Spanish Property Buying Process
The property buying process in Spain is well defined, regulated and fairly straightforward. However, there are a lot of differences between the UK and Spain not least the language so we always recommend using bilingual experts throughout the process.
One of the first jobs to sort is a National Identity Number (NIE) and a local bank account. This can be sorted on a viewing trip but we can also support setting up these aspects via a local Gestor if it needs to be done remotely.
At this stage, we also recommend appointing an independent locally-registered bilingual solicitor to act on your behalf. This is a critical role and we would be happy to recommend appropriate experts to act on your behalf.
If finance is required, we suggest that a lending-in-principle decision is obtained. This will prevent problems later and will help with negotiations with the seller.
Depending on whether there is a mortgage involved, timescales tend to vary between one and three months for completion. Property taxes and costs are heavier in Spain than the UK and it would be prudent to budget approximately 15% of the purchase price in expenses, taxes and charges.
Once your ideal property has been found and a price agreed, the buying process can be split into three broad stages.
The first is signing the Reservation Agreement and payment of a deposit typically between €3,000 and €10,000. It is important to get this agreement validated by your lawyer to check there is no commitment and you should be able to receive the deposit back if there are problems such as finance or surveys. Once agreed, this deposit will take the property off the market for a period of between 15 and 30 days.
The next stage is to agree the Preliminary Sales Agreement (‘Arras’). This needs to be completed before the reservation period expires. This agreement specifies the sales terms such as the price and exact property details to be sold. Once this is signed, the deposit will be lost if you need to withdraw. If the sellers withdraw after this point, they have to pay the same amount to the buyers as penalty.
During this period, it is important to ensure all necessary funding is available locally. We always recommend using a currency exchange specialist which typically provide rates 4-5% better than your high street bank.
The final stage is signing of the sales contract (‘Escritura’). This is done in the presence of a Notary and marks the formal handover of the property. The Notary is a Government appointed official to ensure the correct taxes have been paid, the contract terms are legal and to publicly witness transfer of the property.
Our industry body, the Association of International Property Professionals has produced an excellent guide to buying a property in Spain which is available here.
Also available, is a Glossary of common terms encountered when buying property in Spain.