Buying your property in Spain should always be a pleasurable and stress free experience!
Once you have chosen you ideal property and agreed a purchase price you need to reserve the property with a reservation deposit to take the property off the market and secure the price for both the buyer and vendor. The amount of reservation deposit depends on the type of property. If you are buying a plot and having a villa built the reservation deposit is normally €5000 with stage payments. Resale purchases normally require a €3000 or €5000 reservation deposit according to the value of the property. This money will not be handed over to the vendor until all the legal searches are confirmed.) Please remember to add around 12% for buying costs to your villa purchase price.
Once the deposit is paid you will need to apply for an NIE number (we do this free for our clients). There are several ways of obtaining the NIE number, going direct to the local police station; we use Benidorm for this purpose. Alternatively, you can use the Spanish embassy or a regional consulate, in your own country.
Mortgages. It is possible, in Spain, to take over any existing mortgage on a property, providing you qualify financially, or you can apply for a new mortgage. We guide our clients through the application procedure. We would always insist on your behalf, that your solicitor made sure any initial reservation deposit was 'Subject to Mortgage'.
Solicitor. Make an appointment to see a local solicitor who speaks your language; we can offer advice on this. It is very important when you are buying in Spain to use a solicitor, rather than a Gestor. They will guide you through the entire procedure safely, and are protected with professional indemnity insurance.
Once the reservation deposit is paid the solicitor then starts the legal searches on the property, these include a legal health check (making sure that there are no outstanding debts). If you do not want, or if you are unable to attend the notary appointment then you can give your solicitor POA to act on your behalf. (POA would be for this transaction only). This has to be done by you in person, with your solicitor, at the notary. The drafting and notarization of a Spanish Will, covering your Spanish assets is strongly recommended at this stage.
Purchase Contract .Once all the searches are completed to the solicitors satisfaction the purchase contract is drawn up and given to both parties to sign. At this stage mortgages would have been approved and NIE numbers would have been issued. Once this has been signed the reservation deposit is made up to 10% of the agreed purchase price. This is then given to the vendor. It is at this stage the date for notary is made. The buyer and vendor choose the date between them, it can be straight away or a delayed date. The notary date is firm but moveable by mutual consent; if the buyer does not turn up for the notary date he will lose his 10%, if the vendor does not turn up then he has to pay back the 10% plus a further 10%. A daily fine is charged until the monies are paid.
Notary. On the day of the notary your solicitor will either accompany you, or represent you if a PoA has been arranged; also the Bank Manager, if you are taking a mortgage. You will need your passport, the solicitor will have all your other paperwork. Once you sign the contract and pay the remaining 90% of the property purchase price, the property is yours.
What is a NIE number? An NIE Number is a tax identification number to be used in Spain. Prior to purchasing a property, selling a property, obtaining a mortgage, starting up a business or working in Spain, it is a requirement by law that every individual possesses an NIE Number. The actual NIE Number, when produced from a National Police Station in Spain is printed out on an A4 sheet of paper, and this sheet of paper is often used as a form of identity. Once you have been issued an NIE Number, it is yours for life.