Spain enjoys the international authority. Many people choose this country after retirement while studying or working. Currently, about 6 million foreigners live in Spain. The most frequent and serious risks that can happen to you in the real estate market: invalidity of the purchase and sale contract of the registered person, a third-party lawsuit and a demand for satisfaction of the property price, the first installment (prepayment). For security reasons, it is necessary to check the history of new apartment for sale in Campoamor, Spain. It is necessary to check the title documents for the apartment (check possible obstacles and know the conditions of purchase of the current owner of the apartment); extracts from the state register of real estate rights and other important legal contracts. Information about citizens registered in the apartment. The presence of decisions of the board, legal capacity of the participants under previous contracts relating to this real estate. History of previous transactions, especially if the apartment has been sold several times in a short period of time. The notarial validity of the sales contract is also one of the risks when buying a home. Because the vast majority of buyers and sellers of buying and selling add fear, anxiety and emotion to the buying process. In emotions, people often forget important points and cannot focus on things that can have decisive consequences (there is no practice) when they come to the notary, which can complicate the process and draw attention to points that are more trivial than important.
Where to start buying an apartment?
When you want to buy an apartment without an intermediary, you first need to decide on the location. You can finally fulfill your dreams and buy an apartment in the area where you have lived all your life, you can leave memories and live in a new place. When looking for pisos en venta Barcelona or apartments for sale in Barcelona or in your desired region, track the real estate pricing policy and compare it with your final budget for buying your dream property in Spain. Keep in mind that property prices in Spain tend to be higher the closer you get to the city center. Areas outside the center are cheaper. Of course, you can find the best deals even in the most remote areas. When considering real estate as an investment destination, it is also important to determine the neighborhood (district) with the best profitability.
Overview of the Spanish real estate market
The number of homeowners in Spain is extremely high. Approximately 80% of the population of Spain owns their own home. Spain is one of the countries most affected by the global financial crisis. Real estate objects lost about 30% of their market value before the onset of the crisis. But since 2016, Spanish real estate has been growing steadily, and prices are only rising. The COVID-19 pandemic has hurt the market in 2020. However, according to official data, average prices increased in the second half of the year. If history teaches us anything, it is that the Spanish government can recover from the crisis. This means that a short-term drop in real estate prices can quickly recover fully after the pandemic. Of course, it is impossible to predict the future. However, in most cases, buying property in Spain is the right idea to invest in a stable country like Spain.
Do you need to buy or rent a property?
Spain is a bureaucratically complex country. The real estate market is historically volatile, so it’s always a good idea to do your research before buying real estate, as it’s quite expensive. Many investors buy rental properties in tourist areas. This has unnecessarily increased rents in areas favored by investors. Municipalities planned to introduce stricter regulations to prevent this. However, due to the pandemic, these plans are currently on hold. Spain has 17 autonomous regions. Each region can set its own rules for foreigners buying real estate there. For example, in the Balearic Islands, only Spanish residents can apply for a buy-to-let license. In this context, the Madrid government has also recently taken key steps. These measures only include a permit to stay for a maximum of five days. In the case that you are only in Spain for a short time, it is better to rent a property. Due to the high quality of life, rent here is relatively cheap.
Do foreigners have the legal right to buy real estate in Spain?
Yes of course! The Spanish government generally welcomes and supports foreign buyers in their endeavors to purchase real estate in Spain. However, you may need legal help with the bureaucracy, especially if you want to buy a vacation home. The process of buying real estate in Spain for foreigners is relatively simple. First, you must obtain an NIE (Número de Identificación de Extranjero), also known as an identification number. This is a Spanish financial number, it is necessary to conduct financial business in Spain. You can apply for this number yourself or ask a real estate professional with a Spanish power of attorney to provide you with this number. Spain has one of the most successful Golden Visa programs in Europe. This is a residence permit under an investment program that allows the holder to live in Spain in exchange for an investment in real estate. To obtain a golden visa, you must purchase a property in Spain worth at least €500,000. Then you can get a residence visa. Living in the country legally for at least 10 years can eventually lead to citizenship.
Pricing policy for real estate in Spain
The price of real estate varies greatly depending on where you buy it. Some of the most expensive places to shop in Spain are San Sebastian, Barcelona, and Madrid. You can find much cheaper properties in places like Valencia.
Where to buy real estate in Spain?
Madrid is one of Europe’s biggest cities with plenty of alternative accommodations, great shopping, nightlife, delicious food, and impressive culture. It indeed is one of the most expensive cities in Spain, but if you are thinking of investing or working in Spanish real estate, this could be a smart choice. Buying real estate in Barcelona is a very attractive idea for foreigners. Barcelona is a city of history and beauty, surrounded by the sea, mountains, and rivers. Barcelona is one of the most expensive places to buy property in Spain, but its popularity makes potential buyers think it’s worth it. Alicante is a great place to start looking for a house for sale in Spain, with an ex-pat community, great weather, great beaches, and lots of affordable property options at a range of price points. Alicante is a popular destination for retirees looking to live a quiet life while enjoying the beautiful scenery. With its excellent climate, stunning coastal and mountain views, and an abundance of luxury properties, Mallorca has long been a popular destination for those looking to invest in Spanish property.
