Buying a resale property in Spain

When you do find that property, ask the agent if the vendor is likely to accept an offer, some vendors price to sell, others price a little high and expect to be knocked down, others will wait until the market reaches the value they have set. It is impossible to generalise as we have so many different nationalities living here all with their own sales - purchase cultures, let your agent be your guide.

The next thing you should do is find an abogado [Spanish lawyer] before you sign anything or pay any deposits to anybody. An abogado will charge around 1%. of the purchase price, this is great value, your abogado will look after your financial interests, and give you peace of mind, a very valuable commodity when buying a house.

Reservation deposits and payments paid to an agent are not legally binding on the vendor, you should never pay money to an agent or agency. If you pay money to an agency you will be tied, unless you leave you money behind! Reservation deposits for new developments should be made directly to the developer, After you have spoken to your abogado, and all other payments should be made by or under the supervision of an independent abogado [Spanish lawyer] in this way your interests and your money will always be protected, and you will be sure that the sales purchase contract is in your name and not in the name of the agency, this may be convenient for the agency, but you will have no legal claim on the property. It is only when a sales purchase contact has been agreed and signed by both parties and 10% paid that the vendor is legally bound to sell you the property, which is why there is no point in paying any reservation deposits to an agent.

Generally 10% of the purchase price transferred to your abogados clients account will be sufficient to take the property off the market while your abogado makes the searches, and you arrange your finances, the 10% will be handed to the vendor by your abogado when everything is checked out and the sales purchase contract terms have been agreed and signed. If a vendor will not accept this show of good faith to take a property off the market, or an agency asks you for any money you should immediately consult an independent abogado, if the abogado cannot convince the vendor to accept your terms, then walk away, there are other properties, keep your money in safe hands, deposits given to agents are not returnable. Never use the same abogado as the vendor or interests may be compromised. Use an abogado from a well known independent company of abogados, we can recommend well respected independent English speaking companies in all areas.

Property Buyers Guide

The Spanish legal System and land registration process is different to most other countries and is not to be tackled by the do it yourself type. I have heard of unfortunate people having problems buying property in Spain, all of them could have been avoided if the purchasers had used professionals and common sense, as always buyer beware.

Property owned by companies: You should also consult a specialist abogado, if the property that you wish to purchase is owned by an offshore or Gibraltar based company and you wish to consider purchasing the company that owns the property. You will then not only be dealing with a property purchase, but the cost of maintaining an offshore company or companies, Spanish and international taxation. The administration costs, new laws and taxation, now applied to properties owned by offshore companies must be carefully studied, these companies are set up by specialist tax lawyers, and you should use one too if your are considering buying such a property or the company that owns it.

Most of the advantages previously applicable to properties owned by offshore companies are now heavily taxed, the Spanish tax authorities are well aware of all the practises and will fight you for every cent of tax advantage!

Properties owned by Spanish S.L. companies also need close assessment, if the tax authorities think the beneficiary of a property owned by a company has changed, all the transfer taxes will still have to be paid in any case, you will need specialist advice.

Next: Conduct a search. Nota Simple The next step in conjunction with your lawyer and agent is to do a search on the property at the Registro de la Propiedad, the Registro for a small fee will supply a Nota Simple for any property. It will give you the details of any Mortgages on the property. A good agent acting directly for the vendor will probably already have a copy. Buying a property with a mortgage attached is not a problem, as long as you know about it beforehand!.

Your lawyer will advise you on the cost of continuing with it, paying it off or re mortgaging.
Make an Offer: Next if all is well, and your lawyer is happy, with your agents help you should make an offer and firm details up in writing, covering all the points to be negotiated, these should include:

• The Price
• The declared price, see the declared value on the escritura [title deeds]
• Payment Method and Currency
• Fixtures and fittings
• Furniture [with inventory]
• Who pays which taxes [especially the plusvalia]
• Take nothing for granted, include it in the offer, presume nothing.
• This way you only have to negotiate once and there should be no hold ups or surprises.
• This is where the skill of the agent comes into play carefully bringing the vendor and buyer into a harmonious agreement.
• Having funds available at this time will convince the vendor you are serious.