# House Purchase Process



## nearly (Jul 28, 2015)

Hi,
If i decide i would like to purchase a property within Spain, but my house in the UK has not sold at the time, what process is there for getting a property off the market in Spain without full funds available.

I have heard about deposit, but not sre of the value you must provide and what time scales you have to provide all the money

Also do some estate agents setup every thing up for you i.e. NIE number, Bank Account, Direct Debits etc ?

Anyone have any experience of this from scratch ?

Thanks
Neil


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## Lynn R (Feb 21, 2014)

nearly said:


> Hi,
> If i decide i would like to purchase a property within Spain, but my house in the UK has not sold at the time, what process is there for getting a property off the market in Spain without full funds available.
> 
> I have heard about deposit, but not sre of the value you must provide and what time scales you have to provide all the money
> ...


Personally I think it's a bit risky putting a firm offer in on a house in Spain before your UK property is sold. When you agree to buy here, often a reservation deposit is asked for, which can be as little as €500 (probably more if it's a high value property) which gets the house taken off the market. Then you are expected to pay the 10% deposit within a couple of weeks if all the initial checks carried out by your lawyer are OK. It's usual for the lawyer to hold that in their client account. Once the compraventa (initial purchase agreement) is signed by both parties, it's a binding contract and if you are unable to complete by the agreed date the vendor is entitled to keep the 10% deposit. If the seller decides not to go ahead with the sale, they are obliged to pay you double the amount of your deposit in compensation. Completion is normally within a couple of months of the compraventa being signed.

An estate agent can give you advice and help in how to get your NIE number and open a bank account, but they can't do the whole thing for you as you need to be there in person to prove your ID. They (or your lawyer) can arrange for direct debits to be set up for you once you have your bank account details.

Don't use a lawyer recommended by an estate agent, it is better to find one you can be sure is independent of both the agent and the vendor.


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## Madliz (Feb 4, 2011)

You can specify the date you wish to complete. If the vendor doesn't like it you can go your separate ways or try and compromise. 

I had a 'buyer' last year who wished to complete in six months, after paying a €5k initial deposit to secure the property. That suited me fine. He wanted to pay a further 25% of the purchase price a month later on signing the compraventa, but pulled out the week before, citing losses on the stock market. He therefore forfeited his initial deposit, which also suited me fine . If I had pulled out, I would have had to pay double that initial deposit - his €5k plus another €5k of my own on top. 

A contract like this - a _contrato de arras_ - does tend to make for serious deals, as each side stands to lose if they pull out. My parents in the UK, decades ago, were gazumped in the solicitors' office as their pen was poised to sign the contract and they lost their new house. They lost more than that, of course, through no fault of their own, with solicitor and surveyor to pay, whereas here you are compensated. Be careful, when paying a deposit here, that you can afford to lose it if you cannot proceed.

Bear in mind that the procedure is laid down in law, but the amounts and timeframe are negotiable.


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## chrisnation (Mar 2, 2009)

Google " _'Buying property in Spain' _RICS guide" [that's the Royal Institute of Chartered Surveyors et al]. New guide just out.


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## nearly (Jul 28, 2015)

chrisnation said:


> Google " _'Buying property in Spain' _RICS guide" [that's the Royal Institute of Chartered Surveyors et al]. New guide just out.


Thanks Chris,
Thats guide is really good and useful.

Neil


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## nearly (Jul 28, 2015)

I know you can get electronic guides and websites telling you steps. But can anyone who has moved from UK to Spain, explain from day 1 to them settled, what their journey was like. i.e. What did you do first from planning visits to see areas to removals, to what comes first with NIE, Bank Account and all the legal side to purchase of property.

Can anyone tell me there process they took.

Thanks
Neil


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## chrisnation (Mar 2, 2009)

Jeepers! That's a biggie! Huge!

I think one would have to start with 

"Woke up this mo'ning. B'lieve I dun dust my broom ..."

and finish, after a long and winding road with

"Sweet home Alabama, where the skies are so blue"

but substitute 'Alabama' with 'Barcelona/Valencia/Zaragosa' etc


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## chrisnation (Mar 2, 2009)

nearly said:


> I know you can get electronic guides and websites telling you steps. But can anyone who has moved from UK to Spain, explain from day 1 to them settled, what their journey was like. i.e. What did you do first from planning visits to see areas to removals, to what comes first with NIE, Bank Account and all the legal side to purchase of property.
> 
> Can anyone tell me there process they took.
> 
> ...


