As Spanish property specialists with a wealth of experience within the Real Estate Industry in Southern Spain, we are primarily focused on helping customers find their perfect property.
We will be able to recommend to you independent legal and financial advisors to help you feel comfortable with every phase of your property purchase in Spain .Ensuring that we recommend to you long established professionals who can speak your language, so fully understand the procedure every step of the way.
YOU HAVE FOUND YOUR PROPERTY – WHAT NEXT?
The Spanish system is simple, secure, transparent and efficient. Once you have found the property you wish to purchase, your offer will be presented to the Seller. If you offer is accepted, the next step would be for Universal Real Estate to draw up a “Reservation Contract”.
A reservation contract is used in Spain as a standard procedure to reserve a property for a specified period of time whilst your lawyer conducts the process of due diligence to confirm the legal status of the property and ensure there are no debts or liens/embargo’s on the property.
WHAT IS A RESERVATION CONTRACT?
Usually, the reservation contract would set out the basic terms and conditions of the purchase and would then be approved and signed by both the buyer and the vendor. This is a temporary reservation document only. Such a document would include:
- Full name of Seller and Purchaser
- The agreed purchase price
- Address of the property
- Date to sign a “private purchase contract”
- Other special conditions (subject to finance)
- Deposit amount placed to reserve the property
Depending on a value of the property a €3,000 – €6,000 deposit will secure the property while the “due diligence” takes place. This deposit can be paid by credit card, bank transfer or in cash, it can be held in our company client account or with a lawyer of your choice. The reservation deposit removes the property from sale, whilst your chosen lawyer carries out due diligence. If you need a mortgage , you should use this time period – usually 4 . 6 weeks to arrange your mortgage.
This reservation deposit is fully refundable in the event that your lawyer should discover any legal reason’s why you should not purchase the property. If you continue with your purchase after the due diligence the 6,000 Euros deposit will be used as part of the purchase price.
WHAT HAPPENS NEXT?
When your lawyer has carried out a full and thorough *Due diligence, you will be duly informed of his/her findings and discuss whether to proceed to the preparation of a private purchase contract or go straight to a final completion.
WHAT IS A PRIVATE PURCHASE CONTRACT?
A private purchase contract is a legally binding contract between the purchaser and the seller, setting out the terms and conditions of the contract. The contract will be prepared by your lawyer and will contain:
- A legal declaration from the vendor that he/she is legally positioned to sell the property respectively
- The exact address and dimensions of the property and its features as set out in the “referencia Catastral” Government registration of the property.
- The completion date and hand over of the keys.
- The agreed terms and conditions as agreed buy the purchaser and the seller
- 10% non refundable deposit is payable on the signing of the Private purchase contract
THE PRIVATE PURCHASE CONTRACT IS GENERALLY REQUIRED IF THE COMPLETION DATE WILL TAKE PLACE SEVERAL MONTHS, OR LONGER, AFTER THE RESERVATION DEPOSIT HAS BEEN MADE.
ADDITIONAL purchase costs
In Spain costs vary from 10% to 13.5% of the purchase price, and the costs are broken down as follows:
- 10% IVA (VAT) on NEW properties, 8% to 10% IVA (VAT) on pre-owned property depending on price category
- 1% Notary fee
- 1% Legal fees (the industry standard fee charged by most Lawyers to act for you)
- 1.5% Stamp Duty Tax (A tax charged to make all documents legal)
If you should require a mortgage, you should calculate an average of 1- 1.5% cost for the set up fee of a mortgage with a local Spanish bank. We partner with Martinez-Echevarria, an International law firm that provides a host of first class legal services. Established in 1983 on the Costa del Sol, their expertise in the area is well renowned and they offer continual access and up to date contact relating to your purchase.