What should you think about when buying a house or an apartment in Spain.

I am not a professional real estate agent. But I am (technically  I was) a real estate attorney and my husband and I own a few properties in Spain now. So I am talking about buying a property in Spain only through the eyes of my personal experience.  So let`s start and talk what you should realize about the whole process of buying any kind of property in Spain. In one sentence I would describe it as: “It will take longer than you think and will be more expensive than you expect”.

Let`s dig into the details and count everything together.

titulo de propiedad

Counteroffer. Let`s assume that you spent a nice vacation in Spain and looked at a couple of properties for sale and even fall in love with one particular apartment. The asking price for the apartment is 60 000 EUR. You looked at it with your own eyes, you know that you have some money on your bank account and you have an insatiable desire to live on the Mediterranean coast and come to Spain a few times per a year or even move here permanently. In other words you are seriously thinking about buying this one particular property.

What is the first step? To ask a discount.

Seriously. Spanish culture is very close to Asian or Middle East culture. You will be not judged if you`ll ask for a discount. Instead I would highly recommend to do it.  My personal experience shows that it`s better don`t actually to ask for a lower price but to make a counteroffer. Yes, some Spanish have such an interesting idea about their pride that they could be offended by  your offer, but most people are pragmatics. They want to sell, that`s why if you ask you have a pretty good chance to get much lower price than the asking price. And it could make a big difference. Not once when we looked at the properties with the price range over a half of a million euros, we told the owners that in our opinions it doesn’t cost more than 350 000 and the sellers agreed… So now you have my advice – ask for a discount – will you follow it or not depends on you.

What`s next?

Buying a property in Spain

Preliminary contract (or contract of intend). The reality is that even if you want to buy a property right away and a seller wants to sell it immediately, both parties are actually not ready to sign the contract. There are many reasons why. The most obvious of them look like these:

  • You need to open a bank account in the local bank
  • You need to get an NIE (a local tax pay ID number}
  • You need to transfer you money and probably to exchange the currency
  • You need to wait for the results of the due diligence
  • A seller needs time to move away
  • A seller is waiting for some docs …

But at the same time you want to lock the property and the price, and your seller wants the same things (to be sure that you are on a hook now). A normal and reasonable period of time between signing a contract of intend and a contract of sale (in Spanish it calls “Compraventa”) is 30-90 days. However you, depending on your particular circumstances could ask for a longer time gap.

Usually  on the day of signing a contract of intend you will make a deposit. The amount of money is discussed with a seller.

You may be also interested in reading: “How to get a residency in Spain“.

After signing a contract of intend you can devote your time (or your money) to get a due diligence done. You can hire local lawyers for it or rely on the real estate agents who help you to find a property. We used both of these ways and I honestly have to admit that in Spain there is no difference will you hire a lawyer or not if buying a property.  Most of the lawyers in Spain are expensive, they actually don`t make your life easier, they not always motivated to protect your interests. And the biggest thing is also this: your protection as a buyer is guaranteed by the system of signing a contract and transferring a title. Each and every contract signs at a notary. A notary also checks that a property you are buying doesn’t have serious problems (for example the property is not pledged), that a person who sells it and signs a contract actually has all the rights to dispose of the property and the notary also will make a contract you`ll sign… For all these notary services you`ll pay of course, but the price is consistent (about 1% of the cost of the property) and doesn’t go higher or lower. It means you`ll pay anyway. And if so why not let the notary to do the job. So to hire a lawyer or not, is all on you. After a couple of experiences with the Spanish lawyers I prefer now to ask to do a due diligence to a real estate agent I am working with and to let a notary to do the rest.

A real estate contract (Compravente)
A real estate contract (Compravente)

And now we know that our expenses just have been grown 1% (a notary cost). Let`s assume that we don`t hire a lawyer and saving some money on it but whom we will have to hire for sure is a translator.