To be serious for a nanosec, I have opened two Spanish bank accounts without NIE, several years apart.


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## Lynn R (Feb 21, 2014)

Well, you did ask-

Idea grew that we'd like to retire abroad eventually and thought we should buy somewhere whlst we were still working and prices were affordable.

Researched which country we'd prefer, debated between Spain and Portugal and decided on Spain. This involved a lot of looking into stuff like the house buying process, costs of house buying and running costs, eventual income and inheritane taxes, medical facilities, etc.

I'd been working part time for a few years following taking voluntary redundancy so I decided to go back to work full time so I could service a mortgage on another property abroad, so I looked for another job and got one.

Used a couple of holidays in Nerja which was a place we'd holidayed many times at various times of the year including winter so we had a good knowledge of the general area and what the climate was like to narrow down the area we'd like to live. We decided on one area of one town, where we now live.

During the second visit I obtained an NIE (as the purchase was to be made by me).

Also during the second visit we made an offer on one property which wasn't accepted so we walked away as we felt it was overpriced.

Before visiting for a third time we contacted another estate agent and arranged to view a couple of properties with them, and also a firm operating at that time as a property finding service. They didn't charge us anything but made their money by sharing commission with the agent if they introduced a buyer.

Came out for a third visit and saw the properties with the first agent which were hopeless, but also viewed ten properties with the property finder who was very good and didn't show us anything that didn't fit our brief. One of them was the house we live in now which we really liked. Had a second viewing and agreed to buy. Put down a reservation deposit, and they introduced us to a local bank and I applied for a mortgage with them for approx 50% of the value, and opened a current account with them. I also put the purchase process in the hands of a Nerja-based law firm.

After a few weeks the lawyer advised me that everything checked out OK legally with the house, the bank approved the mortgage application so I paid the 10% deposit. We also agreed the completion date, and I'd given the lawyer power of attorney so I didn't have to come over myself to sign at the notary's office. I transferred the rest of my half of the funds and the lawyer arranged with the bank for the mortgage funds to be released. 

A few weeks after completion we came over and picked up the keys from the lawyer's office and took possession of our new (well, old) house. The direct debits for electricity and water had been put in my name by the agent, and I sorted out the house insurance and IBI direct debit myself. 

We used the house as a holiday home for 3.5 years before deciding to move over permanently, at which time I sold my UK house and paid off the mortgage with the Spanish bank.

It's now 12.5 years since we agreed to buy the house - and just about 15 years since the whole process first began - and are still very glad we did it and really like living here.


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## Pazcat (Mar 24, 2010)

A lot of times they want you to pay the 10% deposit and sign the contract before the property has been checked out though which as a buyer shouldn't bother you a great deal but as a seller is not a great move because it sets deadlines and requirements that you, your lawyer and the town halls just can't meet.
It could be a costly mistake especially if you know your pool needs legalising but the temptation of a sale is all too much for some.


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## snikpoh (Nov 19, 2007)

Pazcat said:


> A lot of times they want you to pay the 10% deposit and sign the contract before the property has been checked out though which as a buyer shouldn't bother you a great deal but as a seller is not a great move because it sets deadlines and requirements that you, your lawyer and the town halls just can't meet.
> It could be a costly mistake especially if you know your pool needs legalising but the temptation of a sale is all too much for some.


I would say that it would bother a *buyer *far more than a seller. For example, if I've shelled out 10% and signed contracts and only then find that the property is illegal, I stand to loose my deposit and may have to complete the purchase as I've signed the contract!

Surely you've got these the wrong way around?


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## Pazcat (Mar 24, 2010)

If that happened then I would sack your lawyer, if the property is illegal then the terms of the contract have not been met and the buyer can safely pull out and the seller is liable for double the deposit back. Make sure it is clear in the contract what the terms are and it should be fine.
Also a good reason to have your deposit in a holding account and not the sellers account.

We could of claimed this as the stupid woman representing the sellers didn't file something until two days before the notary, she had 3 bloody months to do it, and then requested a contract extension.
We could of said no but it was too late at that point and just wanted the house.


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