The process of buying land in Spain
As a foreign buyer, you can decide to buy a plot of land and build real estate on it. This is a very popular option in Spain, especially in places like the Costa del Sol and the Canary Islands. Because there are so many inexperienced foreign buyers, there is a lot of real estate fraud involved. Many scammers and fake real estate agents sell illegal properties to buyers who do not do their due diligence. For example, the company failed to obtain a building permit. This eventually prompted the government to demolish the constructed real estate. Another example is bad buildings that lead to very expensive repairs. How to avoid any potential pitfalls when buying property in Spain? As a foreign buyer, there are several key steps you can take to avoid any scams. To make your life easier, you need to make sure that you are getting the right deal: check the cadastre, before buying the property, make sure that the developer’s company has the appropriate building permit, check the debt on the property, check the recommendations of the lawyer you want to work with when buying a property in Spain, get a surveyor to check that the property is legal, not cheaply built with cheap building materials. This information is usually available in the land registry. To access this information, you must submit a request by email, telephone, fax, or in person. You can also ask a trusted lawyer to check this.
Some Spanish and international banks offer mortgage loans to foreign buyers. As a foreign buyer, you often have to borrow money with a lower LTV than a Spanish resident. Depending on the type of mortgage, banks can lend at 60-70%. For those who live in Spain, this figure reaches 80%. The interesting thing about mortgages in Spain is that mortgage lenders usually don’t close the deal until you own the property. Therefore, it is important to specify in the contract of sale that the purchase can be canceled if the mortgage cannot be guaranteed. Many foreign buyers fall for the “domestic debt” scam. When selling real estate in Spain, the debts are transferred to the new owner. The property you buy must be debt free. If you have liabilities, make sure they are covered by the terms of your Spanish property purchase agreement.
How do you find the property you want in Spain that meets all your key search criteria?
The Spanish real estate market is ready for foreigners to buy real estate. This means that there are many websites and real estate agencies that operate in almost every language available. You may even see Spanish properties on some UK property websites. Although they are usually focused on villas. The key to a successful real estate purchase is taking your time. You can buy a property in a remote location and move in immediately after buying and completing all the legal documents. However, it’s worth taking the time to check the features and see if everything is as you intended. Many real estate agents in Spain are used to dealing with foreign buyers. They often provide valuable information about the area and help in finding the property you want. But beware of scammers. Never trust agents who ask for an upfront payment or assume they can get your property faster than others. As a buyer, you can contact your mortgage lender, notary, etc. Please note that you have a choice. You are not obliged to follow the recommendations of the real estate agency. They may also try to overcharge you, so you should always negotiate a final price for their services.
Key stages of buying real estate in Spain
The process of buying real estate in Spain is relatively simple and intuitive.
Stage 1. Find a property and make an offer
Once you’ve looked at the homes and found the ones you want, you should place your bid. We usually make this offer through the seller’s estate agency. Prices are usually negotiable. If the price is not very attractive, try to offer a slightly lower price than the seller wants. After verbally discussing the price and agreement, it is best to agree in writing. For this reason, it is always advisable to hire a notary public.
Stage 2. Sign a temporary legal agreement and pay a deposit
After agreeing on the price with the seller, you sign a preliminary contract called (contrato privado de comppravento). After that, a deposit of 10% of the property value is usually required.
Stage 3. Negotiations on the mortgage
As already mentioned, you can only get a mortgage in Spain if you own a property. Of course, you should discuss your mortgage needs with your provider before you buy a property. However, the transaction cannot be completed until the deposit and term contract is completed.
Stage 4. Sign the legal contract for the purchase of a real estate in Spain
When you decide to get a mortgage, sign the contract of sale (escritura de comppravento). Please note that this must be done in the presence of a notary.
Key things to know when buying real estate
Technically, closing the sale at a notary is not mandatory. However, it is always advisable to hire a reputable lawyer to conduct due diligence. As a buyer, you are obliged to officially register the property. A notary or a lawyer can help you with this. All lawyers providing their professional services in Spain must be registered with the local bar association (Colegio de Abogados). You can confirm their registration by requesting a registration number. These records don’t necessarily reflect honesty but remember it’s a starting point.
The painstaking process of searching for the necessary real estate in Spain
When buying real estate, a thorough inspection of the house is mandatory. Technically, you can buy a property in Spain without inspecting it. However, it is strongly not recommended to do this. A careful study ensures that there are no serious defects that will later cost you extra money, which will need to be spent on their elimination (carrying out the necessary repairs). There are two types of actual building appraisals: an appraisal report and a building appraisal. An appraisal report is a preliminary study that can provide an independent estimate of the real market value of the property. Check the structural integrity of the property and look for serious problems. With investment properties, it is very important that you thoroughly understand the price. Insurance is a good idea to give you peace of mind if something goes wrong. Mortgage lenders require building insurance before approving a mortgage loan. Building insurance will insure the structure of the building against fire, natural disasters, and other damages. There is also the so-called property insurance. This type of insurance covers valuables in your home. When you intend to rent out your purchased property permanently, you must have such insurance. Setting up your utility bills can be the most frustrating part of buying a property in Spain. There are different offers from different internet, gas, electricity, and water providers that you can compare before choosing a particular provider. Waste disposal is regulated at the municipal level. An annual garbage collection fee is also paid to the municipality. Unfortunately, scams involving inexperienced buyers are common in Spain. Often these are unfinished objects for which the appropriate permits have not been obtained. Here are some tips to avoid being scammed.
Never sign a contract you don’t fully understand. It is always advisable to hire an outside lawyer when entering into a contract.
Make sure your local council has estate planning permission.
Check the reliability of the construction company and register the object in the real estate register.
Hire a translator to translate all the legal documents related to your property purchase in Spain.
