Costa Blanca Property Buyers Guide

A Guide for Buyers of Investment & Retirement Properties in Costa Blanca

Costa Blanca Property Buyers Guide

By Colin Scriven
See Colin Scriven's Bio

ARTICLE 3 - Buying your Costa Blanca Property
 

INDEX - Costa Blanca Buyer Guide

Costa Blanca Property | Search for property for sale in Gandia (Costa Blanca) Costa Blanca property | Search for property for sale in Denia (Costa Blanca) Costa Blanca Property | Search for property for sale in Javea (Costa Blanca) Costa Blanca Property | Search for property for sale in Moraira (Costa Blanca) Costa Blanca Property | Search for properties for sale in Calpe (Costa Blanca) Costa Blanca Property | Search for property for sale in Jalon Valley (Costa Blanca) Costa Blanca Property | Search for property for sale in Albir (Costa Blanca) Costa Blanca Property | Search for property for sale in Pego (Costa Blanca)

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INDEX TO ARTICLE 3. Buying your Costa Blanca Property

Financing the purchase

Making an offer on a property

Formal Acceptance

Exchange of Contracts

Final completion

Registering the property

ARTICLE 1:  Locating a suitable Costa Blanca property.

Your first steps.

How much will it cost?

What type of property?

Searching for and viewing properties.

ARTICLE 2: Legal issues for Costa Blanca property buyers.

The NIE number

Bank accounts

Legal representation

Duties of your lawyer

ARTICLE 4. After the Purchase of your Costa Blanca Property

Post Completion

Banks Accounts

Exchanging/Transferring your money

Insuring the property

Inheritance tax

Renting your Costa Blanca property
 

 

Buying your Costa Blanca property | FINANCING THE PURCHASE

Raising finances for your purchase can be done in the U.K. or in Spain. It would make sense, however, to get your mortgage in Spain to avoid currency fluctuations. Euro interest rates are also generally lower than U.K. rates.

It used to be the case where you could get a 100% loan to price paid in Spain but this is changing rapidly.
At the present time (September 2009), due to the credit squeeze, Spanish banks have lowered valuation parameters and the amount they will lend, making it difficult to finance any more than around 50%.
However, with a low £ to Euros exchange rate, it makes good sense to borrow as much as possible in Spain as the amount to be repaid is likely to fall (if you believe that the £ will eventually strengthen).

The best advice is for you to meet with several banks and mortgage lenders and get an acceptance in principle to find the best deal possible, before you start searching for the property. If you simply go for the first mortgage that comes along you could be paying a heavy price.

Buying your Costa Blanca property | MAKING AN OFFER

You have seen a property you like and are ready to make an offer. The system for this is exactly as it is in England. You decide what sort of offer you wish to make and advise the Estate Agent.

They will contact the owners and put your offer to them and they will either accept or decline. If accepted, all well and good, but if declined you can go back and make further offers until you both reach an agreement or until you decide that you don’t believe the property is worth the value being placed upon it.

Buying your Costa Blanca property | FORMAL ACCEPTANCE

Once negotiations have been agreed upon you will need to formalise this in writing by way of a contract and the laying down of a deposit.

This initial deposit can vary but is usually around three thousand euros and will secure the property for you, for a short period, until your lawyer has carried out the necessary checks and will give you enough time to raise the finance to buy the property, if necessary.
Once the lawyer has approved the sale the buyer and seller sign a Contrato Privado de Compraventa (Private Sales Contract) and the seller pays a significant deposit (usually 10 – 20%).

The lawyer should ensure that the Private Sales Contract is correct and that you understand it perfectly, prior to paying the deposit or signing.
It is only after signing and paying that you cannot be gazumped without a penalty applying to the vendor.

Under Spanish Law, if the seller fails to comply with the Private Sales Contract then it is a simple breach of contract and the buyer may enforce possession through the courts or cancel the contract.
However, such litigation tends to be cumbersome and inconvenient for the buyer, with little chance of recovering costs or damages.
Sometimes irregularities are found concerning the title. Mostly these can be resolved but occasionally not and it is necessary for both sides to pull out.

Most Private Sales Contracts have an “Arras Penitencial” clause to resolve such difficulties.
Arras Penitencial is derived from Roman law and, in the case of an aborted sale, provides for forfeiture by the buyer of the deposit paid and repayment of double this amount to the buyer. 

PLEASE NOTE WELL: It is extremely foolhardy, for either the buyer or seller, to enter into a property transaction, or even to pay or accept a deposit, without a qualified legal representative.
The only exception to this is in the case of an initial deposit but even then only if this is done through a properly established and licensed estate agent, who would have a standard contract.

Under no circumstances should buyers listen to statements like “The Notary will sort it all out for us.” or “We can save money by doing it ourselves or going to a Gestor.” either from the seller or an estate agent.
The writer knows of many cases where irregularities have been created which severely compromise the title. Sometimes these occurred many years ago and after several subsequent sales, leaving expensive and protracted litigation as the only remedy – so please be warned.

It should also be noted that API’s (Agentes de la Propiedad Inmobiliaria) are also qualified for property transactions but their fees are about the same as a lawyer.

Buying your Costa Blanca property | FINAL COMPLETION

This is when you finally take possession of your property.

On the day of completion the deeds will be signed in front of the notary by both the vendor and purchaser. The final payment will be made to the vendors at this point. You now take full possession of the property and don’t forget to get the keys!

The Notary: Is an official of the state and is not a private lawyer. It is his duty to ensure that the sale of the property is officially noted and registered. He is not able to act in any way on your behalf although he is able to advise you.

Payment will usually be made by a banker’s draft, drawn on a Spanish Bank account or in some cases, in cash! It is important to speak to your lawyer about the final payment as many have experienced problems on the date of completion due to cleared funds not being available. If you intend on using a euro cheque drawn on a British or other foreign account, or you intend on using any other method except that of a banker’s draft from a Spanish bank, it would be wise to ensure that the vendors are happy with this well before going to Notary.

Buying your Costa Blanca property | REGISTERING THE PROPERTY

Your lawyer will be responsible for making sure that the documentation is registered at the property register where the Escritura de Compraventa will become your Title Deed. This will take two to three months. There will be taxes to pay at this point and once again your lawyer will advise you on amounts to pay and will usually collect take a payment on account from you in advance, and return any funds that are not needed once the process is complete.

Author’s Bio 

Colin Scriven has worked as an estate agent for 17 years, the past 5½ years of which have been in Spain. Currently he is the General Manager of Hamiltons of London SL with 4 offices covering the Costa Blanca North area, from Benidorm to Gandia (Costa de Azahar), with headquarters in Jalon.
Colin lives near Denia and has two young children who attend local Spanish School.

Buying or selling Costa Blanca property? – Consult Hamiltons of London, the Costa Blanca estate agents, with over 2,000 properties listed, and offices & affiliates in all Costa Blanca areas.
Hamiltons Homepage for Properties for Sales in Costa Blanca or the Costa Blanca area offices for -
Albir Properties | Calpe Properties | Denia Properties | Gandia Properties | Jalon Properties | Javea Properties | Moraira Properties | Pego Properties