If you have already located the Spanish property you want and come to an agreement with the seller, the purchase process might go pretty quickly. When there is no need for a mortgage, the Spanish typically complete the Escritura (deeds) within a few days of viewing a home, making a small down payment, and signing the act at the Notary. Once the paperwork is finalized, you can take possession of the property. However, this is not the best course of action for a non-Spanish speaker purchasing their first home in Spain. If you want to be sure the property you want is entirely lawful and free of potential liabilities, it’s best to operate on a slower ‘escalator’ of risk and commitment. A prudent and reasonable buyer in Spain will take the following steps:
The Purchasing Procedure
First, pull the asset out of circulation. It is in your best interest to have the seller take his Spanish property off the market while your attorney performs the required due diligence and you arrange for financing, if at all possible. Without doing this, you risk losing out on the Spanish home of your dreams that you’ve been searching for. It is common practice to offer the seller a small down payment in exchange for taking their home off the market. Depending on the conditions and the cost of the property, this might be as little as 500E or as much as 4,000E. Payment of this deposit demonstrates your intent to purchase the property and should always be followed by a written contract drafted and signed in the presence of your attorney. Before signing the reserve deposit contract, it’s a good idea to give your lawyer time to check the legality of the Spanish property. The purchase agreement conditions (the property price, the timeline for completion, including a possible date for handing over a 10% deposit, what remains with the property, etc.) should be included in the reserve deposit contract. The contract will also typically have a penalty clause indicating that the seller must repay you twice the amount of your initial deposit if he backs out of the sale. Naturally, this agreement is contingent on the seller’s good title to the property. If this is not the case, he must refund your payment.
Ten Percent Down Payment In most cases, the reserve deposit contract will specify a date by which a 10% deposit must be paid to the seller to secure your Spanish property. The date is typically 14-21 days after the reserve deposit contract. It must be long enough for your attorney to check the property’s legality and undertake any necessary searches to verify no hidden obligations. As such, your attorney will conduct all the investigations and inquiries customary for a lawyer in the UK between the reserve deposit contract and any payment of 10%. His primary responsibility will be to verify that the Spanish property you purchase is free of liens and that you receive a clear title. Your attorney will draft a private contract (similar to Exchange in the UK) outlining the terms of the sale, including the purchase price, deposit amount, payment date, the final date by which the Escritura (the deeds) must be signed, including furniture, etc. The seller will receive 10% of the purchase price in exchange for signing this contract. This is contingent upon any Power of Attorney in place. The typical setting for this is a law firm.
Third, the Escritura (Finishing). The Escritura will be signed on or before the date specified in the private contract, as mutually agreed upon by the parties. At this point, you’ll hand over the rest of the money you owe for your Spanish property (the purchase amount minus your down payment and the 10 percent paid on the private contract). The property’s keys will then be handed over to you, and you can start living there immediately. The signature of the Escritura always takes place in the office of a Notaire. The Escritura will be reviewed by the Notary, who will ensure that all parties’ information is correct and that all Spanish legal requirements (such as the payment of the purchase tax) have been met. You typically receive an oral translation of the Escritura if you do not speak Spanish. The Notaire’s obligation is to the Spanish government, and he is in no position to comment on the merits of the arrangement you have struck.
The preceding can be modified in practically unlimited ways depending on the consent of the relevant parties at any given time. The market and the seller’s motivation to sell are crucial factors. If a buyer in Spain, for instance, needs extra time (say, one or two months) to save up for the standard 10% down payment and sign the private contract, he may put down a higher initial deposit. If a mortgage is involved, this may be the case. The process is generally smooth, and it’s beneficial because you can quickly remove a Spanish property from the sale if you want (and the seller agrees). Unless you do this, any verbal agreement is useless, and the seller will sell to the first individual who shows serious interest in buying the property by making a down payment. When viewing homes, Spaniards usually have between 500 and 1,000 euros on them in case they find something they like. If the seller insists on additional money the next day, they can withdraw it, but the property is immediately held with the down payment.
If you find a property in Spain that you want to purchase, it is recommended that you have a Power of Attorney signed by your Spanish lawyer. This is an adequate precaution to take. Sometimes, things come up at home, at work, or in one’s health that prevent one from returning to sign the Escritura or private contract on the agreed-upon date. If so, your attorney can represent you without your active participation or further authorization. The acquisition procedure is usually a delicate balancing act between moving quickly enough to avoid losing your Spanish home and moving slowly enough to complete all of the necessary legalities thoroughly and on time. Following steps 1–3 in the buying process is unquestionably the best method to move forward. You should never, ever put up with being rushed!
Author of three books about Spain, including “How to Move Safely to Spain,” Nick Snelling can be found online at his website, nicholassnelling.com. He also writes the well regarded Blog:
Read also: https://journalall.com/category/real-estate/
