Buying in Spain.
Discussion
Hi,
I'm not sure if the lounge is the correct place but is there anyone who has bought a property recently in Spain?
I'm not bothered about it being an investment or renting it out, just somewhere we can retire to in X years time. I'm wondering if there are still discounts to be had on the advertised price, as a few years ago you could generally get away with around 30% below list. Also what is the general cost to buy and any solicitor recommendations.
I've been looking around Denia or Javea as I've been there a few times and loved the area.
I'm not sure if the lounge is the correct place but is there anyone who has bought a property recently in Spain?
I'm not bothered about it being an investment or renting it out, just somewhere we can retire to in X years time. I'm wondering if there are still discounts to be had on the advertised price, as a few years ago you could generally get away with around 30% below list. Also what is the general cost to buy and any solicitor recommendations.
I've been looking around Denia or Javea as I've been there a few times and loved the area.
My advice it to speak to neighbours and understand all the commitments that are attached to a property and the current opinions of any appointed committee's / presidents
For instance, we bought from the bank. All was clear with the property - no debts. But the there were problems with the macro-community (committee in charge of the area) and the community groups (in charge of our development) that only got resolved with enough support from the residents.
There are a lot of developers who sold to undesirables to keep voting rights on these committees. This kept the money flowing to them and, in our case, didn't spend on maintenance or insurance.
I would do it all again as we're really pleased. Just beat in mind that you cannot check these things enough - solicitor searches will not bring these things to light.
For instance, we bought from the bank. All was clear with the property - no debts. But the there were problems with the macro-community (committee in charge of the area) and the community groups (in charge of our development) that only got resolved with enough support from the residents.
There are a lot of developers who sold to undesirables to keep voting rights on these committees. This kept the money flowing to them and, in our case, didn't spend on maintenance or insurance.
I would do it all again as we're really pleased. Just beat in mind that you cannot check these things enough - solicitor searches will not bring these things to light.
I'm in the process of buying a property in Spain just now. Key thing is to get a good lawyer that speaks English if you don't speak Spanish. Estate agent should be able to provide a choice of lawyers, without recommending any one in particular. The lawyer will check legalities of the build, make sure all is correct with the local town hall, electric company, water company, etc. Lawyer will also be able to arrange your NIE number (similar to your NI number in the UK, and you can't buy any major item in Spain without it). Consider giving the lawyer Power of Attorney over you in Spain so they can act on your behalf without you needing to be present to sign forms, etc.
With regard to discount, you're dealing with the seller (even if through the estate agent) so depends on how desperate they are to sell. Bear in mind that the market is pretty much at rock bottom just now and sellers may have paid more than double the current asking price for the property that they're now trying to sell so will be keen to realise as much as they can. Euro is still sliding against the pound (and, in my humble opinion, will continue to do so for a while yet) and, although house prices are starting to creep up as confidence comes back into the market, prices will continue to get cheaper in relative terms. Make sure you use a currency dealer to move your GBP into Euros as they'll be able to get you a much better rate than your high street bank.
Fees to expect are: Conveyancing (around 1,500€), NIE number (300€), Notary fees (900€ ish), 8% Transfer Tax on the highest of Purchase Price or Tax Value (decided by the local council), Plusvalia tax (around 400€), Power of Attorney (maybe 200€), so, in all, about 10% over and above the purchase price of the property. Also consider having a Spanish Will drawn up by the lawyer to ensure your property goes to your preferred beneficiary should you pop your clogs (shouldn't cost more than about 150€). You may also need to pay a deposit to have the property taken off the market.
Best of luck!
With regard to discount, you're dealing with the seller (even if through the estate agent) so depends on how desperate they are to sell. Bear in mind that the market is pretty much at rock bottom just now and sellers may have paid more than double the current asking price for the property that they're now trying to sell so will be keen to realise as much as they can. Euro is still sliding against the pound (and, in my humble opinion, will continue to do so for a while yet) and, although house prices are starting to creep up as confidence comes back into the market, prices will continue to get cheaper in relative terms. Make sure you use a currency dealer to move your GBP into Euros as they'll be able to get you a much better rate than your high street bank.
Fees to expect are: Conveyancing (around 1,500€), NIE number (300€), Notary fees (900€ ish), 8% Transfer Tax on the highest of Purchase Price or Tax Value (decided by the local council), Plusvalia tax (around 400€), Power of Attorney (maybe 200€), so, in all, about 10% over and above the purchase price of the property. Also consider having a Spanish Will drawn up by the lawyer to ensure your property goes to your preferred beneficiary should you pop your clogs (shouldn't cost more than about 150€). You may also need to pay a deposit to have the property taken off the market.
