What to expect when buying in Spain.
Prior to arriving in Spain you should make sure that you have at your disposal sufficient funds to cover the reservation sum. This can be anywhere between 3000-6000 Euros, but may be greater for higher priced properties. You can usually pay by credit card or cash. If you do not have the means to lodge a reservation sum immediately, you risk losing the property to another party.
There are many excellent local lawyers in Spain who are fluent in English. A lawyer will provide the legal guarantees for the purchase of the property ensuring that Spanish legal requirements are met and that the property is bought free of encumbrances, charges, leins or debt and is up-to-date in all its payments of local contributions etc. Using a lawyer from your home country will substantially increase your legal costs and most certainly delay the sales process.
Once there is a verbal accord between parties, the next step will be to formalise the terms of the offer in writing. It is normal practice in Spain to include with the offer a reservation deposit until the exchange of private contracts. This initial reservation deposit will be held in our clients account or your appointed lawyers client account. This money is protected until the time of completion and is never given directly to any private vendor.
Upon acceptance of the offer by the owner the next step in the sales process is to exchange private contracts of sale or to sign an option to purchase. This normally takes place within two weeks following formal acceptance of the offer. Your lawyer will have completed his searches and investigations of the property and will have arranged with the owner the procedure for the cancellation of any outstanding debts. The private contract of sale or option will reflect all the agreed terms of the offer and sale and set out the date for final completion at the notary. It is customary practice at this stage to pay 10% of the purchase price.
A sale is formally completed in Spain when the public title deeds of purchase are signed before a notary, the final payment made, and possession given to the buyer.
Once signed, the notary will fax a note of the title deeds to the local land registry. Your lawyer will also pay on your behalf all the relevant transfer taxes associated with the purchase and will handle the formalities of registration of your title deeds. Final registration of the deed may take up to two months. Similarly, your lawyer will arrange for the transfer of accounts with the local suppliers of utility services such as water and electricity and organise their payment through a local bank.
There are, in principal, three fees and two taxes to pay when purchasing property in Spain. As a rule of thumb, you should estimate that the combined total of these amounts will be around 10% of the purchase price.