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Buying a PropertyA property is usually the biggest individual investment in your life so it needs to be given serious thought. Rainbow Estate is pleased to offer you the following advice and guidance to hopefully make this process smoother for you.Step One: You need to decide how much you can spend, the area you want to buy in and the type of property. Consider your personal requirements. It's a lovely idea to buy a detached 4 bedroomed villa in a plot of land with its own pool but do you really need 4 bedrooms? If you are only thinking about providing a room for your summer visitors, it would be cheaper to rent somewhere for them, since the rest of the year those unoccupied rooms will be empty. Consider the cost of maintenance and cleaning of the garden and pool, your annual rates will also be higher and don't forget the monthly community fees have to be paid. A little property in the middle of nowhere with 5000m2 of land and Spanish-speaking neighbours may seem idyllic to anyone thinking about retiring here but do remember that although you are active and mobile now, what happens if you get ill or the car breaks down? The 5000m2 of land still needs tending and how will you get to the nearest town without transport?. You may have limited amenities with water from a well and often even a cess-pit that has to be emptied. And it's unlikely that you'll still be able to tune into Coronation Street! Is the property for you to live in or to rent out? Consider the facilities available. The Costa del Sol is also known as the Costa del Golf and attracts many winter golfers. If you want as many rentals as possible on your property during the year, it needs to be located near to golf, beach, shops, bars, restaurants and other facilities. So, let's assume you've considered every pleasure and pitfall, what's the next step? Step Two: Try and visit agents in the area you have chosen, look at the property magazines and agents' websites. Since properties in Spain are often advertised with more than one agency or with a network of agencies, it's sometime pointless trekking round many agents as you'll only be offered the same property. Choose an agent who is professional, has experience and can satisfactorily answer all your questions. Agents fees are paid by the vendors so this service will cost you nothing. Property purchase in Spain has a different process to that of the UK so make sure you understand exactly what will be involved. Do not allow yourself to be pressurised by an agent into buying, making an offer or paying a deposit on a property. Even if you lose the one you've chosen, there will always be another. 'Buyer Beware' is a good adage to bear in mind. Step Three: You've considered all options and you've chosen the property you want to buy, you now need to make a verbal offer. The agent will negotiate on your behalf until a price is agreed. Step Four: This is the start of the legalities and unless you are totally au fait with the Spanish system for purchasing a property, you should appoint a lawyer. There are many lawyers on the Costa del Sol who speak English. Lawyers usually charge 1% of the purchase price but do confirm his fees. He will request a Nota Simple (proof of ownership, details and dimensions of the property and any mortgages or incumbrences on that property). He will undertake the necessary searches and complete all legal requirements of the sale. He will require current receipts for payment of the IBI (Impuestos sobre Bienes Inmuebles) - the annual property tax which shows the Valor Catastral - the assessed value upon which your tax is based. The vendor must also provide a certificate from the Community as proof that no payments are outstanding. Ask for the latest Community AGM Minutes since they are useful in identifying any problems within the Community. A Declaración de Obra Nueva and Declaración de Bienes Naturaleza Urbana are also required if you are buying a new property. Step Five: At this stage, you will usually be asked to pay a holding deposit of between 3,000 and 6,000 euros which ensures that the agent takes the property off the market and reserves it for you. Be absolutely certain that you will complete the transaction since this deposit is not usually refundable. If you are applying for a mortgage, you will now need to present all relevant documentation. Step Six: After satisfying his searches, the solicitor or the agent will draw up a private contract formalising the offer and setting out the terms and date of completion. You will be asked to pay a 10% deposit (less the holding deposit) within 30 days although this date is often negotiable. Step Seven: If a mortgage is required, the bank will formally value the property. You must pay for this valuation and it can cost from around 250-450 euros. Step Eight: From 2-6 weeks later you will go to the Notary to sign the Escritura de Compraventa (Title Deeds). Your lawyer and agent will accompany you and an interpreter will be appointed. A representative from the bank will also be there to approve and sign the mortgage. Once all documentation is completed, you will be given the keys and the property is yours. Your lawyer will formally register the property in your name and electricity, water and Community etc payments must also be changed into your name. If you are going to pay these bills by standing order you will need to visit your Spanish bank to instruct them accordingly. Anticipated Costs: Buyers are recommended to usually allow between 7-10% of the purchase price which comprises: This information is offered as a general guideline only |
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