Spanish Property Buying Process

Property Selection: Before you approach the property market in Spain you should have a good idea of what characteristic you wish your Spanish property to have. Then do some research to establish the cost of such a property in the area you wish to buy in. Also talks to a variety of agents in the area, these agents tend to have the local knowledge and the current information to help guide you through the property selection process. Then armed with all this information you will be in a strong position to approach the area for viewings.

Agreeing the price: Once you find the property you wish to purchase the next step is to agree a price with the vendor. Again the agent will be instrumental in reaching a verbal agreement, at this stage the verbal agreement should be passed to your selected lawyer to formalize the agreement.

You need a Lawyer: For anyone buying a property in Spain, the single most important piece of advice is to find a good English-speaking lawyer who will thoroughly research the Spanish property you intend to buy and ensure that the Spanish property is free of debts and restrictive clauses, and who can provide you with a Nota Simple. Make sure your solicitor checks the property registry, which will show immediately if the vendor owns the property and whether there is an outstanding mortgage (mortgages can be sold on with the property in Spain).

Property reservation: Once all the searches have been completed and you have the Nota Simple it would be advisable to place a financial holding deposit to ensure the property is reserved in your name and this ensures the property will not be sold to another party.

Preliminary Contract: Once a price has been agreed with the vendor both parties are best advised to sign a preliminary private sales contract, a Contrato privado de compraventa. However, before signing this preliminary sales contract proof that the vendor owns the property and that it is free of charges should be demanded. In Spain debts are charged to the property and any outstanding mortgage will be passed on to the purchaser. A Nota Simple will confirm if a property has any outstanding debts on it.

Then, unless you are paying in full and in cash immediately, a private preliminary sales contract (Contrato privado de compraventa) is drawn up containing all the details such as a description of the property, purchase price, and date of completion. At this stage you will be expected to pay a deposit of between 5% and 15% of the purchase price, and the estate agent will hold these funds in a bonded client account. If you intend to raise finance for the purchase this private preliminary sales agreement should have an arres agreement (i.e. a 10% deposit) and a date specified for completion. It is possible to sign the private preliminary sales contract without such a deposit and technically you are permitted to sue a vendor who subsequently withdraws but with an arres agreement in place. Should the vendor decide to withdraw you are entitled to twice their deposit as compensation.

Final Contract: On the completion date the balance of the purchase price (sales price minus deposit). The vendor and purchaser then sign the Escritura de compraventa contract, which is equivalent to the Deeds of the property. The purchaser is then issued with the public deed of conveyance (escritura) in front of a Notary Public, and a copy will then be passed to the tax office and on to the property registry. The Notary Public in Spain is a public official who will be required to witness the deed of sale, however expert, independent legal advice should be taken to protect your own interests.