Negotiation:
When you have found a property you would like to purchase, your agent will act as a negotiator between you and the seller or seller's agent. While it is true that most sellers expect to receive an offer lower than the asking price, negotiation is a two-way process and often, circumstances may dictate what is acceptable or not.
What can you, as a buyer, offer the seller in exchange for accepting a lower offer?
Are you a cash buyer, which puts you in a strong position to complete?
Do you have an agreed mortgage in principle?
In addition to the sale price, you can negotiate other matters such as the terms of the purchase, the method of payment, whether furniture is included. Buying a property on the Costa Blanca North is a simple process with MG Villas Luxury Property.
Booking:
To secure the property, the buyer is expected to place a reservation deposit, usually between 5.000€ - 10.000€ (depending on the value of the property). This is held in MG Villas Luxury Property's client account, unless otherwise agreed by both parties. MG Villas Luxury Property, draws up a reservation contract detailing the agreement and confirms receipt of the reservation deposit. The reservation deposit is non-refundable in case you change your mind but, if both parties agree, it can be refunded if you do not get a mortgage. Once the reservation deposit is received, the property will be taken off the market for a period of 2-3 weeks, giving you time to verify the viability of the purchase. In the very rare cases where it is determined that the property is not legally viable for sale, MG Villas Luxury Property will refund the deposit in full.
Transfer.:
MG Villas Luxury Property, always recommends that you engage competent legal counsel to carry out the transfer of the property, and we recommend that this counsel be different from the one used by the seller. We can recommend several good local 'abogados' (Spanish lawyers) in the area, generally making our recommendation based on your language or personal requirements. Lawyers in Spain will generally be able to support you through the whole process of buying the property through to registration, changing electricity and water contracts and other financial and legal matters (tax planning, wills, NIE numbers, etc.) so it is important that you feel comfortable with the one you employ. We are not affiliated with any lawyer, so you can be assured that our recommendation is unbiased.
Checks and contract administration:
Once the booking is paid for and your solicitor instructed, MG Villas Luxury Property, will ensure that all necessary and available documentation is handed over so that the solicitor can carry out the relevant legal checks. These include:
Purchase costs: The costs of buying a property in Spain can be broken down into:
THE PURCHASE PROCESS IN STAGES
Step 1: from the day you put down the deposit to step 2, it is normally 2 to 4 weeks. Once the buyer has found the house they want to buy, they will be asked to pay the reservation deposit (usually between 5,000€ - 10,000€) and sign the reservation contract. This takes the property off the market while your lawyer, or MG Villas Luxury Property, makes the initial checks. The reservation agreement states that the seller agrees to take the property off the market for a specified time, allowing the buyer to verify the legal viability of the property and arrange a mortgage or other financing as necessary.
Step 2: From this step to completion at the notary, the timing is generally determined by you and the vendor (e.g., how long you need to arrange your funds, how soon the buyer can move in, etc.), but is typically within 6 to 8 weeks. After paying the reservation deposit, you, the buyer, should instruct a solicitor to carry out checks on the property to establish its legal viability. These checks will ensure that any debts on the property are known and assigned to the seller and that the property is properly registered and fully legal. The lawyer will draw up a pre-sale contract (Contrato de Arras) which will confirm exactly what you are buying and the terms of the sale. On signing this contract, you will pay the balance of the deposit (usually 10-30% of the sale price minus the reservation deposit already paid) to the vendor. This contract is legally binding on you and the supplier. If you do not go through with the purchase, you forfeit your deposit, and if the vendor does not go through with the sale or if the property is not viable for sale.
Step 3: Completion of the notarized sale. After the signing of the pre-sale contract (Arras), further checks or legal paperwork may be required, especially if a mortgage is required, of which a bank appraisal will also be necessary. On the day of completion, you, the buyer and seller and/or your legal representative, will meet at the notary. A Notary is an expert in Spanish law, has legal training and is mandatory for any real estate transaction in Spain. They are government employees and therefore do not officially act for either the buyer or the seller and it is their job to validate the documentation related to the sale and purchase. They will ensure that all paperwork is in order before witnessing the transfer of funds and signing the title deeds of the property with you, the buyer.
