Buying a property in Spain? What should I know? The WPBC tells you more. We all dream of having the opportunity to buy that charming house or that beautiful apartment in Spain. In Ava Landing We are glad to have had the opportunity to work successfully on this happy project helping citizens from more than 70 different countries to buy their home in Spain and, for this reason, we understand very well the doubts that the foreign buyer may face when the time comes. time to start the purchase process:
You find a house you like, and suddenly your first worry strikes when you’re told that it’s customary to give the reservation money directly to the sellers. Despite the distrust that this may generate at first, it is a very agile, economical system, and also safe as long as a few minimum precautions are taken, allowing you to buy a property, if there are no complications, in just a few days if you want.
To whom and when do I give the money when I reserve the property that I like? What do I have to sign when I give money on account of the price to be protected?
Sounds good, right? To the real estate agents too, that is why they usually pressure us to sign a reservation as soon as possible and that is why normally what they will want to make us sign will be a “deposit”, a real private contract of sale that will allow us to regret the purchase losing the signal and that compromises the seller to sell under the conditions and price offered.
The rules of the deposit are simple: money is given to agree on the sale of a property at a price, a time to carry out the purchase and some conditions. Outside of them, backing down is always penalized so that if the buyer changes his mind, he loses what was delivered and if the seller changes his mind, he has to give double (yes, double!) to his potential buyer, leaving then the contract automatically terminated for both parties. Therefore, it is a firm commitment that deserves a minimum of attention before signing.
This contract can be signed remotely electronically, in person or by proxy. And by being able to collect the conditions and agreements that will be introduced later in the public deed of sale, it is a magnificent opportunity to make the necessary inquiries and leave already agreed everything that you want to reflect at the time of signing the deed before a Notary, which will be who then verifies that the agreed conditions have been met.
Wait a minute, so it is not signed before a notary, who gives me security about what I sign, who do I give the money to? What if you have any debt for which the property responds?
The Spanish real estate market is very powerful and mature worldwide. Having proven, strong and highly guaranteed legal mechanisms to act with full guarantees for investors if the private contract is breached, and can then even request the intervention of the Notary to prove their breach. In our years of experience, the problems are anecdotal and in the vast majority of cases there has been no need to go so far, precisely because the law is very guarantor regarding the conditions detailed in the sale.
For peace of mind, security and to make the operation agile, the normal thing is to hire an independent lawyer and outside the real estate company, to check the property documentation, evaluate any possible risk and take into account the preferences of your client to reflect them before signing. the Arras.
It is important to have several days to prepare this information and in the meantime visit the property several times, since in Spain you buy a True Body in the state it is in and “with the meters that it has at a glance”, that is to say , that a price is paid for the Property and not for the m2 of it. In addition, previously evaluating all these conditions with your lawyer will give you the opportunity to make an economic offer before signing if there is a small handicap. In other words, in Spain, the moment of signing the Reservation and preparing the “deposit agreement” can be used to negotiate the price as well as to obtain peace of mind.
Thus, for example, it is important to deal with whether there are pending charges (mortgages or a debt), if the building has passed the Technical Inspection, if it has the certificate of occupancy or the Urban Planning License is not out of order, if there is furniture included in the price and its fiscal consideration, who pays the different expenses of the operation, what documentation is required to be provided in the notary’s office and even, how an extraordinary expense of the community that has already been approved but will be turned over the year should be distributed. next…
Any particularity, doubt or question must be assessed at this time before we sign and pay, since the seller will be obliged only in what is reflected there and in nothing more than his legal duties.
In the middle of all this process, it will be when, as soon as you contact your Lawyer, he will ask you: Do you have a NIE and an open account in Spain? Do you live here or do you live abroad?
The NIE is the only document that you will have to request in order to make a sale in Spain, it is your tax number to pay your taxes in Spain. The best thing is that you don’t even have to do it in person, a Power of Attorney and the legitimation of your passport will suffice so that a professional can obtain it for you without you having to stand in line, make an appointment or travel (extremely convenient!).
