How the Buying Process Works in Spain
The buying process in Spain is usually very straightforward but the key to a successful transaction is to employ a Spanish qualified lawyer who speaks your language so that you can clearly understand each step of the process. If you are unable to attend the signing of the contracts it is possible to give your lawyer a power of attorney to act on your behalf for the purchase of the property.
Once you have found the property that you want to buy the first step is to inform your lawyer of the verbal agreement that has been made with the seller. Some estate agents will ask you to immediately pay a reservation deposit to take the property off the market - at Blue Flag Properties we never take money from a client and would strongly recommend that you only pay money through your lawyer.
The lawyer will carry out the initial checks to ensure that the seller is actually the owner of the property and that the correct paperwork is in place for the property to be sold. Once satisfied a private contract will be drawn up to be signed by the seller and the buyer. This contract will contain all the details of the property, the agreed price and the date of completion for the purchase. A deposit of 10% of the purchase price is usually paid at this point which is held in a bonded client account until completion.
Arranging financial matters
If you are applying for a mortgage in Spain the bank will require original documentation about your personal financial situation and details of the property that you are buying. The bank will arrange an independent valuation of the property before determining the amount to be lent.
Before completing your purchase you will need to acquire a NIE (número de identidad de extranjeros) number which is used to identify you to the tax authorities but rather confusingly is obtained at the local police station. This must be applied for in-person although your lawyer can assist you through the process.
Before completion, the remaining funds to complete the purchase (less any mortgage granted) plus the funds to cover the associated costs of the purchase need to be transferred to your lawyer.
Setting the date of completion
Unlike the UK the concept of chains does not exist in Spain. When an owner agrees the date of completion in the private contract it is totally independent of him arranging the date to complete on buying another property. In fact, many sellers will complete on selling their home first before even starting to look for a new home.
On the day of completion of the sale, the purchase contract is signed before a Notary, the purchase price (less any outstanding mortgage) is paid to the seller and you receive the keys to your new home. The Land Registry is notified of the change of ownership and you will be issued with the new title deeds for the property.
Note: This summary is for information only - always consult a lawyer before starting the buying process.