Q. Why should I buy with Espana Properties, when here are hundreds of other companies to choose from?
A. Espana Properties are a small, family business. We don’t pretend to be otherwise.
For this reason, and because we don’t handle massive volumes of sales, we work very closely with our clients offering a one-to-one service from start to finish. Our clients are not just numbers, they are important and often end up as friends.
We have staff in England and Spain, so we know the markets and areas we sell in very well. We only work with a small number of Spanish developers, so we have excellent knowledge of their portfolios and can engineer great deals.We don’t follow suit with the many agents who still hide property details, names of developers and other important information. We get paid a commission, we hand some of the commission back; this provides our clients with a genuine discount that is not available to the public. Simple and very transparent.
We trade on our honesty and integrity. And we now have regular clients who continue to come back and work with us again; we think this tells our story in a way that many larger companies can’t.
Q. How do I go about buying property in Spain?
A. Find a company you feel comfortable with, someone you feel you can trust and doesn’t try to sell to you from day one!
Many agents have ‘shared’ properties in their portfolio, so you should save time by building a trusting relationship with one agent, rather than taking the time consuming step of shopping around.
When you find your dream property, a holding deposit (usually €3000) is payable to reserve the property. This is usually paid directly to the developer, thus alleviating a common, British media generated (and usually wide of the mark) concern with unscrupulous agents walking away with hard-earned savings!
A reservation document is drawn up which means that the property is taken off the market, and the purchase price is fixed. At this stage, we advise our clients to speak to a local lawyer (unless they have already secured a lawyer’s services) who will advise them on the completing the purchase. Usually, within 30 days, private purchase contracts are then exchanged. At this stage you (your representative) will be required to pay your first instalment, usually between 15% and 30% of the purchase price. During construction, some developers´ payment terms require further payments to be made.
Come completion day you will need to pay the balance of the purchase price and once you (or your solicitor) has signed the title deeds for the property, the keys will be handed over.
Q. I’m worried. What if the developer disappears or goes bankrupt before completion?
A. Developers must now produce evidence they have in place a bank guarantee or an insurance policy. So, if the developer runs into difficulties such as bankruptcy, the purchaser’s solicitor can arrange for the return of all monies paid to date, plus interest (usually at 5/6%).
Espana Properties only work with developers that are fully insured and have their paperwork/licenses available to clients.
Q. Do I need to be present to sign the title deeds on completion?
A. The notarial system in Spain is never as clear-cut as in other countries.
We usually advise clients to arrange for Power of Attorney, so that the lawyer can sign on your behalf in the event you're not able to be here at the time.
Only once deeds are signed and the keys are effectively handed over to you, can your lawyer arrange for the utility contracts with water and electricity companies. This can take time, so be sure to build this into your plans before hot-footing it out to the sun!
Q. I’ve heard of IVA, but how much should I really allow on top of the purchase price for costs/expenses?
A. As a rule of thumb, allow for between 10% and 11% of the purchase price as costs. These are as follows:
IVA (or transfer tax) 7% - Payable with each staged payment
Stamp Duty 1% - Payable on completion
Notary & Land Registry
Fees approx 2% - Payable on completion
Legal Fees - approx 1%
Q. What are ´community fees´ or urbanisation fees?
These are costs that cover collective expenditure relating to the external fabric and upkeep of communal areas, e.g. pools, gardens, paths, staircases, external painting, security etc. These are calculated (discussed and agreed at local AGMs) and divided by the properties that form the development or urbanisation. These vary dependent upon location, amenities and quality of the area.
Usually, it’s around €250 - 550 per year, which can be paid quarterly from a Spanish bank account.
Q. Are mortgages on my Spanish property easy to get? Also, what is the current Spanish mortgage market like?
A. Banks in Spain will usually lend up to 80% of valuation to non-residents and they are now very up-to-date with requirements of the foreign purchaser and very competitive in the mortgage market. Self Certification and even Interest only products are now becoming available via some of Spain’s banks. There are various ways of financing a Spanish property purchase, and the best way will very often depend upon your personal circumstances.
Some of our clients choose to release equity from existing UK, European or American property to part-fund the purchase, and then take a Spanish Euro mortgage – this protects somewhat, from any violent moves in currency exchange. Spanish mortgages are paid directly from a Spanish bank account, which you will need to have set up yourself or by your lawyer.
Spain’s interest rates remain at enviable lows (around 3%) and investment in real estate remains an attractive option for the future.
Q. How do I cost effectively transfer my money to Spain?
A. You will have to convert your local currency into Euros and as exchange rates vary constantly, often by the second, timing is of the essence.
The rate of exchange achieved is hugely important; Espana Properties can help with this aspect of your purchase, as we work with several foreign currency specialists who can guarantee us the best possible rates.
