You have found your Property.......what happens now?.......and what is all the jargon?
Having chosen your property and agreed the price and general terms and conditions of purchase it is customary in Spain to place a deposit to secure the property. This acts as your official confirmation that you wish to proceed with the purchase and also aids in preventing the seller from taking other offers (but see below). The deposit is usually 10% in the case of a resale and 3,000 euros in the case of a new build.
UPDATE: If you want to secure a property whilst you are visiting Spain it is important you have sufficient funds available and we would recommend having 3000 euros available via online or telephone banking for when you find your ideal property.
3000 euros should cover the full deposit on a new build property and will be sufficient to 'Hold' a resale pending the balance of the 10% being transferred on your return home.
Please note that a 3000 euro holding deposit is really only an 'Intention to purchase' and will not necessarily stop the seller accepting alternative offers. In Spain if the seller backs out then he has to return twice the amount of any deposit paid so if only 3000 euros has been paid then they only have to return that 3000 plus 3000 euros of their own and if the alternative offer they receive is more than 3000 euros greater then they are in profit. This is only likely to apply to resale properties but it is the reason we always recommend paying the full 10% as soon as possible to secure the property.
If you do not have access to internet or telephone banking then we will request the seller "holds" the property whilst you get home and transfer the money over - however as this can take some time sellers are less than confident over the sale and if they get another offer they may well take it.
Whichever option you choose it is always worth opening a trading facility with a Commercial Foreign Exchange company such as Moneycorp before you visit Spain. There are big advantages in using a company such as Moneycorp and if the account is set up before you go you will have no delays in transferring any money over to Spain should the need arise (it also costs nothing to open the account). For more details about Finance and Moneycorp click here.
In the case of a resale property, completed New Build or a plot of land the following normally applies:-
- 10% deposit on signing of contract
- 90% On signing the Title deeds usually 6 to 8 weeks after contract however this can be negotiated to suit both the vendors and purchasers individual needs and could be extended to 3 months or even longer.
When purchasing an Off-Plan property the payments are usually broken down into stage payments at different levels of the build. A typical example is as follows but can vary from builder to builder:-
- 30% within 30 days of contract
- 30% half way through the build programme
- 40% (less deposit) On satisfactory completion of the building and the handing over of the Title Deeds
These payments can sometimes be negotiated to suit individual purchasers needs, subject to the builder’s approval.
Please note there is a trend in the newer holiday apartment developments to only have an initial stage payment and then the balance on completion - this initial payment can vary from 10-30% - this is obviously Good News as it allows you to hold on to your money for a lot longer!
IN ALL CASES THE INITIAL DEPOSIT IS FULLY REFUNDABLE IF YOUR SOLICITOR'S SEARCHES PROVE UNSATISFACTORY.
Considerations when buying an old Cortijo
Buying an old property cannot be taken too lightly as there can be issues associated with ownership and debts. If the property has been handed down from generation to generation of Spanish family then there is a strong possibility it does not even have a current Escritura (Title Deed) proving ownership or any documentation stating where the boundaries of the land are. However these problems can be simply overcome as long as you use a local Spanish Solicitor from step one. They will ensure that all necessary checks and supporting documentation are in place before you commit any major sums of money. In fact our solicitor will usually carry out initial checks prior to even putting the properties on the market - if there are any major problems....she leaves well alone and we look for alternative properties!
Please note that rules are now being tightened on reforming 'Ruins' that are located on rustic land. In many areas you can now no longer reform or rebuild the property. As the rules are changing all the time we will thoroughly check out whether permissions are likely to be available before you purchase. Do not purchase a ruin unless you know you can get permission to reform.
Unlike the UK where home buyers always instruct a solicitor when purchasing a property, not everyone in Spain does and it is perfectly legal to purchase a property in Spain without instructing a solicitor. Everyone has heard the horror stories. ALL these problems could have been avoided by instructing a solicitor. There is no substitute - use a qualifed independent abogado (Spanish solicitor). The cost of this varies but is usually around 1000-1500 euros. Most work on a fixed charge and are able to give you a complete breakdown of their costs and charges before you instruct them.
We have our own English speaking abogada who can act totally on your behalf. Click here to see details then close the window to return here.
Not to be confused with Abogados (Solicitors). The Notary function is to witness the signing of all public documents, in this case your Title deeds or Escritura before their inscription in the land registry. It is the responsibility of the Notary to verify title to the property. Notaries will also witness the signing of Powers of Attorney and Spanish Wills.
This is your title deed and will be signed in front of the Notary on completion of final payment. Once signed this document is sent to the land registry where it is registered in your name and a first legalised copy is given to you (Copia Simple). Your solicitor (usually about one month later) obtains the original and sends it on to you once it comes back from the Land Registry.
Registro de la Propiedad (Land Registry)
Not only is this where your Title will be lodged, it is also where your solicitor will carry out all the original searches concerning your property by obtaining a Nota Simple as all debts on a property to be a "Valid debts" must be lodged here.
The NIE is a fiscal identification number that everyone from outside of Spain will need for tax purposes and is on all legal documents in Spain - your Abogado can assist you in obtaining this. There are no restrictions on obtaining one it is purely a matter of filling in the appropiate forms when you are instructing your solicitor. If you want your Abogado to obtain your NIEs for you you will have to give them Power of Attorney - alternatively you can apply in person. This is best done in Spain but can be done in the UK by visiting one of the Spanish Consulates (London or Edingburgh).
All in all buying a home in Spain can and should be a very simple matter. We certainly try and make it so and we hope that this web site with it's buying guide will be of assistance.
It is however only intended as a guide and should not be used in place of professional legal advice.
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Villa in Huercal-Overa, Almería
Cortijo/Country House in Huercal-Overa, Almería
Cortijo/Country House in Albox, Almería
Cortijo/Country House in Huércal-Overa, Almería