9 Ways To Avoid Pain When Buying A Property In Spain
We've all read horror stories about families who have purchased a Spanish property, only to see the process become a nightmare. So, we've put together a 9 point guide to help prevent you from becoming the next Spanish property horror story.
1 - Research Local Property Prices
Before you take the plunge and invest in a property, ensure that you have viewed a broad range of properties in the local area. You should familiarise yourself with the local region, the different price brackets of properties in that area, and also know what type of property that you want to buy. If you go on an "inspection visit" or "viewing trip", make sure that you have completed your research on all of this, and that you are familiar with the area and properties on offer before deciding to go ahead. Make a list of key features that you are looking for in your property that are non-negotiable before you make your trip to Spain and stick to them.
2 - Research The Local Area
It goes without saying that you will be less familiar with a town in Spain than you would be in the area where you live and work in the UK. So, you should make sure that you research any areas that are of interest to you prior to buying a property. In your home neighbourhood you may instinctively know which areas to avoid, which are noisy, where the local party venues are, and so on. However, many people buy a property in Spain after seeing it only once, only to realise later that the road in front is where hundreds of teenagers hang out to drink at 3am on Friday nights!
3 - Research Local Schools and Employers
This is an important point, especially if you are going to need to find employment or schools in close vicinity to your property. This is even more advisable if you are looking to purchase a property in a remote or inland area, as it can be more difficult to find work, or for your children to integrate in local schools than in more cosmopolitan areas.
4 - Research The Community
If you are buying a property which is part of a community, make sure that you do your research on how it is run. Make sure that you know what your community maintenance fees are before you complete the purchase; your solicitor should contact the administrator of the community where you are intending to buy. It is never pleasant to be landed with massive monthly community fees, that you had not accounted for in your figures! You also want to know if there are any significant problems with a community. For example, have any of the other owners incurred large debts from unpaid fees or are there any problems with the maintenance company, etc. Take some basic steps, such as speaking with neighbours to see what its really like to live there. Don't be shy when it comes to knocking on those doors as it may save you a big headache in the long term.
5 - Select An Independent Local Solicitor
When selecting a solicitor, make sure that you are happy with their credentials, that they are independent with knowledge of the area where you are investing. Unless you are fluent in Spanish, it is essential that your lawyer speaks excellent English, so that there is nothing lost in translation. Your lawyer should make checks on your behalf regarding the property with local authorities. It is essential that your solicitor checks that there are no debts associated with the property, as they pass with the property's title in Spain. They should also co-ordinate the purchase with the public notary, as well as being the go between between the seller and the mortgage lenders, where applicable.
6 - Take Precautions When Purchasing From a Builder
If you decide to purchase a property directly from a builder, you should be cautious before instructing a solicitor nominated by them. We would always recommend you to select your own, independent solicitor, to avoid any conflict of interest in instructing a solicitor recommended by a developer. You should always be confident that your solicitor is looking out for your best interests, and making basic checks on their credentials online. For example, find out what previous clients have said about their services. Can the law firm provide you with references? Can they give you an example of credible litigation work that they have preformed in the past, that shows that they will fight for your interests? The answer to all of these questions should be a resounding "Yes!"
7 - Avoid The Ex-Timeshare Sharks
Unfortunately, there are still some agents in Spain who employ high pressure sales tactics, many of whom come from notorious sales backgrounds, such as timeshare. The golden rule is that if you find yourself in an uncomfortable situation with an agent, politely tell them to back off.
There have been infamous press expose's regarding some of the largest agencies in the Spanish Costa's. Some of them based their businesses on unethical techniques, such as pushing their clients towards going ahead with a property that they did not really want to buy, or giving misleading advice concerning "off-plan" developments. Take some time to research your agent. Are there negative comments about them on sites such as Eye on Spain, and have there been complaints against them in the UK press? Having said that, one of the good things to come out of the credit crunch is that many such agents have disappeared when the going got tough, as the pickings are not as easy as they used to be.
8 - Account For Added Purchase Costs
There are many more "extras" on top of the purchase price of the property in Spain than in the UK. Any professional who deals with your property purchase should remind you of this, as purchase costs for the property alone are normally at least 10%-11%. If you take out a mortgage when you purchase, there are also arrangement fees & notary fees to consider as well, which can be between 1%-2% of the purchase price, depending upon what the bank charges. However, the professional fees that a solicitor or a bank charges you, which can vary, are in some cases negotiable.
9 - Money Transfer Costs
When you have finally ticked off all of the points in this article, found your dream property and are ready to go ahead and send funds over from the UK, there is one last thing to consider that many people forget; money transfer costs. If you send money directly to a Spanish bank, you may have a nasty surprise when they charge you fees to receive the money. Then you may also find that the UK bank gives you an exchange rate which is well below the current actual rate. Some may even charge you commission for transferring the funds. Suddenly, a simple case of sending money to Spain has become very expensive. One solution to this is to look for an established currency trading firm, who can often offer you a much more competitive exchange rate than the banks, without costing you in commissions and, in many cases, save you the Spanish bank fees charged for receiving funds.
If you take on-board the advice outlined in these 9 points, it should help you to avoid common mistakes that can lead to issues with Spanish property investments. If you require further information on the Spanish property purchase process, you might find the following article interesting:
But please note that this is merely a basic guide about investing in a property in Spain and is not meant to replace the need for independent legal advice. When buying a Spanish property it is essential to use qualified professionals to ensure that your purchase runs smoothly.
© http://www.idealspanishproperty.com / 2012