Buying a house is a considerable investment that depends on many of factors, and it can be a long and complicated procedure in any circumstance. When you also add the issue of buying a property in a foreign country, the difficulties can multiply very quickly. In Spain, however, buying a home as a foreigner is more accessible than in many other countries because, as foreign buyers have similar rights as a Spanish citizen, there are no special restrictions.
However, there are some valuable steps you should know and tips to keep in mind when buying a home in Spain.
Choose who will help you
Our first advice is, as always, hire a trusted real estate agent. A reputable professional will save you time, money, and especially unpleasant surprises. Also, a real estate agent knows the available property for sale in the area and will have knowledge of crime rates, nearby facilities, and will be able to advise you to find a house matching your needs. Also, the real estate agent can help you with the necessary documentation and will ensure that the purchase process is as easy as possible.
On the other hand, it is a good idea to hire a lawyer to help you with the legal issue and make sure that each contract you sign has the best possible conditions in your favour. In Spain, the job of the notary is different than in many other countries; Although they have an obligation to advise their clients, this obligation is limited, and generally, a thorough investigation of the property is the job of the lawyer.
Study the property and negotiate the contract
Once you have found what consider the ideal house, study it carefully. If you have a professional real estate agent and a good lawyer, you will not have to worry about this, since they will be in charge of making sure the property is up to date with all the correct documents. They will ensure the sellers can transfer the property without problems, that the housing is free of charges, and a lot of other details that can only come out with a thorough analysis. As a private individual, and moreover, as a foreigner, it is vital to hire legal professionals, as there are many matters that could confuse someone who does not know the Spanish legal system well.
Once this investigation is completed, it is time to make a contract of sale or contracto of arras, that ensures that the seller agrees to sell the house after signing. Here it is essential that everything agreed with the seller is reflected in this contract. In the case of new construction, it should be noted that in Spain the promoters are required legally to ensure that the amount paid in the contract is returned if the works are not completed, plus legal interests.
What do you need to formalize the purchase?
All you need, in legal terms, is the NIE (Foreigner Identification Number). This number, which is unique to each individual, is vital to carry out any transaction in Spain. Since it must appear on all papers that you sign or are issued to you in Spain, you will have to have it before signing the deed. The NIE is not complicated to obtain, but it does take a long time; ask your real estate agent to facilitate the securing of the NIE to expedite the process as much as possible.
In addition to that, although it is not mandatory, having a bank account in Spain will facilitate all the procedures, since it will make payments faster and will surely save you some commissions.
Finally, remember that once you are the owner of a property in Spain, you must appoint a tax representative in the event you are not a resident in Spain.
Decide how you are going to finance your home
In general, buyers not resident in Spain can enjoy the same mortgage termss as Spaniards, that is, up to 80% of the total value in the case of a first home, and between 60% and 70% if it is a second residence.
This means that you have to have a minimum of 20% of the price of available housing, in addition to approximately 15% extra on the cost of housing to pay taxes, attorney fees, notary fees, etc. Also, your repayments cannot exceed 30-35% of your income.
Other relevant data to take into account is that usually, in Spain mortgages are contracted for at least five years, and a maximum of 30, with 75 years as the maximum age to finalize the mortgage. It should also be said that each entity has its own risk criteria, and which countries of residence can be accepted. Properties abroad are not usually accepted as collateral since it would be difficult to claim an overseas home.