicated process. Watch out for that because the process involves pending interest rates with banks, among other procedures. There are many houses that you can choose from that are mortgage-free. Sometimes, you may find that the only available option is buying a house in Spain with an attached mortgage. With the help of an excellent property attorney who understands Spanish property law, you can go through the processes smoothly.

To avoid flaws, scrutinize all the charges thoroughly and understand the legal requirements before buying a home. You do not want any pitfalls that will strip you of your cash. At the Property Register, you will get the house and the mortgage details. The Lender should have all the details, including the outstanding debt and interest rates. You will have a chance to negotiate for better terms since the bank is interested in cancellations or a new loan.

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An important note is that if you are buying a house in spain with existing debt, it is risky as a liability for you. That automatically makes you liable. Be sure to check out if there are any other debts besides the mortgage. If any, they should be discussed and included in the contract document. Many foreign buyers have fallen prey to this trick where they end up paying for hidden debts from the initial contract document.

Do you want a mortgage in Spain for non-residents? find out more in the posts about mortgages for non-residents in Spain.

Cost

The purchase price of different houses varies with the house’s area, size, and the estate agent involved. You can negotiate the costs involved. These are not fixed. As the buyer, you should be aware of the commissions and legal fees involved. These include;

• Legal fees (1% to 2% including VAT)
• Land registration fee (1% to 2.5%)
• Notary fees (1% to 2.5%)
• Property transfer tax of existing property (6% to 10%)
• Property transfer tax (new property – 10%)
• Title deed tax (1% to 2.5%)
• Estate agent fees (3% of the sale price)

Financing

Most expatriates do not consider mortgages when buying a house in spain because of the weary processes involved; however, they can still secure funding from their home countries. If you are a foreigner, you can check out more about mortgages from your country. You have the option of negotiating with Spanish and foreign banks on lending. Some international organizations have deals with their foreign staff on lending. You can check out for such opportunities. You will find it easier that way.

Assuming that you are a non-resident and are going for a Spanish mortgage, your funding will be limited to borrow 60-70% Loan To Value (LTV). LTV is a percentage of the property’s assessed value. If you are a resident, you will be lucky to get 80% funding on the LTV or the property value. Again, that will depend on the mortgage type in both cases.

When dealing with any financier, you must do so with a property attorney and a notary. Most financiers will seal off the agreement when you get complete ownership of the house. That is to your disadvantage and makes it essential to have a flexible contract to opt for another financier if the current cannot fund you.

Mortgage lenders will not complete a mortgage agreement until you own a property. It’s essential to include a clause in the property purchase contract to pull out if you cannot acquire a mortgage. There are several guides to mortgage financing in Spain. You can take your time to go through several of those with your legal and financial advisor. That will guarantee you an intelligent decision.

Real Estate Agents Or Direct Purchase?

Real estate agents are the leading players when buying a house in spain. As a foreigner, you may find it hard to trust vendors offering a direct sale. We recommend that you go for agencies because they make the process easy for you. If you do your research well, you are not likely to fall into scammers. Some laws protect you in all your purchases. Follow the correct procedure to avoid pitfalls.

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You will find real estate agencies in hundreds of online portals, especially Spanish ones. There are different types of such agencies in Spain.

The Spaniard Real Estate Agents

These agencies are owned and operated by Spanish agents. They are associations of various professional agents with a high level of integrity, indemnity, and training. Their associations include the API and The GIPE. They are a better option if you are a resident and understand the Spanish language. The Spaniard agencies have a drawback in that they have a language barrier and therefore unsuitable for non-Spanish speakers and foreigners.

Corredores

Corredores operate in rural areas. They tend to know the communities selling properties more than the Spaniard agents. Though they are at a disadvantage due to the language barrier, they can be beneficial with an interpreter’s help. Corredores will help you get a house in Spain in the countryside. With a commission fee of 1% of the purchase price, the Corredores are cheaper from foreign and Spaniard agencies.

