Beautiful sandy beaches, a major touristic destination, the fantastic climate and, of course, the easy-going life style are just some of the obvious reasons that pop up in your mind when thinking about buying property in Spain. In any case, if you chose to invest your savings in a quirky character home like a cortijo (farmhouse) with outbuildings, a singular villa, town house or a small apartment in a residential area surrounded by expats, you will need the services of these three professionals.
When arriving in your area of interest, you will encounter a vast array of companies that offer real estate services. How can you select a proper agent? First of all, find out how many years a company has been in business. A provider with more than ten years’ experience is a provider of best market practices that will assist you in every step of the transaction.
Local presence is another point to take into account. Property business is hyperlocal, in other words, supply and demand may vary from neighborhood to neighborhood within a city. Therefore, a local expert will always offer you the best options.
Still, there is a little caveat to consider: do not work with people who do not have an office or aren’t registered API, Agente de la Propiedad Inmobiliaria (Legally Registed Real Estate Agent). Although their low rates may seduce you at the beginning, bear in mind that you can encounter various inconveniences at a later point such as hidden costs or extra paper work that needs to be taken care of for the property to be sold. Buyers entering into illegal or incomprehensible purchase agreements is also not unheard of. Since the recent financial downturn many of these corredores (free brokers) have popped up promising deals too good to be true, so watch out!
Although most reputable real estate agents count on legal departments to help with clearing up any paperwork, employing an independent solicitor makes a lot of sense. They can support you with local taxes, legal implications in your pension rights, residence status, and inheritance laws. Regardless how similar or close to your country Spain might be, keep in mind that laws will definitely be different.
But how can you find a good solicitor? My advice is to ask your embassy or consulate for a recommendation. Usually, they maintain lists of lawyers or other professionals alike who are well versed in both Spain’s laws and languages. They can translate your contracts and explain any detail of the transaction. Moreover, if your intentions are to let your property later on, the solicitor will calculate your rental taxation in order to plan your leftover income. Remember that your real estate agent’s responsibility ends when you receive the keys of your new home.
However, seeking advice from a solicitor about whether your investment is a good value for money or not is pointless as they are not market experts.
Are you planning to finance 100% of your property from your savings? If your answer is yes, you can skip this paragraph. If it is no, then you need to think about selecting a good bank which can save you a lot of money and hassle. Non-Spanish nationals can apply for a mortgage in Spain, however the maximum amount granted will range from 40% to 60% of the surveyed value and at more stringent conditions of those in your country.
If you are financing your purchase in your country and in a different currency, be aware of the currency exchange rates. These are not a small cost since in a twenty years’ mortgage, they can fluctuate up to 40%, causing uncertainty in the repayment of your monthly instalments. What we recommend in this case is to shield your exchange rate against volatility. Most international banks offer this service.
In conclusion, buying property abroad is a huge decision as the costs involved can be quite high. It makes sense to look for the advice of professionals who can safeguard your interests in a country you are not yet familiar with.
Manuel Rodríguez is in charge of the International Accounts Division at Grupo Vive (Real Estate). He holds an International MBA (IE Business School) and got more than 10 years international experience working for ICEX (Spanish Foreign Trade Institute) and for some multinationals.
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