Before Viewing

It's very important prior to your arriving in Spain that you should make sure that you have available sufficient funds to cover the Reservation Deposit. The minimum required is 3,000 euros but may be greater for higher priced properties. We recommend that this Reservation Deposit be paid by credit card or cash. A cheque drawn by a foreign bank may take 7-10 business days to clear by a Spanish bank. If you do not have the means to lodge a Reservation Deposit immediately, you might risk losing your chosen property to another person who does have the reservation money at hand to lay down.

Spanish Dream Estates works closely with Europe's major banks and mortgage brokers to give you maximum buying confidence and peace of mind to assist in your purchase. We are happy to arrange a no obligation mortgage consultation during your visit.

There are virtually no exchange controls in Spain which means that whether resident or not, you are free to obtain a loan or mortgage against your property in most currencies and from many banks throughout the world. Spanish banks are very willing and normally happy to lend up to 70% of the value of the property you are purchasing to non-residents.

You will need to bring the following documentation to Spain to speed up the application process:

•  Three months' salary slips

•  Your last three month's bank statements

•  Your last Tax Year P60 if from the UK

•  A photocopy of your income tax returns

•  If Self-Employed, a certified statement of accounts

Choosing The Property

The first step is to set your own parameters with regard to property type, price and area. Once you have established this it will be easier to discuss details such as personal taste, needs and the lifestyle you are looking to achieve. Most agents share their property portfolios. Spanish Dream Estates have access to databases where over 500 estate agencies share in excess of 15,000 re-sales as well as agreements with over 450+ quality new developments throughout the most popular areas of Spain. Don't forget, the more detailed the information you provide us with, the quicker we will be able to find the right property for you. Through our collaboration with these many agents and developments, we will be able to offer the widest selection of properties with on the ground expert knowledge of the prices, investment opportunities and specific characteristics of the local market and the experience to answer all your questions and guide you through the buying process. The agents' fees are always paid by the seller or developer as a percentage of the selling price.

Negotiating the Purchase of a Re-sale/Previously Owned Property

When you find your dream property, the purchase prise and terms need to be negotiated with the seller. Your agent will fill out an Offer & Deposit Receipt Form and a small deposit of usually €3.000 to €6.000 is required to start the negotiations. This form and reservation fee will effectively take the property off the market during the negotiations so that you are not guzumped. Negotiations will then proceed until a price is agreed upon and the next stage is reached. Normally at this stage our clients are introduced to a local lawyer (unless a lawyer has already been engaged) who will advise them on the entire purchasing process, in addition to arranging for the transfer of the monies required for the signing of the purchase contract.

Holding Deposit and Formalising the Offer

After the purchase price has been agreed and your lawyer indicates that all the required documentation is in order and all outstanding charges relating to the property are paid up to date, you will have to pay a holding deposit of usually 10% and reserve it until you can make completion. Your lawyer will prepare a formal offer on your behalf for the purpose of exchanging private contracts.

Exchanging Private Contracts

The exchange of private contracts or the signing of an option normally takes place about two weeks after the formal acceptance of an offer. This contract stipulates all the agreed terms both standard and specifically negotiated ones and sets a date for completion. It is usual for the buyer to pay the 10% deposit at this stage, which is non-refundable.

Completion at the Notary

On the assigned day, buyer and seller (or their authorised representatives via Power of Attorney) sign the title deeds at the notary's office. The final payment is made and possession passes to the buyer.

Buying in New Developments / Off-Plan

A reservation document is drawn up which means that the property is taken off the market, and the purchase price is fixed. This reservation sum is fully refundable if the developers do not have their paperwork in order. Also, if the developers fail to acquire a building licence for the development, the funds paid will be returned.

Normally within 30 days, private purchase contracts are exchanged. At this stage your legal representatives will be required to hand over your first instalment of funds, usually anything from 20% to 50% of the purchase price.

During construction, some developers' payment terms require further payments to be made. Again, your lawyer will advise when these instalments are due.

On the day of completion, the balance of the purchase price is paid, and you (or your authorised representatives via Power of Attorney) will sign the title deeds for the property, and the keys will be handed over.

If I am purchasing a property from a developer, what happens if the developer disappears or goes bankrupt before completion?

When signing private purchase contracts, the developer must now produce evidence that he has in place a bank guarantee or an insurance policy.

Following this, if the developer runs into difficulties, such as bankruptcy, the purchaser's lawyer will arrange for the return of all monies paid to date, plus interest at 6%.

Cost Involved in Purchasing Property

As a general rule, 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 (if off-plan)

Stamp Duty 1%
Payable on completion

Notary & Land Registry Fees, approx 2%
Payable on completion

Legal Fees 1% + Vat
Half payable at start, half payable on completion (if off-plan)