Guide to Spanish Buying Process – The steps to buying a property in Spain
Stage One: Holding Deposit
The first step when you find a property that you want to buy is to enter into negotiations with the owner regarding the price and the terms and conditions of sale. This is a non-binding process.
We always advise our clients to use a solicitor for the purchase and can recommend several solicitors that speak English.
Upon your offer being accepted the first stage is normally to put down a holding or reserve deposit to take the property off the market. The amount of the deposit varies from property to property depending on the price. The reserve agreement will normally be subject to legal checks being carried out and will not set a time within which the pre-sale agreement should be signed.
Stage Two: The pre-agreement – Contrato Privado de Compraventa
We always advise our clients to use a solicitor for the purchase and can recommend solicitors that speak English and other languages.
Unless you are paying in full, and in cash immediately, you will need to enter into a Contrato Privado de Compraventa (essentially a preliminary sales contract).
This is normally a simple agreement in which the Seller agrees to sell the property, and the Buyer agrees to buy the property at the price agreed. This will contain all of the relevant details such as description of the property, purchase price and date of completion. At this stage you will be expected to pay a deposit to the seller, this is normally paid to the seller’s account and is normally 10% of the agreed purchase price but this amount can vary.
Included within this contract there is normally an arras clause. Should the seller decide to withdraw from the sale you are entitled to twice your deposit as compensation. Should you decide to withdraw your deposit is lost.
Of course, the buyer and seller may choose another type of agreement if they prefer.
Prior to entering the contract, the following checks will need to be carried out:
a) Check on planning status
b) Check on Title and whether the property has a mortgage or is being sold free of debt
Stage Three: Final Contract – Escritura de Compraventa
Prior to completion non Spanish buyers will need a Spanish Tax Number of NIE. We can advise you how to go about getting this.
On completion date the balance of the purchase price (sales price minus deposit) and any fees payable by the buyer must be paid.
The seller and buyer then sign the Escritura de compraventa contract, which is equivalent to the title deeds of the property.
The buyer is then issued with the public deed of conveyance (escritura) in front of a Notary Public, who certifies the transfer, and a copy will be passed to the tax office and onto 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.