Buyer’s guide

If you are looking at buying a property on the Costa del Sol, please read the summary I have written. I hope that this will help you avoid many of the problems that people face and allow you to have a successful purchase. Please note this is a personal recommendation and should not substitute for professional legal and/or fiscal advice.

YOU’RE NEEDS

First and foremost you need a clear idea of what you need/want from the property. You need to think clearly about your situation and what the property is for. Is it a holiday home? Do you intend to live all year here all year round? What will you need from the property in 5/10 years?

Why do you need to ask yourself these questions? Well for example, if it’s a holiday home that you intend to only use for several weeks a year, you might want to minimise your overheads. Or maybe you want to rent while not using it? Who will be your market?

I would recommend that you make a list of your wants and present them to the agency. I have included a few potential criteria that might be of importance.

What you and your family require from the property?
Do you drive? Will younger members of the family be studying? Is any member of you family less physically mobile? This might not seem like pressing issues in the moment but you do not want to become the family taxi driver.

Why buy the property?
Over the last few years many people have primarily bought as an investment. You need to think clearly about what you want. Is it to have a home to enjoy, a by to let, etc…

Additional costs
Property on the Costa del Sol, like property anywhere does not simply take care of itself. Why costs will this property accrue. Community fees, garden/pool maintenance, etc

Is bigger better?
How big does the property need to be? Don’t by on the assumption of visiting family, focus on what you want.

What sort of property are you looking for?
Are you looking to be in an urbanisation out of town or would you rather be in the centre of town? Are you looking at an apartment, townhouse or villa? Be as specific or as open as possible to the choices. But these options will be reflect in the sales prices.

Where on the Costa del Sol?
Where do you want to be on the Costa del Sol? Do you want the lifestyle of Marbella, the quiet peace of Mijas or the hustle and bustle of Fuengirola? You might have personal reasons for choosing a specific area (family, work, etc…). If you have no preference tell us what you want and we will tell you why an area would work for you accessibility?

Do you need to be near the airport to travel back to your home country? Maybe train access is important as you don’t drive or need to commute to Madrid?

Infrastructure
Being in the centre of town, or right on the beach front will have advantages and disadvantages, as will being out in the countryside. Have a clear idea of what you want around you (schools, shops, hospital, etc…). Not only now but in the future as well.

Knowledge
Now more than ever knowledge is power. You need to know about the area you intend to buy in. That is one of the reasons for this blog; our best clients have been the informed clients who know clearly what they want.

FINANCES

If you are serious about buying a property on the Costa del Sol, then it is worth looking into your finances from the start. Being prepared, especially if you are looking at applying for a mortgage, will only cost you some time and will allow you to have a clearer idea of what you can afford. It will also allow you to shop around to find the best mortgage wherever here in Spain or in your country of origin. It will also make you a more attractive vendor as the owner will have the certainty of completion.
Leaving a mortgage to the last minute means you might land up with higher costs or dependent on exchange rate (in the case of a mortgage from the UK for example).

LEGAL COUNSEL

From the outset you should have a lawyer. If you don’t have one the agent will be able to recommend one to you. Preferably you will want them to recommend several so that you can make a more informed choice. It is this agency’s recommendation that you never you an in-house lawyer supplied by an agency. These lawyers will be beholden to the estate agent and will be more likely to side with them in the case of a dispute. Remember they are reliant on that agency for business.

In many cases a buyer will use a gestor (administrative agent) for dealing with the legal aspects of the purchase. They are generally cheaper, but are not fully trained lawyers.

It should also be relatively easy to find a lawyer that speaks your native tongue.

LOOKING FOR YOU COSTA DEL SOL PROPERTY

First and foremost, if you are currently outside of Spain it is worth travelling to Spain by yourselves and not through an ‘inspection trip’ or any other sort of subsidised travel. The agent will concentrate on showing properties that suit themselves and not you. Organise your own visit, inform us when it is convenient for you to see the properties and let the agency do its job. If we don’t offer you the service you can walk away, an option not open to you during these subsidised tours.

DECISION TIME

Of course you want the ideal property, but remember it might not exist. Look at the pros and cons of each choice and make a firm decision. Your seriousness and decisiveness will send the right sort of message to the vendor. If you follow what has been mentioned above the vendor will see you commitment and will be more likely to accept your offer.

DUE DILIGENCE

Once you have chosen the property that is right for you, certain legal checks need to be made.

First you want to see a Nota Simple (registry report). This will confirm that the person selling is in fact the owner and will reveal if there are any debts or charges (mortgage) on the property

Then there are the title deeds. This will confirm what is legal on the property. Is that loft conversion reflected in the deeds (for example)?
If it is an off-plan purchase you will want to see that all relevant permission is in place. If the property is quite recent is there a license of first occupation? If not, then it is more than likely that it is an illegal building, which can lead to a myriad of problems.

You will also want confirmation that all taxes (IBI) have been paid. Unpaid taxes are set against the property not the owner. You do not want to inherit someone else’s back taxes.

The same applies to water and electricity bills.

Again this also applies to community fees. These are costs set by the community to pay for general maintenance, gardens, pool, etc…

LEGAL FORMALITIES

On acceptance of your offer, a Reservation contract will be signed by both the buyer and the vendor. At this point a reservation deposit (between 3.000 and 6.000 euros) is set against the accepted offer. As the name implies this contract reserves the property for a set period of time, and if broken, normally means the forfeit of the deposit. Read the document carefully and add any special conditions that you see fit.

Unless the contract is to go to completion quick (less than a month) normally a private contract is written up. Normally a larger percentage of the total price is put down (example 10%). This offer protection to the vendor and the monies will be lost by the buyer if he or she pulls out. It also offers protection to the buyer as if the vendor pulls out; all monies must be refunded, plus a penalty charge.

COMPLETION

Completion takes place when both the buyer and vendor (or the lawyers) sign the public deeds in front of a notario (public notary). At this moment the vendor is paid in full and the keys are handed over. The property has now been handed over, but still needs to be registered. This will be handled by your lawyer. Prior to completion you or your lawyer will have applied for a NIE number.
Costs of the transaction

Additionally to the price of the property, there will be taxes that need to be paid. This will work out to 10% of the price of the purchase. Although it can be slightly lower or higher. This includes 7% VAT/transfer tax, stamp duty, notary fees, registry fees, lawyer fees and mortgage costs.
I hope this information has been helpful. If you have any further questions please contact us at info@arribaestates.com of visit our Arriba Estates page for further contact details.

Regards
Andrew Belles
Arriba Estates