While we are all getting used to a new way of living, here in Spain some things are the same, but different.
Our day to day practices may be undergoing many changes, but the basics in our lives remain the same. One such thing is the purchase of the property.
At LCPSpain.com, we have noticed the changes, but they have not all gone the way we expected.
the lockdown came into being, we were unsure of many things. In the normal course of events in the old world, buyers would view a selection of properties and on choosing the right one for them, make an offer, and on acceptance, move forward with the purchase.
We wondered how this would be possible under the new conditions.
What we have discovered is that buyers are still buying.
A number of sellers have removed their property from the market, but those who are still wishing to sell are more open to video viewing.
Let me explain.
We can now arrange a specific time and do a virtual viewing for our clients who wish to buy a property.
In most cases, buyers have been to Spain before and have already decided on the area they wish to buy in,
Now our viewings take a little longer. We will connect by Google Duo or a video call on Whatsapp.
We visit not only the property but the surrounding areas and buyers can see everything from the comfort of their own home, wherever they are in the world.
It’s a good idea to have some questions written down before we do the video viewing, but we also record a video and the buyer can look again to get more familiar with the property.
To date, buyers have been asking to see the number of electrical sockets in various rooms, ask us to measure the width of bedrooms etc.
We can show you the view in reality and you are assured that the photos are not photoshopped to delete unsightly views or proximity to a busy road.
Of course, it is also possible to have the property viewing attended by a trusted friend or relation who is actually here in Spain.
At the moment we are dealing with many Spanish buyers who have the advantage of being here in Spain.
We are also finding that overseas buyers are keen to buy properties that have a good holiday rental potential. Realistically, these properties are still renting, but currently to Spanish Nationals who will not require a flight to get to them. Of course, the current situation will pass and while flying may have a few more security checks than before, people still want to come to the Costa Del Sol.
Once you are happy with the property and get to the stage of making an offer,LCPSpain.com can set the wheels in motion.
In order to complete the purchase, but unable to attend in person, a Power of Attorney is the route to follow. After a phone call or two to discuss the personalization of your purchase, we will get in touch with a NOTARY in your home area. We will create the document in Spanish and also translate it into your own language and send it to your local notary.
Visiting this notary in your home place is permitted under rules of Lockdown. Once with the notary, you will show your original passport and the signed POA, plus notarized and certified copies of your passport will be sent to us here in Spain. This POA will give the Lawyer here in LCPSpain the power to buy the property on your behalf. It will ONLY refer to this particular property, so no risk of buying a property you do not want! The POA must also have the Seal Of The Hague Apostille. Your local notary will arrange this. You will also pay your local notary directly.
The POA will also allow us to open accounts with Electrical suppliers, Water suppliers, get your NIE number if you don’t already have one and also to carry out all that is required to get the property registered in your name with the land registry in Spain. We can even open a bank account, if you don't already have on, and set up direct debit payments to make your life easier for regular utility bills etc.
It is very important that you also know that, unless you particularly specify ( which we don’t recommend) the lawyer
CAN NOT sell any property on your behalf.
CAN NOT withdraw money from your bank account.
The process of getting the POA from the UK or Ireland will usually take a maximum of 14 days.
This is important to know at the time of making an offer to purchase.
Under normal circumstances, to remove your chosen property from the market, and prevent another person viewing or buying it, a deposit of €6,000 must be paid.
At that point a contract will be drawn up between the seller and buyer and date will be agreed to move to the 10% This is made up as follows.
On an agreed purchase price of €200,000
To remove the property from the Market, €6,000.
Agree on a date to pay the 10% €14,000
So, the buyer will now have paid €20,000. Which is 10% of the purchase price.
The time scale between these two dates is usually a maximum of 21 days.
On the date of signing the 10% date of completion will be agreed.
Things to note.
€6,000 This is refundable but will be liable for any costs incurred by the seller if the buyer pulls put.
In basic terms, if the seller or buyer arranges their lawyer to draw up contracts, do land searches etc and the buyer pulls out, all incurred costs must be paid.
The time between the €6000 payment and the 10% must be used to do surveys, searches on title deeds etc. Once the 10% has been paid, it is non-refundable should the buyer pull out.
Should the seller pull out of the deal, they must pay the buyer 20% of the agreed purchase price.
In Spain, once the 10% has been paid, it is virtually deal done.
It is not uncommon for the date between the payment of the 10% and the final transfer of ownership to be as short a time as two weeks. This contract will usually be signed in the office of the buyer's lawyer, but can also be signed in the office of the seller's lawyer.
Any conditions to pull out of the sale must be in this document. Our lawyers will, of course, advise you on this. The document will also contain the last date allowed to complete.
Completion date. This date is the date agreed to pay the final balance of the purchase. It will be agreed and written into the contract exchanged on the day of the 10% payment.
This is the date when you will receive the keys to the property.
The signing will take place in the Spanish Notary’s office with both buyer and sellers there, or their lawyers with a POA.
The document signed is called an ESCRITURA, or the deeds of the purchase.
It will include the details of the property, the price, and any debts against the property.
These debts will be paid by the method of a deduction of the monies going to the seller.
Your lawyer will have checked that there are no outstanding taxes owed on the property ( called IBI or BASURA)
They will also check outstanding community fees of applicable.
Communication will also be made with utility companies to advise of a change of ownership from that date.
It is not unusual for the lawyer of the buyer to hold an amount in RETENTION in the event of any unclarified bills.
In the event that the Seller is not a Spanish resident, there is also automatic retention of 3% of the sale price. This will safeguard the buyer against any property gains taxes against the seller being passed to the buyer.
The seller's lawyer will handle this 3% is refunded to the seller once any and all taxes are paid.
The notary will have received all this information before you ( or your POA ) arrive to sign. The document will be read in full and translated by a recognised translator, should you require one.
This is the day when the cheques are exchanged,
The buyer will have transferred the payment to their lawyer a few days before and the lawyer will have a number of cheques made out to the various parties that need to be paid by the seller.
Outstanding taxes, legal fees, administration fees, any outstanding mortgage on the property, Notary and agency fees. The final balance will be paid to the seller.
Once both parties are happy, the ESCRITURA is signed and cheques exchanged.
That is usually the point when you can crack open a bottle of Cava!! You are the proud owner of a property in Spain.
If you have any questions on moving forward with the purchase of a property in Spain, don’t think that the current situation has killed the market.
Of course, there are some great deals to be had. They are the ones that are being signed in the notaries in Spain every day.
To arrange a video viewing or get your POA in place please get in touch.
You can contact us on +34 648088100 or send a WhatsApp and we will get back to you.
In the meantime take a look at our website or follow us on Facebook or Instagram.
We may not be at our office in San Pedro just now, but we are still selling properties and still arranging POA’s, Wills and processing Tax returns for our resident and overseas clients.
Take care, Stay safe and we will see you by video soon.