The Buying Process

Deposit and Contract

The first step is to choose your property and secure the sale by paying a deposit to the seller(vendor). This is called the Reservation deposit. This ensures the property is removed from the market and the price fixed for a certain period of time. Ensure that you have funds available either in cash, credit card or from a Spanish bank account. Paying by cheque from an English Bank account can be problematic due to the delay in clearing and fluctuations in the exchange rate. If you are unable to pay the reservation deposit it is most unlikely that the seller will not reserve the property for you or take it off the market. This delay could, mean you lose your property. When you pay the Reservation Deposit, a Reservation Contract should be signed by you and the seller. This Contract should state the basic terms of the agreement and can include, for example; the property address, whether a garage or storeroom is included, payment terms, estimated date for exchange of contracts and estimated completion date. The Reservation Deposit is usually non-refundable, unless it is specifically agreed to be conditional upon certain factors happening e.g. raising finance or even actually viewing the property, if reserved unseen.

Private Purchase Contract (Exchange of Contracts)

Once the reservation contract has been signed, and the reservation deposit paid to the vendor, there will be an agreed period of time during which your conveyancer will undertake all the necessary searches on your behalf to ensure the seller is the legal owner of the property and it is free from any debts, charges etc.  As in the UK, Spain operates a Land Registry system enabling your conveyancer to conduct thorough searches of title, giving you added security and peace of mind. During this period, the detailed terms of agreement will also be negotiated by your conveyancer and incorporated into a Private Purchase Contract, ready for exchange of contracts. On exchange you should expect to pay between 20% and 50% of the purchase price when buying off-plan and, 10% when purchasing a resale property.

Completion

Formal completion takes place when the title deeds (escritura publica) are signed by the seller and the buyer before a Notary Public in Spain and the balance of the purchase price is paid over. The Notary is a public official whose role is to act as a witness to the signing of the deeds and to ensure that the parties have complied with the relevant legal requirements in the transaction, such as payment of appropriate taxes. It is not necessary for you to be physically present at the Notary appointment and you can, instead, grant a formal power of attorney. Final registration of the title deeds is likely to take approximately 3 months from the time all paperwork is given to the Land Registry.

Post completion

Your conveyancer will arrange for the relevant taxes to be paid and ensure title deeds are registered with the Land Registry. They will also arrange for you to be registered with the Local Authority for payment of local taxes such as rates and rubbish collection. These taxes can be paid by direct debit from your Spanish Bank account. On completion of the purchase of an off-plan property it is unlikely the essential services, such as electricity and water, will be connected on builder supply. Changing can take up to 4 weeks following completion.