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When buying a property in Spain, you should be aware that there are several pitfalls and you should not rush into anything. Each country has its own rules and regulations for buying property, private or commercial.
Here is a list of the 14 most common mistakes.
1. Buying in the wrong place
Seriously consider the location before buying a property in Spain. Buying your holiday home in Spain on the beachfront is very tempting, but there are similar properties available elsewhere at a lower price. A good idea is to look at comparable properties that have sold in recent months and the selling price of these properties, to avoid making mistakes during negotiations.
Another thing you can do is to look at an analysis of the Spanish property market to time your purchase. Prices fluctuate, and when you are aiming to invest in Spanish property, you need to buy at the right time to get the most value for your money.
Also, consider everything to do with location, such as transport links, noise levels and any environmental issues. It would be best to think about where you would buy the food and other supplies you need on a regular basis; this may be a long way from the property.
2. Physical inspection before buying
Always carry out a physical inspection of the property you wish to buy in Spain. You can ask an independent surveyor or inspector who specialises in this field to visit the property and check everything. They will inform you of any problems that may be present, such as the roof, plumbing and even insects or woodworm.
You can hire a professional to do this for you, but you can also ask your law firm to recommend someone you trust. If you are buying a commercial property in Spain, a check is also important because of any legal issues.
3. Not having a clear plan for buying a property
You must have a clear plan for buying property in Spain. Take the time to research the market and make a list of all the properties you want to view before you leave. Don’t be tempted to buy something on the spur of the moment because it may not be what you want.
Don’t be too impressed by a place and don’t buy something that is not what you had originally planned. You may get carried away with the negotiations and forget other more important factors, such as your personal preferences or your family’s needs. It is better to take your time than to rush and regret making the wrong decision.
4. The language barrier
If you are buying a commercial property in Spain, this may not be an essential factor, but if it is your second home or holiday home, you will want someone who speaks English or your language. This is more acute in remote parts of Spain, where many people do not speak a foreign language. This can create problems when you want to do maintenance work, need help in an emergency, have questions or need to deal with the government.
Before buying a property in Spain, it is wise to make sure you get help to support you through the difficult times. Our team can help you.
5. Do count on additional costs (transfer tax, legal fees, etc…).
Remember that not only will you have to pay for the property itself, but there will be additional costs when buying a property in Spain, and these should be considered as an included cost and not a surprise.
When buying a property in Spain, fees and costs include lawyers’ fees, agents’ fees, transfer tax, title deeds tax, land registry fees and foreign/local Spanish notaries’ fees.
The additional fees and property tax are calculated as a percentage of the purchase. In general, an additional 15-20% of the purchase price covers this.
The cost depends on the location, the level of service, the level of taxation, the final sale price and whether it is a new or existing property.
Make sure you have enough cash to cover all fees and other expenses.
6. Do work with a Spanish property lawyer
When buying a property in Spain, it is recommended to work with a lawyer to help you. This person will advise you on everything and assist you throughout the buying process and later on with your rights as a property owner.
A property lawyer will advise you on the paperwork and help you with all aspects from start to finish, so that you can alleviate your worries.
Most of the scams and pitfalls of buying property in Spain are avoidable if your lawyer takes care of the buying process for you.
7. Buying in a hurry
If you are under pressure to buy a property in Spain quickly because of work or other commitments, beware. You may pay more for the property than it is worth in order to get rid of the problem quickly instead of thinking about the consequences later.
When you buy something in a hurry, there is always room for regret and mistakes when you have not thought through all aspects. Make sure you get the right advice from a real estate agent and a lawyer when you want to buy property in Spain and do not rush into making a decision.
8. Signing a contract you don’t understand
Always make sure you read the contract carefully before signing it. If you have not read it or do not fully understand it, ask for clarification before signing. The language of the agreement can be confusing, which can lead to misunderstandings. Be careful; you may end up signing the wrong thing.
It is recommended that you ask a Spanish real estate lawyer for an explanation. When you sign the contract, make sure you get a copy for yourself so that you can refer to it if there are any disagreements in the future.
