Buying a Property in Spain: a Step–by–Step Guide
Step 1. Reservation Document
You have found your Spanish Dream Property, and have decided to buy it. After the price has been confirmed verbally, a Reservation Document will be made.
The purpose of the Reservation Document is 1) to have a written and binding agreement between you and the vendor, so that the price is fixed, and 2) very important for you, that the vendor will take the property off the market for a limited period of time, while your lawyer is checking that all is in order.
This mean that you have time to instruct a lawyer, and your lawyer have time to carry out his due diligence, without you having to fear that the vendor will sell the property to someone else.
Any “Special condition” ie. the property is sold fully furnished or unfurnished or subject to finance, will also be part of this agreement.
The correct procedure is that the buyer makes a reservation deposit and sign the reservation document, when this is done, the vendor agrees with his signature.
For your peace of mind, Tapas Properties will always insist that you transfer the reservation deposit to your lawyer and never pay it to the vendor directly. This makes your deposit safe.
The actual deposit amount can be anything from 3,000€ to 10,000€, depending on the property you are buying.
At this point, you have committed yourself to buying the property, and the vendor is committing himself to selling the property to you.
The deposit is non-refundable, but if there is a legal problem with the property that makes the purchase impossible, or the vendor is not fulfilling the Terms and Conditions agreed, the deposit will be returned in full to you.
The purchase of the property is always “Subject to Due Diligence”
This means that your lawyer will initiate a proper legal due diligence process to ensure that the vendor is able to transfer ownership of the property to you without problems.
An estimated completion date is also set out in the Reservation Document.
Step 2. Private Purchase Contract
When your lawyer has completed his Due Diligence, and is satisfied that all is in order, he will draw up the Private Purchase Contract, and in normal circumstances you should be able to exchange contracts within two weeks of signing the Reservation Document. At this point you would normally pay 10% of the purchase price to the vendor.
Between this point and the actual date of completion, your lawyer will assist you in obtaining a Spanish Tax Identification Card, called an NIE number, and opening a Spanish bank account. Both of these formalities are a legal requirement to buy a property in Spain.
A good lawyer will also make sure your new property is connected to Gas, Electricity and water, and a direct debit is set up between your utility provider and your bank account. It just makes life a lot easier when these things are taken care of before you move in.
Step 3. Completion.
On the actual date of completion, which takes place at the Notaria, or the Public Notary’s Office, all the legal paperwork and documents belonging to the house, will be checked one more time by the Notary Lawyer in front of your lawyer and the vendor´s lawyer. The Tittle Deeds will be signed, the final payments will be done to the vendor, and at that time, ownership of the property has been transferred to you and you will receive the keys to the property. You are now the new proud owner. Congratulations!