Real Estate Property Buyer's Guide
A step-by-step guide
The problem of the foreign buyer to find good property, and then negotiate the operation and conclude the sale is much more difficult for them here than in their own country: as in most tourist areas, everyone seems to be in business, from the taxi driver to the hotel concierge. Real estate is the favorite topic of conversation. And almost everyone has an opinion, which can easily confuse the potential buyer. Where do you want to start?
Finding the “good” property
There are people who spend years looking for a property. Others are lucky enough to find one right away and are confident enough to close the transaction on their first visit to Marbella. For others, it’s only a matter of time before they’re comfortable with their eventual decision.
Finding the “good” agent
A good agent will really know how to listen to you and interpret your wishes. He will share with you his knowledge of the market and his experience and, once his own portfolio has been exhausted, he will work with other partner agencies until he finds the right properties to offer. The fundamental qualities that a good agent must possess are: professional experience, knowledge of the product, sincerity, good communication, the friendly desire to help you in all possible ways in your search for a property and above all, not be too insistent! If you are not comfortable with your agent, feel free to change it. But when you find someone you’re easy to work with who understands what you’re looking for, stay with them until they find the right property or until they’ve offered you all the properties available through this agency and its collaborating agencies. If you stay with your agent, you will be more motivated to break all the locks and find the property that suits you. You’ll also avoid having to repeat the same story every time you contact a new sales agent.
A commitment always pays dividends
It will be almost impossible to find exactly what you want, even if you start construction. And even if it were, you’re not so sure your partner is 100% okay. Find a property that makes you both happy (which usually means a compromise).
Make sure that the protection granted by the legislation also concerns you
If you purchase a property under construction, the developer is legally obliged to present an insurance policy or a bank guarantee that covers your payments in case you do not finish the work. Promoters must also submit proof of title, as well as planning permits and licenses; since 2002 they must also file an insurance policy against building defects. An expert real estate lawyer can predict all of these questions.
Buy for your own priority use
Unless you’re absolutely sure you’re going to get a visit from your children or grandchildren, it’s usually a mistake to buy a property thinking they’re going to use it. Over time, many people end up selling their big homes when their families don’t visit them as often as they expected. Buy first for yourself, based on your tastes and according to your goals.
The best way to determine the value of a property is to study the sales prices of comparable real estate recently sold. To do so, your agent must have a great knowledge of the market. If you have visited a large number of properties yourself, this will help you acquire this good basic knowledge of the market.
Consider the day you want to sell
The property we buy today becomes an important part of our heritage and one day will be resold: therefore, it is advisable to take into account not only personal preferences, but also the general investment criteria, such as the situation, the quality of distribution, quality of finishes and installations.
Experienced real estate agents are often the most able to deal with the commercial aspect of a sale (that’s their job), unlike lawyers, and will do their best to bring an agreement to contradictory views (yours and the seller’s) to get a deal, as any good negotiator would. You can always consult your attorney during negotiations to make sure the offer conforms to legal imperatives and to actively participate in more complex negotiations.
When making an offer, it is important to come to determine what is the last price of the seller, but at the same time it is advisable to present yourself as a serious buyer.
If you make an offer too low, your strategy may become a boomerang and an insult to the seller, and in this case you probably won’t even receive a response. It’s important to really know what the value of the property is: in the market, and for you. Has the seller rejected other offers and which ones? What is the minimum offer that will trigger your interest?
Make your offer if it is possible in writing (naturally subject to contract), including not only the price, but also the amount of the installments, the date on which you will proceed to your payment, the one you wish to complete the transaction, what you consider included in the price (for example , furniture and installations, if applicable) and, a very often neglected point, the good working condition of the machines, equipment and facilities.
Show the seller the color of your money. Surely you will take your offer much more seriously if it is accompanied by a deposit to secure the property. Numerous agents currently offer the possibility of credit cards and thus a small deposit of 6,000 to 20,000 euros can be paid to close a trade with the seller, the deposit that remains in the client account of the agent during the ten days for which lawyers may need to prepare the private contract, until the arrival of the 10% transfer.
Capital gains are a local tax calculated on the increase in the cadastral value of the land on which the property is located, between the date of the last purchase and the sale that is made. The payment of this tax is the responsibility of the seller, who will therefore be obliged to pay it, unless the negotiation has decided otherwise. If you are negotiating the purchase of a land and there is no topographic plan, it maybe advisable to negotiate a price per square meter in euros, subject to a topographic study to avoid unpleasant surprises.
Costs of acquiring a property
|REGISTRATION FEES (I.T.P.)||8%, 9% or 10%|| To be paid by the buyer of a property (villas, apartments, land, commercial premises, garages) provided that the seller is not a real estate developer or a regular sales trader. If the minimum tax value of the property, as established by the Junta de Andalucía, is higher than the asking price, then the minimum tax value applies: 8% applies to the first level of less than 400,000 euros or 30,000 euros in the case of garages, except those corresponding to the housing, with a maximum of two; 9% applies to the range between 400,000 and 700,000 euros, or between 30,000 and 50,000 euros for garages; The 10% applies to the fee that exceeds the sum of 700,000 euros or 50,000 euros for garages.
|V.A.T. and other Taxes||10% + 1.5%||For any VILLA, APARTMENT or GARAGE attached to an apartment, when the seller is a developer or a regular trader of NEW CONSTRUCTION PROPERTIES|
|V.A.T. and other Taxes||21% + 1.5%||In the case of the first sale or resale of plots of land or only in the case of the first sale of commercial premises, when the seller is a regular promoter or trader of this type of property.|
|V.A.T. and TAXES or REGISTRATION RIGHTS (I.T.P.)||21% + 2% 8%, 9% or 10%||In the case of resale of any villa, apartment or commercial space, when the seller is a regular promoter or trader of this type of property, and the buyer is a company that you will use the property for your activities, you can choose to pay VAT (which can be deducted as a normal business activity) plus 2% stamp duty, or pay the registration fee.|
|NOTARY FEES AND REGISTRATION FEES||Approximately 3.000€||The cost increases depending on the number of pages or the complexity of the notary act of purchase and the value of the property.|
|MUNICIPAL PLUSVALIA||The value of the capital gain can only represent a few hundred euros, unlike the thousands of euros in the case of a property that has not changed hands for many years. It is a tax which, by its nature, corresponds to the seller who is responsible for the payment, unless otherwise negotiated.|
|ATTORNEY’S FEES||1% Approximately||The attorney’s fees are in the range of 1% of the sale price, according to the lawyer and the price of the property.|
The total official costs arising from a transaction to purchase a residential property with construction represent about 10-11% for resale properties, or about 12% if VAT is paid on the purchase price (new constructions), plus attorney’s fees.
When an offer is accepted, it is always necessary for a lawyer to verify the situation in the Land Registry (which has the final say on land ownership and where all existing levies will appear). The lawyer shall also prepare the private contract which shall bind both parties to the transaction and, possibly, notary documents for signature before a notary, once the balance of the price has been paid and the free possession of the property has been transmitted without charge, concluding the sale. There are excellent lawyers in Marbella and many speak fluent English and other languages. The best way to find one is by personal recommendation or by your agent.
It is clear that much of the above observations relate mainly to buyers of resale properties, since most new promotions have fixed prices or have an often very limited trading margin, at least in terms of the price. However, some extras or modifications may be traded to include in the purchase price, which depends entirely on the promoter’s sales policy.
So finding and buying a property in Spain can be as simple or as complicated as you want.
One last piece of advice: follow your intuition! It’s often the best guide.
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