Costa
Blanca Property Buyers Guide
By Colin Scriven
ARTICLE
3 - Buying your Costa Blanca Property
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.
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.
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.
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.
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.
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
|