9. Not having your immigration papers in order
When you buy a property in Spain, you need to obtain a Spanish tax identification number (NIE). If you do not have this documentation in order, you will not be able to buy the property.
Get help from an immigration lawyer in Spain to obtain your NIE number. If you want to become a resident in Spain, this is also possible. For example, when buying a property, you can obtain residency through a golden visa programme in Spain, but there are some requirements you must meet.
You can also choose to be a non-resident for tax purposes in Spain. Non-residents stay in the country for less than 183 days.
10. Stressing that something will go wrong with the purchase of the property.
It should be remembered that buying a property in Spain or anywhere else is not an exact science, even if all the rules are followed. There are always problems, but there are ways to deal with them, so keep calm and think logically about your options.
When something doesn’t go according to plan, it can be unpleasant, but don’t let emotions get in the way of making the right decision. Be sure to get advice from real estate agents and lawyers who can offer sound guidance on your specific situation.
11. Not getting the right mortgage
A mortgage provider will only finance up to a certain percentage of the value of the property. For example, if your property is valued at 100,000 euros and you try to get a mortgage for 140,000 euros, you will be refused. It would be best to get the correct amount calculated on the value of the property.
In Spain, mortgage lenders will not sign a mortgage agreement until you have purchased a home. It is therefore essential to include wording in the contract that allows you to terminate the agreement if you are unable to obtain the loan. It is best to enlist the help of a mortgage advisor in Spain.
If you are looking for a mortgage in Spain, Spanish banks can offer you an affordable interest rate. On appointment, you can also open a Spanish bank account.
12. Not having the help of a real estate agent
A potential pitfall is not working with a real estate agent in Spain. A real estate agent will help you find a house in the area you have specified, and will help you determine a fair price and negotiate with the seller to get a good deal.
They may even be able to find better deals and lower prices than you, which can save you a lot of money in the long run. Be careful when the seller’s real estate agent does not represent you, as this can lead to a conflict of interest.
Agents will not help you with legal and immigration matters. Although they can introduce you to the right people, it is not their job to do so.
13. Failure to get a proper preliminary contract
When you wish to purchase a property, and the seller accepts your offer, the next stage is for the buyer and seller to sign a preliminary agreement (the contrato privado de compraventa).
Spanish real estate law requires this document to contain a number of clauses, one of which is the right of either party to terminate the agreement within an initial period of one month.
This clause gives rise to reservation contracts. A reservation contract is one in which you have signed for the purchase of a property, but the bank can take it back if the funds are not available within a certain period of time. You can terminate your reservation contract by submitting a letter of termination.
Caution, the seller and the buyer pay a deposit, usually 10% of the purchase price. If one party has to withdraw, the deposit is forfeited. Work on the preliminary contract with your Spanish property lawyer, who will advise you on the best clauses to include.
14. Lack of government permissions
Among the pitfalls of buying property in Spain is getting a house that does not have the proper permits. When you buy a house that does not have the permissions to have been built you can run into problems. Whether it is a new property, second hand, or still under construction. A property requires government permission to exist.
When buying off-plan properties, you will need to make sure that the property is legal. If the property is built illegally, you may be responsible for complying with local regulations. Another reason to have a specialist involved in the purchase of the property.
Renovation of a second-hand property will, in most cases, require a building permit, which must be obtained within the legal timeframe. When buying a house in Spain, the location of the house influences building licences, the local government will often determine whether you have the right to build. For example, there are severe restrictions on the size and position of building in rural areas and in historic city centres. Our property lawyers will be able to help you with planning permission and building licences in Spain.
Conclusions
Foreign buyers should be aware of these common pitfalls. As noted above, many pitfalls of buying a property in Spain can be avoided by taking action. By working with a Spanish Real Estate lawyer, you are more likely to avoid problems and achieve success in your purchase. You do not need to be an expert when buying property in Spain, but it is advisable to work with an expert who can guide you through the process. Our real estate lawyers are experts in Spanish property transactions, and you can be sure that they will help you avoid the pitfalls that many foreigners face when buying property in Spain.
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