Drawing on over 30 years of experience, the team at Verdin Property knows that purchasing a property can be one of the most stressful experiences you can experience in life. Even more so if you are moving to a foreign country. Maybe you don’t know the language, the laws, the immigration process when it comes to visas. Of course, for some people, purchasing a property is as straightforward as stating: “I am going to buy a house”. However, in order to make the process as easy and simplified as possible, we have prepared a guide for those interested in purchasing a property in Marbella and its beautiful surrounding areas.
Table of Contents
01: BE SURE TO PLAN PROPERLY AND DO YOUR RESEARCH
As with any major financial decision, when purchasing a property, research and preparation are crucial. With the amount of agents in the area, finding the right one is always the best first step. You want an agent that will listen to you, advise you on the best areas to look at, make sure you are fully aware of the processes involved when it comes to purchasing a property.
This is where the power of the Internet comes into play. As it has become an essential tool for individuals to research practically anything from across the globe, it makes life easier for those currently living abroad but interested in acquiring a property or moving to Marbella. This also allows you to get a feel for what properties are on the market in advance of your viewing trip.
Please take note however that there are many websites, both of agencies and portals, that are not updated regularly so be sure to check with the agent you appoint whether certain websites are good for your research. Of course, we highly recommend you look at your chosen agencies website. If they have several hundred or thousands of properties on there, you can pretty much guarantee that they are using a database feed and do not know anything about 90% of the properties they are showcasing, which is not a good thing.
When talking about the property market in Marbella, the market itself functions as an MLS (multi-listing system), meaning that the properties for sale are accessible to most real estate companies to market and sell. This is primarily because all Marbella’s real estate firms share the same database, meaning you do not need to visit several different agencies to find properties, you can simply use one.
When searching for a real estate firm or agent, it is good to research and approach all with an open mind; you don’t have to commit to one particular agent when you start researching; you can begin the process by working alongside several agents. Although this gives you a pool of candidates, it is always best to stick with the firm or agent you feel most comfortable with.
With Verdin Property, you get the peace of mind that we are specialists in the Golden Triangle, the name given to the areas of Marbella, Benahavis and Estepona. We are also Founding Members of the Guild of Spanish Property Professionals, an association of handpicked companies within the real estate industry of Spain that showcase the best values, ethics and practice standards.
02: ORGANIZING A VIEWING TRIP WITH YOUR AGENT
Now that you have been able to plan ahead, you can organize your trip and travel to Marbella. Once you arrive in Marbella and have met with your chosen agent, all that remains to do is to organize your property tours. Below are just a few suggestions we have when it comes to arranging these visits.
We recommend, as always, to plan ahead and have selection of properties you would like to visit.
Let your agent organize multiple viewings that will take place over an entire day. This is a great way to familiarize yourself with the market, wasting as little time as possible. We generally do not organize more than 4-5 viewings per day as by the end we find our clients are starting to forget potentially important details of the earlier properties. If you have only a short amount of time available on your visit we can organize consecutive days of 4-5 viewings so you can see a good selection of properties.
One of the most important pieces of advice we can give is ‘study the area’, as it is not only vital that you like a property but you also like where the property is located. For example, you may want to live in a gated community, be close to the beach, be within a reasonable distance of a school, avoid street noise, etc. Take a drive around the area, and get a feel for where the property is located.
If you like a particular property whilst on a daytime viewing, we recommend going back again during the evening hours, during dusk or maybe just after dark if possible, as any house feels different at night and it could change your perspective of the property.
Don’t be scared to voice your opinion on the property you’re viewing. If you like it, say so. If you don’t, say so. This will help you make up your mind and allow your agent to adapt and suggest different properties that best fit your requirements. Furthermore, let your agent know what you think and believe in their adaptability to the situation. If you keep your agent informed on how you feel, they will better understand what you are looking for and can accommodate that. Remember, we have been doing this job for a long time and deal with hundreds of buyers every year, so we know what to do in this situation.
Be prepared for viewings to change and be modified because no matter how much you plan, you may change your mind on what you are looking for. A property you see online may not be as you imagined when viewing it in person. This is why it is critical to choose your agent wisely, as an excellent real estate agent will adapt to your situation and rapidly fix dates and times to find the best solution for you. Of course, appointments can also change based on the sellers situation at any given time.
03: MAKE SURE YOU HAVE THE CORRECT PAPERWORK
As always, make sure you have all your paperwork in order. That way you can have everything planned, making this less time-consuming and financially straining.
Spain is huge on paperwork, so we recommend you ensure that all the appropriate documentation is in place before viewing a property if you want to save time in the future.
Although there are no particular restrictions for foreign non-residents when buying a property in Spain, you will need to meet specific requirements before beginning the purchasing process:
Apply for an NIE Number
An NIE Number (Número de Identidad Extranjero) is a sequential identification number allocated to foreigners, needed for identification purposes and practically doing anything in Spain such as opening a bank account, obtaining a Spanish phone number etc.