Foreign Agencies

Several foreign agencies have Spanish property listing. Most of these are UK-based, but they will offer their services regardless of your origin country. Their fees are slightly higher than the Spaniard agents and Colledores.

Multi-Listing Networks

These are networks of foreign estate agencies that share clients and properties in Spain. They also share the commissions depending on the collaborations they have made on the sales. The problem with multi-listing networks is that they set up higher fees and commissions to maximize the sharing.

Your choice of the agency that will help you in buying a house in spain should not be hasty. Take your time to go through the websites and make an intensive comparison of many agencies. Some of the principal agencies you could consider are Idealista, Kvero, thinkSPAIN, and Servihabitat.

Purchasing Procedure

With an agent of your choice in mind, you are now braced to go for the dream property in Spain. But one thing is pending; the procedure that you will follow to get hold of that house. Skipping parts of the purchasing procedure means disaster for you. After you have contacted the right agency, you need to follow these procedures to avoid losing your hard-earned cash through scammers.

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Viewing The House

Your real estate agent will arrange for a viewing of several properties so that you can make a choice. At this stage, you can gauge if the agency is a good one. If they are open-minded and offering varieties, then stick with them. After settling on a house that suits your needs, make an offer with the seller’s agent.

Your agency should smoothly facilitate buying a house in spain since they know the seller’s agent. Start involving your independent lawyer and a notary at this stage. When hiring a lawyer or attorney, check out whether they are registered and inactive practice (Colegio de Abogados). Get their registration number for verification. You will give them power of attorney. A mishap can mess the whole process.

Any legality will not bar your choice of a notary, but they must be trustworthy and honest. You will not require a notary officially during the registration process, but they are essential in witnessing signatures on the property negotiations. They also draw necessary contracts on your behalf and give you counsel regarding the purchase of your property. A notary is aware of all the legal fees you will pay during the entire process.

To agree on the price, begin with a lower price than the asking price. When you reach an agreement, your notary will help write the offer and facilitate both you and the seller’s signatures.

Survey

We advise you to conduct an intensive survey with your attorney and a building expert to rule out any defects and flaws in the house. Do not engage yourself in further discussions if the house has structural defects such as large cracks, bends, curves, and leaking roofs. Some of these cannot be corrected and can lead to hefty losses on your side. Consider both the valuation and building survey reports before making any further steps. If everything is in place, move to the verification of the property documents.

Verification Of Document

Earlier, we discussed the various documents that show the property is legal for sale. Your attorney and notary should help you verify that at the property registry. That’s a step to make sure what you are buying is credible and safe for occupation.

Sales Contract

Your notary draws the document, but your attorney should go through it and advise you more. If the contract doesn’t favor you, you can ask your attorney to cancel the process. The seller signs the sales contract, buyer, both attorneys, and the real estate agencies involved. After the sales contract is signed, your lawyer can facilitate the transfer of funds from your bank account

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to the seller’s to seal the deal. You already gave him power of attorney; therefore, the process should be smooth. Make sure you pay the taxes (VAT) to the vendor and the capital transfers to the government through an authorized bank.

Registration Of The Property

With the help of your notary, register your house at the Property registry to protect yourself from fraud. If your home is in the countryside and intends to buy land, visit the country’s land registry for more information. You will require all the property documentation and your nie number to do that.

Home Insurance And Utilities

Once you are through with buying a home, you need a cover. Like any other asset, you need insurance for your new home. Get that as soon as possible to cover your home against any sought of damage. With a nie number, you should be able to set up the various utilities such as water, internet, waste disposal, and telephone to make your life more comfortable when you move in.

Your plan of owning a house in Spain now looks simpler with the above guidelines. Nothing bars you from having a holiday home in the Spanish Costas, coral islands, and the native villages. You can plan your retirement early enough by getting hold of a reputable agency to help you through. You will find the process easy, exciting, and rewarding.