We always recommend processing your request within a prudent period of time, since it is managed by the Ministry of the Interior of the Government of Spain through immigration windows set up for this purpose at the Police Station and, as a general rule, a prior appointment is required and may be delayed in some offices. where they have more workload (in bad times more than 1 month of waiting). It can also be requested at Spanish Consulates and Embassies abroad.
As it will only be necessary at the time of signing the Deed, it is normal that in the meantime the Deposit is formalized and hence the importance of anticipating the time necessary to know that you will have it on the committed purchase date. Failure to do so could mean breaching the contract if there is no provision in this regard and we exceed the date, and may have the risk of losing the quantities delivered.
There are always solutions such as proposing to renew the deposit in exchange for returning more money on account of the price and for the Seller to wait for us to obtain the NIE, but it is always better to be proactive and avoid it, right?
Okay, I’m going to sign and pay. Can I make a transfer directly from my country?
Although for the deposit signature it is possible to operate the payment from anywhere in the world to the seller’s account, it is likely that depending on the country of origin, the seller’s bank may block the transfer and ask you to provide personal documentation about your income by regulation from banking compliance .
Technically, the most practical thing is to open your own bank account in Spain since once we pass the bank compliance of the opening, it is assumed that the amounts received in said account from abroad and that will be used in the sale are already justified by having given the relevant explanations about the origin of the funds to the bank. This avoids giving additional explanations to the notary later or the additional cost that would entail paying the Notary to act as depositary of said amounts (it can be sent to him, but they charge for it), in practice many Notaries even hinder acting as depositaries to receive money from abroad for reasons of compliance.
In addition, in any case, we will need to open an account in Spain to pay and domicile different expenses such as taxes related to property, supply contracts (water, electricity, gas), community fees, home insurance … as well as to issue Checks or Transfers via the Bank of Spain, which are the payment methods used in Notaries to certify the means of payment, so it is important that this financial institution has an office open to the public since these means are not offered quickly through online banking.
We recommend checking the cost of receiving money from abroad, the cost of issuing checks and making transfers to avoid surprises with unwanted commissions. In our case, we check for our clients the conditions for non-residents and we assist in the opening of accounts, as well as the compliance process. To try to make the process as comfortable as possible, we can take care of everything with a Power of Attorney with the only requirement that the bank requires the person’s physical presence at least once to verify their identity at the time of opening, so which is important to take into account when planning the purchase process.
And the time has come to sign before a Notary, but what about the notary?
It may draw the attention of many that, in Spain, the Notary will only appear at the last minute when the deed is about to be signed, normally we will always deal with an Official in the meantime who will receive the instructions to mount the deed, consulting what is appropriate with your Notary. The Notary will verify in detail if the terms reflected are agreed by the parties, and will require the required legal documentation to prove it. Only when professionals (promoters, banks, etc.) intervene with an individual are the minimum guarantees and formalities required raised.
And how is the price paid at the notary? How come the property I bought still has a mortgage? Am I going to buy a mortgaged house? Do you have other debts?
The most frequent practice is to pay by nominative bank check in the name of the seller or by a special type of transfer via the Bank of Spain (OMF). Both are secure payment methods that certify that the money can only be collected by the seller once it is signed, without the possibility of undoing the payment. To make this possible, it is necessary to have a bank account open in Spain with a financial institution that allows you to operate with these means of payment (many online banks do not allow it), so we always recommend going to physical offices.
Making all payments for remaining debts linked to the property at the notary as part of the price is a common practice that gives the buyer security about the economic cancellation of said debt if they still exist at the time of signing. Thus, if the property still has a tax pending payment, the notary will require the letter that accredits it and that amount will be deducted from the amount received by the seller.
Moreover, our legal system allows a buyer to pay the remaining part of the mortgage as part of the price and the remainder to the seller if the latter has not paid off the mortgage financially prior to the signing, deducting for this all the costs of the cancellation ( including management). It is more practical to do it in a notary before a Notary Public and in this way because the opposite would mean having given the money to the Seller to enable him to carry out said management.
All these procedures result in the property being sold “free of charges and encumbrances” and that it can be sold with such agility in Spain safely. When signing, you will be given the public deed of sale collecting all these particularities and the original will be registered in your name in the Property Registry.