If you are planning from abroad, you can apply for an NIE via a Spanish Consulate. If you are already in Spain, you can do this in person at the Police Station or via a legal entity such as a gestor.
In Andalucia, you need the following documentation to apply for a NIE:
a) If you have a European Passport: show your main identification page and have a photocopy of it.
b) All Other Passports: show your full passport and have a photocopy of all the pages at hand, two ID photos and two copies of the Ex-15 application form filled out and signed.
c) A valid reason why you need an N.I.E (e.g. for work, buying a car, buying property, etc.).
Opening a Spanish bank account
Once you have obtained your N.I.E, you can apply to open a Spanish bank account. We recommend looking into banks that accommodate to foreigners, especially if you are not fluent in Spanish. Sabadell, Caixa Bank and Santander are just a few of the options. It must be noted that banks in Spain require you to be physically present at a bank branch to open a bank account, you can not do this online.
However, other requirements need to be met to open an account:
a) Proof of identity (e.g. passport or ID card) is usually asked to be presented in person.
c) Proof of Funds / Tax Declarations
d) Any other documents the bank deems necessary
As well as the standard documentation, you may be also asked for proof of address, which can be found on a rental contract, recently paid community bills, etc.). Some banks will ask you to provide a certificate of non-residency (Certificado de No Residente). To obtain one, you must apply at a Spanish police station, which typically takes 10 days to process.
The documents may need to be officially translated into Spanish, and if they are from abroad, they may need to be authenticated using an Apostille stamp. Most banks don’t charge for opening an account, but you will pay an annual fee for administration, either monthly or quarterly.
When looking for your bank, you should pay particular attention to the fees that banks charge for receiving transfers from abroad, making transfers to foreign countries and issuing banker’s drafts (the standard form of payment used in Spain when purchasing a property).
An important point worth mentioning is that, in our experience, there have been occasions where people have lost out on a great purchase opportunity due to not having the correct paperwork in place in advance. So we highly suggest people check their legal, financial and fiscal status before viewing properties in Marbella.
Find a good Lawyer and Tax Advisor
We highly recommend finding a qualified, trustworthy solicitor and tax advisor if you purchase a property in Spain. Before you even start purchasing a property, you must establish a good relationship with these representatives, as it works in your favor in the negotiation stage. For your benefit, if you do not speak Spanish, make sure you hire a lawyer who speaks your language. Fortunately Marbella is a cosmopolitan area with many different nationalities so finding a legal entity that speaks your language should not be difficult.
04: PROPERTY VIEWINGS & NEGOTIATIONS
Once you have found the ideal property, you move on to the negotiation phase of the purchase process. Below is our typical process:
Making an Offer on a property in Marbella
When you make a purchase offer, we advise you to put your offer down in writing through your agent. This offer must include the offered price, proposed payment terms and deadlines.
When you are coming up with an offer, make sure you understand what will be included in the sale of the property, like furniture, fixtures and fittings. We generally advise that furniture counts as anything with four legs (tables, chairs etc.) and that kitchen appliances that are fixed or classed as white goods, such as fridges, ovens, dishwashers etc. are included. Also, make sure you provide a reasonable and serious offer as this can significantly impact your chances of purchasing the property. The more serious your offer looks on paper, the higher your chances of succeeding with the best deal possible.
When making an offer, always negotiate through your agent, the process is much more controlled and gradual. There have been cases in the past when buyers have wanted to negotiate directly with a seller, which very rarely ends satisfactorily. In our experience, we have acknowledged that negotiating through an agent proves more beneficial to the buyer when agreeing on a final purchase price, primarily due to our experience with the negotiation process.
A note worth mentioning is if you are thinking of adding any special conditions or requirements that you would like the seller to consider before purchasing a property, these contingencies must be clearly stated in the original offer.
It is worth mentioning that before, during or even subject to making the offer, you have the right to request technical inspections to be performed on the property. This provides insight into the risks involved in owning property whilst still in the purchasing process. This means you can expect reports on minute details such as cosmetic problems (cracks, humidity issues etc.) or special attention to plumbing and electricity. Ensure all these details are written down, as this can affect your initial offer but also shows a seller that you are a serious buyer, which always goes down well.
05: CONTRACTS & PURCHASE COMPLETION
Once you have an accepted offer, you move on to the legal phase of the purchase process. When buying property, you will be asked to sign a reservation contract, a purchase contract and an official deed at the Notary Public on the day of completion. This is the most common purchase process and below you can read about the contracts you will have to sign.
A reservation contract is a document signed by the buyer and vendor that allows the property to be reserved for an agreed-upon time, typically from 7 to 14 days. A reservation fee is also applied in this instance by the seller for the buyer to pay. The payment size can vary from €6,000 to €20,000 or 1% of the purchase price or any other amount mutually agreed on by both parties. This fee is paid for the property to be taken off the market during an agreed time frame. If the buyer decides to go ahead and purchase the property, then the amount paid in the reservation fee goes towards the purchase price.