Best of luck!
Edited by H.7 on Monday 3rd August 23:28
excellent work. Thanks for the very good advice.
Hogansghost, are there committees for all developments? I guess it's like our parish council?
Does anyone have any recommendations for a solicitor? I had a friend who moved out there years ago and he had loads of horror stories of people being ripped off by estate agents and solicitors alike, so word of mouth would be safer.
Hogansghost, are there committees for all developments? I guess it's like our parish council?
Does anyone have any recommendations for a solicitor? I had a friend who moved out there years ago and he had loads of horror stories of people being ripped off by estate agents and solicitors alike, so word of mouth would be safer.
Mal001 said:
I've been looking around Denia or Javea as I've been there a few times and loved the area.
My father has had a small house in Denia for the last 25 years or so, I know he has a local legal bod and someone that looks after financials, I'll be seeing him tomorrow, happy to ask for some gen. I help people with the legalities of buying properties abroad for a living. My personal specialism is Spanish Law. I therefore deal with this market every day and although I am on the legal side rather than the selling side I do have an idea as to what is happening out there.
To answer the original question yes there are still plenty of bargains still to be had but the market is starting to pick up and prices have started to rise in some areas. The key is to understand that there is a difference between a property being cheap and it being a bargain. The areas that you mention are starting to recover now and we are seeing more people buy there, which will have the corresponding effect on prices. Of course the exchange rate at the moment is also helping to make properties out there look good value.
A quick word of warning about bank repossessions. Just because you are buying a repossessed property from the bank doesn't mean that it is good value. Many banks refuse to sell fro less than the amount that the property owes them (plus legal fees of repossession etc) and therefore are unrealistically high compared to other similar properties. Another thing to bear in mind that even if you are buying from a bank it doesn't mean that everything is OK with the property as often they don't actually repossess and just take over control of the property in order to keep their costs down.
The important thing with prices is to get a good valuation. In Spain there are several different ways of obtaining a valuation. Some people wills imply tell you that the rateable value (Valor Catastral) is the value. Other people will take the square area of the property and put it into a formula which will "magically" come out with a valuation. You don't want either of those - you want to know what the current market value is. If you send me a private message I can put you in contact with people who can obtain valuations for you and also give you loads of pointers on the legal side (the company I work for has a brochure with a checklist, glossary, budget etc that I can send you).
The Association of International Property Professionals http://aipp.org.uk/ also has lots of useful information about buying abroad. I have been on the Board of the AIPP for the last few years and have just been voted Deputy Chairman http://www.aipp.org.uk/meet-the-board/.
Hope that this helps but if you need anything else please feel to send a PM.
Peter Esders
To answer the original question yes there are still plenty of bargains still to be had but the market is starting to pick up and prices have started to rise in some areas. The key is to understand that there is a difference between a property being cheap and it being a bargain. The areas that you mention are starting to recover now and we are seeing more people buy there, which will have the corresponding effect on prices. Of course the exchange rate at the moment is also helping to make properties out there look good value.
A quick word of warning about bank repossessions. Just because you are buying a repossessed property from the bank doesn't mean that it is good value. Many banks refuse to sell fro less than the amount that the property owes them (plus legal fees of repossession etc) and therefore are unrealistically high compared to other similar properties. Another thing to bear in mind that even if you are buying from a bank it doesn't mean that everything is OK with the property as often they don't actually repossess and just take over control of the property in order to keep their costs down.
The important thing with prices is to get a good valuation. In Spain there are several different ways of obtaining a valuation. Some people wills imply tell you that the rateable value (Valor Catastral) is the value. Other people will take the square area of the property and put it into a formula which will "magically" come out with a valuation. You don't want either of those - you want to know what the current market value is. If you send me a private message I can put you in contact with people who can obtain valuations for you and also give you loads of pointers on the legal side (the company I work for has a brochure with a checklist, glossary, budget etc that I can send you).
The Association of International Property Professionals http://aipp.org.uk/ also has lots of useful information about buying abroad. I have been on the Board of the AIPP for the last few years and have just been voted Deputy Chairman http://www.aipp.org.uk/meet-the-board/.
Hope that this helps but if you need anything else please feel to send a PM.
Peter Esders
Edited by Esders on Tuesday 4th August 10:16
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