Important Tips

Following are some good tips for successfully buying a property:

• Use an English-speaking lawyer to check your purchase contract, and to help you decipher the meaning of all those Spanish documents that you’re sure to encounter. Even if you’re fluent in Spanish, a good lawyer is indispensable, as they know the local laws and customs better than anyone.

• Do your homework before you start shopping around : There’s no point trying to buy a house without knowing how the buying system works. You could end up making a terrible (and costly) blunder if you go in with your eyes closed. Things you’ll need to know include how much you can borrow, what you have to spend, and how to get a mortgage agreed in principal.

• Whatever you do, don’t buy the first property you see! Even if you fall in love with a property right away, make sure you visit other properties, look at your options, and consider every alternative before you buy. It is also important to visit the house at night and in the morning for nightlife and traffic. Also, try to imagine what the house will be like at the height of the summer – is it in direct sunlight? Are there going to be tourists everywhere? Questions like this are very important, as they will affect the living quality of your property.

• Be prepared to buy off plan – even if it means a wait : At least you can secure your buying price at today’s exchange rate and prices. Talk to your real estate agent about this, and about other options open to you to.

• Consider buying your property in the spring : At any case, you should certainly look to buy your house before July when the hoards arrive, or just after the summer rush. That way, you won’t be caught up in the buying frenzy.

• Property: It is vital to make sure the description of the dwelling corresponds to the one you are buying. Read carefully the details, location, number of floor, inside division etc. The land registry certificate might be as clear as the air, the owner may offer you discounts and also a bank guarantee in exchange for the monies you are lodging with him to secure the property and indeed, many more facilities. But in spite of all these assurances, he might be selling the buyer another property of his own, not the one the buyer wants. What happens then? The seller is not really defrauding, unless the purchaser can prove it. And all the evidence supports his innocence: private purchase contract, correspondence exchanged, completion at the Notary Public, all these agree on the same property details. The buyer has an unencumbered property which is, quite simply, not the one he wanted but a cheaper one the seller wanted to get rid of.

• Mortgages, liens, encumbrances or any charge registered against the property: A mortgage on the property is something normal and a buyer should not be surprised to find one: all contracts include a clause stating that the seller sells free from any charge, including mortgages. But beware, since although a mortgage can be easily cancelled, charges or liens might be registered against the property due to court order arising from a previous procedure where the buyer is not party. A lawyer will make sure the property is clear in this respect.

• Date of completion: If the buyer is raising funds, he should agree a completion date far enough in time to enable the balance of the purchase to be in place. It is normal for buyers to exceed this date due to banking delays in swift transfers and clearance of drafts. Although not recommendable, not meeting the date of completion does not automatically amount to loss of deposits. The seller who wishes to discharge the deal will have to prove that the buyer has deliberately delayed and avoided payment.

• Costs: The most favourable (for the buyer) wording of the clause regarding costs is the one which states that the costs arising from the transaction will be borne by the parties according to the provisions of the law. Agreeing this, the buyer saves some money. However, it is normal for the vendor to impose on the buyer payment of all costs. These costs include Notary fees, Land Registry fees and the Plusvalía Tax. (Increase in the value of the land over the years.). It is matter to negotiate betwee the parties.

• Inventory: If the price includes furniture or other items, run through the inventory list to make sure it is correct according to what has been agreed.

• Who holds the monies? The deposit should be left with either a reputable and financially sound agency or directly with the seller. The most secure bank account for lodging these monies is the clients account of the lawyer of the vendor. Although not technically an escrow account, it is bonded inasmuch as lawyers have very restrictive rules as to monies given to them for custody. It is recommendable to use this procedure where the owner of the property is an offshore company or when the buyer´s lawyer advises accordingly.

If you’re considering buying a second home in the sun, a home from home abroad or an investment property overseas and you’re in a hurry to get started, these tips about buying property abroad should set you off in the right direction.

Why you need a lawyer

Legal systems differ from country to country so never assume that you understand how exactly the entire house purchase process is going to work, and never expect things to necessarily go exactly your way! To be assured of the fact that your personal interests are being looked after and that you, your money and your property are 100% secure, legal and legitimate it’s essential to seek independent legal representation in the country you’re considering buying property in.

This is especially true if you’re buying property in a country where you do not speak the language. You will be putting your name, signature and bond to contracts and legally binding documents…and however pleasant and helpful the real estate agent or vendor are it’s in your own best interests to make sure you have a local lawyer who’s in your pay representing you at such times.

Finding a Builder

If you buy off plan or you’re self-building or renovating abroad you need to factor contingency into your overall time planning. Weather, seasonal pressures, holidays, availability of essential building materials – the list of factors that can adversely affect the build time of a house is almost endless! Your builder may confidently assure you that your property will be completed by a given date, and yet, depending on where in the world you’re buying your property, the completion date is likely to always be delayed! It’s just ‘one of those things’.

Don’t overspend

Another factor, like time, that can often spiral a little out of control is the budget. Often we’re told that we should add an extra 10 – 20% on to any purchase price for fees and taxes; that’s all very well, but actually you have to factor extra money into your budget for things like visiting your second property abroad during and after the build phase, extras like light fittings, curtains, kitchen and bathroom upgrades, the application for and connection of vital services, removal costs and/or furniture purchase costs, satellite TV installation, air conditioning or heating installation, car rental. If you have a set budget limit it’s important to sit down and work backwards including all the potential extras and fees and then see exactly how much is left for your property purchase. Don’t be caught out and seduced by the sunshine, set budgetary limits before getting on the plane!

Keep Communication Lines Open

If you’re buying a brand new property abroad – either off plan or during its build phase – make sure you have some way of keeping in touch with the developer or managing agent. Ask in advance about how often you will be kept up to date with progress, whether they can email or send you regular visual updates and what level of ongoing communication you can expect for them. Buying property is a very big commitment – financially and emotionally – it’s important you’re not left in the dark, sitting back home wondering how on earth your investment is coming along. Sort out your lines of communication before you sign on the dotted line and make sure you’re entirely comfortable with how the process will work.