However, if the buyer chooses not to go ahead with the purchase, they lose the reservation fee as compensation as the property is off the market, unless special conditions are included in the reservation contract that allows the buyer to back out without losing money.
Private Purchase Contract
After the reservation contract is signed, you sign a private contract and then make a payment that amounts to 10% of the purchase price, which includes the reservation fee paid previously (if you pay 1% at reservation, you then pay the other 9%). A point worth mentioning is that, on occasion, it is possible to jump straight to a private 10% contract without signing a reservation contract. However, this is usually done if the purchase price is high and the seller cannot take the property off the market for a small reservation offer. In any case, we do not advise taking this approach unless necessary and agreed by both parties.
There are three different types of contracts you may sign that are all similar when making the 10% payment:
a) Penitential Deposit Contract
This contract penalizes the vendor if the property is not sold under the agreed terms previously set by the vendor. If the seller decides not to sell you the property, they have to pay you double what you originally paid.
Technically, this means the vendor can break the contract anytime; even though the penalty fee is high, the risk is low. If the buyer does not follow through with the property purchase, he loses the 10% paid, and the contract is no longer valid.
b) Private Purchase Contract
This contract does not allow the vendor to back out of the deal. There is no penalty established, as the vendor has no right to back out in the first place. The buyer chooses to execute the option during the contract and make the purchase. If the buyer doesn’t buy the property, they lose the 10% paid, and the contract is no longer valid.
c) Purchase Option Contract
This contract is typically less used as it obliges both parties to buy and sell, which means that the loss of the 10% paid or the reimbursement of double the amount by the vendor might not be enough to cancel the contract. If one of the parties doesn’t want to sell or buy, the other party can still oblige them to do so through court. The vendor can be obligated to sell (even if they refuse to go to the notary) or the buyer to purchase (even if they do not want to). Of course, such scenarios are infrequent.
It is important to note that each of the previous descriptions of the 10% private contracts are a general summary of what each contract entails. Each contract is also subject to additional clauses and penalties that affect the contract. The law states it is not the title of the contract that defines its intention but how a contract is written.
Obtaining a Mortgage
If this purchase is dependent on you obtaining a mortgage, we highly recommend that you start the application process as early as possible to avoid wasting time, however also because the process can typically take up to two months.
Also, if you do request a mortgage, the bank you choose will require additional documentation, mainly proof of regular/recurring income, to ensure you are able to meet the repayments.
The typical conditions for obtaining a mortgage are:
a) Amount of up to 60% of the purchase price
b) Rate of 1.5% – 2.5% per year
c) Typical term of up to 25 years
d) A bank may also require property and/or life insurance
Please note we are not mortgage advisors and this is just a basic guide. Always seek professional advice
Completion of the purchase at the Notary Public
All parties involved in the transaction must attend, meaning both buyer and seller, legal representatives of both sides plus bank officials if a mortgage is involved.
The notary will check all documents and read through the new Escritura (title deed) to ensure all details are correct. Certain points may be checked with the lawyers in attendance to ensure money laundering procedures and financial protocol is being following, as well as to check the personal information is correct and that the purchasing party fully understands the purchase conditions.
Once the title deed has been signed you will now have an immediate transfer of property possession and with it, the full responsibility of the property, payments of community fees, IBI (council tax), basura etc. The remainder of the property purchase payment is also made at the same time via bank cheque, seeing as this is the safest and fastest way for the banks to process in Spain.
Once the payment has been made and all relevant taxes paid, the new title deed is registered at the Land Registry, a process which usually takes a few months.
06: POST COMPLETION PROCESS
Once you have completed your purchase at the Notary, paid the relevant taxes and submitted the new title deed to the Land Registry, you need to ensure that all utilities such as water bills, electricity bills, community fees if applicable and council taxes are changed to your name with the relevant bank details.
Once all property taxes are paid, you must now register your new home at the property registry. This will guarantee your right to ownership. For this process, which we recommend is completed by your lawyer, you will need to provide the following documentation:
a) NIE and copy of your passport
b) Confirmation of ITP tax payment
c) Copy of IBI tax payment from the vendor
So there we are, our detailed guide to purchasing your new home in Spain. Bear in mind some of these processes may be different if you are purchasing a property in a new development.
If you are moving to Marbella with a family, you might be interested in reading our guide to some of the best schools in Marbella.
Be sure to download our buyers guide!
DISCLAIMER: Verdin Property bears no liability for errors on the part of any person, company or association interested in purchasing or selling a property. The information provided in this guide is, to the best of our knowledge, correct at the time of publishing and subject to change. All changes will be updated in this guide as and when we are made aware of such changes. Verdin Property bear no responsibility for any person not seeking proper legal advice. Your home may be at risk if you do not keep up mortgage repayments.