Translators. According to Spanish law a notary must be sure that you understand every little detail of the contract you are about to sign, that`s why if your Spanish is not great yet, you have two main choices: to hire a translator or to find a notary who speaks (or one of his employees) the language you understand. The cost for a translator is about 80-100 EUR per an hour. And because it`s not so easy to find somebody who actually will work during summer time or during many of local fiestas (holidays) I use notaries who speak English. It also will take some time to find a notary who does it by him/herself or has an employee who can translate for free. But in the cities where are many expats live, it`s probably the easiest way to go. So I would recommend giving it a try.

But if we have to hire an interpreter, let`s assume that it will take for about 2.5-3 hours for him/her to translate everything. And it`s how we know that our expenses will probably be raised to 300 EUR or more.

Property in Spain

IVA.  What else? IVA – is a Spanish tax you will have 30 days after signing a contract to pay. The cost is 10% from the property price for all residential properties and 20% for all commercial or simply not residential properties (including privet garages, parking spots and etc.).

Money exchange. Another item of expenditure is money transferring and money exchange if you don`t have a Spanish bank account open already and don`t  have savings in euros.  You can rely on your bank to do the transferring for you or use one of the professional money exchange services. My personal experience shows that the money exchange and money transferring services offer better deals.  And this could really matter when you are going to transfer and exchange a few thousands in your national currency.  If you`ve never used any kind of money exchange services I would recommend to try Currency Exchange, Transfer Wise or UK Forex. I regularly use one or another and compare their offers before make a final decision.

Transfer money-page-001

You also should keep in mind that you will be charged for taking cash from your Spanish bank account and it might be not cheap. The deal is that you`ll have to bring check to the notary at the closing day.  For letting you to write a check most of the Spanish banks charge over a 1000 EUR (yes, it was a surprise for us too). Another option is to use a guarantee of Bank of Madrid who only one and alone can issue a guarantee which will be accepted by all the notaries around Spain.  Of course Bank of Madrid also will charge you for it.  In most cases for issuing a guarantee Bank of Madrid charges about 0.5% from the amount of money you are going to transfer to your seller account.

Also you will have to pay for the additional services:

– getting NIE if you are not doing it by yourself;

– opening a brunch of your company and getting CIF, if you are buying a property for a corporation;

– lawyers expenses if you are planning to hire them;

– and for sure it will be something else, what just doesn’t come to me mind right now.

But even if I forgot something at least you have some estimate what to expect when you are thinking about buying a property in Spain.

Summing up.  I would say that you should keep in mind that you will spend addition about 12% from the real estate cost to be able to  close on a spanish property.

As for the timeline…  In my oppinion it`s more luck than strategic planning. The main principle of life in Spain could be called: “If you can postpone something, just do it!” And the main Spanish word you`ll constantly hear everywhere will be «mañana», what means tomorrow, but in a real life may mean the day after tomorrow, next week or later. 

Just be ready that “tomorrow” according to your personal expectations nothing will happen. Getting NIE, opening a bank account, finding a notary, transferring money, due diligence, finding a translator…. All of this will take time. More time than you probably expect and count, reading this article right now. But a good thing is that as soon as you sign your contract (compraventa) seating in front of the notary, you can relax, you job is done. The notary will do the rest for you: will send the contract for the further registration and will send you a property title in about 7-10 days after signing the contract. Of course after it you`ll have new fights for the simplest things and new “mañana” for everything. You probably will struggle with transferring the bills (community payments, gas, water and etc.) on your name, looking for a contractor to do some renovations and so on.

view from the water

The main advice I would like to give to everybody who thinks about buying a property in Spain is to relax and learn to wait. Just remember the magical word – “mañana”: everything could happen tomorrow, next week, next month or some day later.

You may be also interested in reading: “How to get a residency in Spain“.

And despite that I am still learning how to be relaxed and accept “mañana”( when I am in a hurry it`s not easy), I like it hear. I love the weather, I love the climate, I love my sea view when I have breakfasts, lunches and dinners, I love the medieval town I live in and incredible Spanish food… I love may things here, that`s why I am learning how to relax and accept “mañana” as a reality of my new life here.

I hope this article will be able to help you in some ways. If you have any questions or your own experience of buying a property in Spain, please share in the comment section below.

 

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