In this article you will find a detailed list of all the steps any expat should take to buy a property in Spain.
1. Hire a specialist to help you
Get a lawyer who can accompany you and advise you during the purchase process, as they will help you with all the procedures. Although it is not necessary to hire a lawyer, it is highly recommended.
2. Get the NIE
It is one of the most important steps. The NIE is the identification number that is granted to you as a foreigner, and is essential to carry out any type of economic activity or financial transaction (such as the purchase of a home), as well as to register as the owner of the home once purchased.
Requesting this number is quite simple. It can be done from abroad, at the Spanish embassy while still in your country of origin; or directly in Spain.
There are different types of NIE, and depending on your plans you must request one of the following:
- Non-resident NIE: if you are going to buy a home but you are not going to live in Spain (that is, you will only travel to the country for that reason) and you are a non-EU citizen.
- Resident NIE: if you are going to be in the country more than 183 days a year, regardless of whether you are a community citizen or not.
- Temporary NIE: if you are from the European Union but you are only going to be in the country for the duration of the sale.
3. Open a bank account
Although it is not totally necessary, having your bank account in Spain will speed up the process and facilitate the transaction in its different steps. In addition, having money abroad usually involves delays and extra complications.
It is important to open a bank account in Spain because all taxes and expenses associated with the sale operation must be paid through it. To carry out this step, you do not need to travel if you live in one of the 15 supported European countries, such as Austria, Germany, Belgium, Denmark, Italy, Norway, Luxembourg, Netherlands, Finland, France, Ireland, Portugal, Sweden, Switzerland and the United Kingdom.
4. Negotiate with the seller
This is when having a real estate agent is totally beneficial, as they will speed up the process and even negotiate for you.
It is recommended that, before you launch into the negotiation, you understand what the real market price of the property you intend to buy is.
Starting the negotiation with an amount that you consider appropriate in your personal judgment can only cause you to end up paying more than you should.
Therefore, the ideal is that you first check and compare the price of the property using different valuation sites. Check several platforms and then calculate an average of the different prices achieved.
5. Find a mortgage
Once you have a more precise idea of the total price, it is time to start looking for a mortgage in case you are going to need one.
In this step, we suggest that you start comparing and choosing the lender that you will finally hire. On the other hand, find out about the different interest rates and which of the offered ones is the one you are finally going to accept, since the conditions can vary drastically.
Keep in mind that if you are not a resident you will have to pay a 15% more deposit than residents.
6. Reservation contract
Once the price has been agreed with the seller, the next step is to sign what is called a reservation contract. This document basically specifies that the price has actually been agreed, and is used to confirm that the property will be removed from any online platform on which it is advertised and that the seller will no longer offer it to new buyers.
The reservation contract is usually used only in those transactions in which there is an intermediary, since a direct negotiation between buyer and seller would not require it.
After the reservation contract, we move on to a really important contract, the Deposit Agreement. This is the private purchase and sale contract in which a real commitment to purchase the home at the agreed price is demonstrated.
For this contract to be valid, you will have to pay a certain amount of money to confirm the selling party’s intention to buy (which will of course be deducted from the final price); and it receives that money confirming that it is going to sell the property to you. There are two main variables that you must pay with when it comes to the deposit agreement:
- The amount of money to be paid as a confirmation, which is usually around 6,000 euros (although you can negotiate and reduce or increase that amount).
- The duration of the down payment contract. Our recommendation is to always agree on 90 days, so that you have enough time to make the right decision when it comes to contracting a mortgage (as banks will not take you seriously until they see this contract).
In case of non-compliance, there are some negative consequences:
- If after paying the deposit contract you do not want to continue with the process, you will lose that money.
- If the seller does not want to continue with the process, they must return that same amount multiplied by 2.
7. Official rating
The next step is to obtain an official valuation for your mortgage. This point is very important because the total amount that the bank will lend you is based on the results of this appraisal, that is, the official value.
Ideally, the price found through this valuation is the same as what you have agreed to pay the seller, or even higher. If the appraisal ends up resulting in a lower price, the bank will simply lend 50-60% of the appraised money, and you will pay the difference.
8. Prepare the necessary documentation
Before going to the notary, you will have to prepare all the necessary documents and make sure that the property does not have any defects. In this phase it is very useful to have a lawyer (to verify that the home does not have hidden defects or similar problems) and an architect who can properly evaluate the situation of the home in detail.
The documents you will need are the following:
- Simple Note. This document provides all the details about the property, such as who the previous owners were, its classification (if it is a residential or commercial property), whether it has debts or mortgages…
- The ITE (Technical Building Inspection), which confirms that the home is in good structural condition.
9. Sign the deed before a notary
The notary will help you fully understand all the conditions of the contract so that you know exactly what you are signing and agreeing to with the seller.
This is the last step to make the property completely yours. Of course, all parties involved in the transaction will have to attend and, once signed, you will receive the keys to the home.
10. Register property
Finally, you will have to register your new home in the Property Registry. With this process, you will be identifying yourself as the new owner, which requires payment of the property transfer tax and the documented legal acts tax to the regional government.
In addition, the ownership of different public services, such as gas, water and electricity, will be changed.
