What do you need to do and what are the steps to owning a beautiful property on the Costa del Sol? Read this post to find out 🙂
If you’ve already read our post Turn your dream into reality with a good investment, you’ll know that you don’t really have much to wait for if you’re thinking of buying property abroad. Now we’re going to describe the steps to buying property in 7 steps.
1.
CHOOSING AN AGENCY
While you can navigate the property-buying process on your own, those acquainted with the Spanish temperament, working methods, and communication style might recommend having an experienced and competent professional by your side.
When acquiring a new property, this service is typically cost-free for the client. Even when purchasing a second-hand flat or house, it’s usually free because the buyer and the seller’s estate agent share the seller agency’s commission, already included in the sale price. From a purely financial perspective, using an agency in Spain is worthwhile, saving you stress and ensuring a confident selection and purchase of your second home.
When opting for a new property, we showcase the best projects on the Costa del Sol tailored to your preferences. If you select a completed project, you’ll have the chance to visit it on-site. The purchase contract for the chosen property is then signed at the property developer’s offices. At the handover, you gain possession of your new apartment or house. It’s a straightforward process, adhering to the property developer’s payment schedule, which usually involves an initial deposit and 20-40% upfront financing—standard practices in our home country too.
For pre-owned properties, the process is a bit more intricate, but no need to worry 🙂
2.
PREPARATIONS
NIE Number: All property owners in Spain must possess this tax number identifying foreigners. While you can apply for an NIE number in Spain, the simplest way is to apply at the consulate. We can assist you with this, and you should receive your certificate within two weeks.
Preparation of Funds: Given the fast-paced market, it’s advisable to have the full purchase price ready. Choosing a property takes just a few weeks, and missing out on a good offer due to insufficient funds can be frustrating.
Property Search: While idealista.com is an excellent starting point, it often features outdated offers. We utilize the internal system used by Costa del Sol agencies to find the best deals. If an ad on idealista catches your eye, we’ll certainly follow it up. The goal is to find the most suitable apartment or house for you. It’s crucial that we contact the seller early on to avoid charging a separate agency commission, as the seller’s agency should know who the buyer’s agent is from the start.
3.
PROPERTY VIEWINGS AND OFFERS
Viewings for selected properties will be scheduled in advance with the seller. Presence is required from all parties involved, including the buyer, buyer’s agent, seller (or authorized representative), and the seller’s agent.
Initially, having multiple individuals in one location may seem unusual, but it becomes a routine. When planning multiple property visits, it’s important to consider time and traffic; therefore, it’s not advisable to schedule too many viewings in a single day.
If a property aligns with your expectations, swift action is advisable, given the fast-paced market. While negotiation is possible, significant price reductions exceeding 5% are rare due to limited supply. Sellers are aware that a buyer will likely emerge sooner or later.
4.
ENGAGING A LAWYER
Though it’s feasible to manage the process without a solicitor, having one significantly enhances safety.
Our partner, Malaga Solicitors, boasts 25 years of experience with over 7500 property sales. The solicitor’s fee is 1% of the purchase price, an additional but worthwhile expense. This also safeguards against potential complications if the seller and their agent had less than straightforward intentions.
5.
DEPOSIT AND INITIAL PAYMENT
Once the law firm is authorized, all communications go through them. A deposit of €6000 is paid into their account. The lawyer requests officially available documents and necessary proofs (title deeds, IBI, last paid utility bill) and conducts thorough checks. The 10% deposit will be paid only if everything is in order. Signing a deposit contract is essential, outlining that the buyer forfeits the 10% deposit if they withdraw and that the seller refunds double the amount received if they withdraw. From this point forward, the journey to your new property proceeds smoothly.
6.
CONTRACT AND TRANSFER
Following the reservation contract, a sales contract is drawn up, detailing obligations and the payment method, including the deposit. Spain’s property sales regulations favor buyers.
The signing occurs before a notary, with the lawyer present. The full purchase price is paid to the lawyer’s office, and a cheque is presented at the signing for the property keys. At this point, the property belongs to the buyer, and the seller loses access.
7.
TAXES AND UTILITY BILLS
Utility bills (water, electricity, gas) are transferred to the new owner’s name, managed by our lawyer.
In case the seller was not a Spanish tax resident a 3% non-resident tax is paid to the tax office. Based on the current rules a 7% property registration tax must be paid within 45 days of the sale contract, too. The lawyer ensures timely payment to the tax office.
In summary, the process, while a little bit more complicated than for a new property, is manageable with our help smoothly. It typically takes between 1.5 to 2 months, so initiating the process in March can ensure ownership of your beach house by summer.