Step 4: Settle in. Once the house is signed, you, the buyer, may want our help getting settled in. Over the years, we have found excellent people and companies that provide all kinds of services necessary for life in the new home. Pool and garden maintenance services, telephony, internet and TV services, school tuition, insurance, tax advice, vacation rental services, medical and veterinary experts, builders, plumbers, electricians, dry cleaners and movers - we can connect buyers with just about anything they need to get settled in!
Step 5: Within one month of purchase. Payment of taxes, duties and registration of the property with the Land Registry. After you, the buyer, have purchased the property, you have one month to pay the relevant taxes (transfer tax in the case of a resale property and VAT in the case of a new build). It is usual for the buyer's lawyer to arrange this and also to register the new ownership of the property with the Land Registry. As a general rule, a buyer who does not require a mortgage should allow around 12-13% of the agreed sale price for purchase costs. If a mortgage is required, allow an additional 1-1.5% on top of this. The following is a breakdown of these costs. With the exception of fixed rate charges (taxes and registration fees), MG Villas Luxury Property can recommend ways to reduce costs. Please ask for more details.
Tax on the purchase of residential properties
* The tax on the purchase of plots of land is 21%.
Legal fees: usually between 0.5% and 1% of the agreed sale price, or a fixed fee can be negotiated. A lawyer will charge you according to the service you require. This will vary according to the complexity of the purchase. Some lawyers charge 1.5% or more of the sale price, which is quite expensive unless your requirements are complicated. Even 1% may be unreasonably high given the work involved in buying an expensive property outright without legal complications. Conveyancing services should include changing utilities into your name, dealing with the registration of the property and handling the payment of the relevant purchase taxes. The attorney can also act in your absence if you give him/her a power of attorney or a lawyer.
Property registration fees: the expenses related to the registration of the sale in the land registry are almost always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side, you should calculate 1% of the purchase price declared in the deeds, although again it depends on the property and the area, and the fee could be less.
Mortgage fees and related costs: if you buy with a mortgage, this will generate several additional costs, e.g., property valuation (around 500 €), origination or opening fees, mortgage registration fees. The fees vary according to the provider and even according to the particular branch, but the buyer should allow between 1 and 1.5% of the mortgage value.
Bank fees: to pay for the property, you will need to open an account in a Spanish bank to pay the corresponding checks at the Notary and transfer money from the bank in your country. The cost of transferring the money can be up to 0.4% of the amount transferred. Most likely the bank check will cost 0.5% of your amount, however, MG Villas Inmobiliaria can advise you on ways to reduce these costs.
Currency exchange costs and savings: Banks often charge for moving, sending and receiving funds and rarely offer a good exchange rate when exchanging currencies. MG Villas Luxury Property recommends the use of reputable currency exchange providers who can often save hundreds, if not thousands of Euros during the purchase and indeed your ongoing living costs.
Real estate agency fees: these are normally paid by the seller.
Moving costs, pet transportation, vehicle importation, etc. MG Villas Luxury Property, can advise you on various ways to organize the moving of your prized possessions and how to save and reduce costs.
Furniture suppliers, renovations, decoration, insurance, security and connectivity, etc.- Once you own a property, if furniture is not included, you will have to furnish it. The cost of furnishing a property depends entirely on what you want. However, as a rule of thumb, a 2 bedroom apartment will cost around 10.000€ to 15.000€ to furnish well if you buy it all new. Of course, there is no limit to the amount you can spend, although you can get away with less than £10,000 if you are on a tight budget (everything from IKEA, for example). MG Villas Luxury Property, can recommend tried and trusted service providers: builders, plumbers, electricians, TV and Internet providers, etc.
Good advice: when buying a property in Spain, always keep digital and paper copies of all invoices related to your purchase; similarly, if you ever carry out construction work on the property once you own it, keep copies of all licenses and invoices. You may be able to offset these expenses against capital gains when you sell, thus reducing your capital gains tax liability.
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