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IDILIQ EstatesBuyers GuideThe costs of buying a property Resale Properties New build and Off-plan Extra fees Different ways of purchasing
Buying a property in a foreign country mayseem like a daunting and scary prospect, butalways remember “buying your dream home,should be fun” In order to really feel safe and reassured we allneed to know the facts and do our research andfor this reason we have compiled this simpleyet informative guide to help you feel at ease. There are no silly questions when it comes to alife changing purchase like this so always besure to ask your trusted local real estate agentas many questions as you can, after all we arenot buying a loaf of bread!If you want to skip this guide, and any otherguide for that matter make sure you follow thegolden rule: Always choose the right agent, thismeans, not only, that they seem nice andunderstanding but most importantly possessthe local knowledge that cannot be learned in abook, or taught in some training manual. Thetrue meaning of Local Knowledge means alifetime of living, breathing and loving the localarea with an understanding of all the areas in adeep and personal way that only a true localcan boast. We hope that this book will be helpful in yourultimate decision to buy here on the stunningCosta Del Sol and we cannot wait to meet you.
Daniel Boland Written by
THE BUYING Selection 1.2. Legal Advice 3. ReservationBy balancing your needs, budgetand desires with our understandingof the marketplace, we do our verybest to make a selection of newhomes for you to view when youvisit Costa Del Son.It is advisable for all non-residentproperty owners to appoint aSpanish based lawyer so they cantake care of all the necessary legalmatters throughout purchase ofyour home as well as making sureall your taxes are paid each year,including payment of rates to thetown hall and annual property tax. This document is signed with thedeveloper in order for them to takethe property off the market.Normall, a minimum of 6.000 Eurosis paid upon signing this document.
PROCESS 5. Taxes 6. Final Steps 4. PPC This contract covers all the terms,conditions and obligations of thepurchas, such as: property that issold and it’s annexes, the pu price,the conditions and obligations ofeach party, terms and means ofpaymen, date of completio, etc.Upon exchanging the privatepurchase contrac, the buyer shallpay from 10% to 30% of the totalprice as a confirmation of thereservation of the property.Depending on the type of propertyyou are purchasin, we candistinguish between two types ofsituations for the taxes andexpenses of purchasing a property:first transmission and secondtransmission or resale. All names on contracts related tothe property will need to beupdated when you become a newowne. This includes all utilities (water & electricity ), council tax(IBI), rubbish tax (Basura), as well ascommunity fees.
Selecting the right agent 1. When selecting an agent you will have morethan enough to pick from but beware of theflyby night agents who have moved to the Coastfor a new life and due to the zero barrier entryto the real estate business do not require anylicense or formal training…
It is far more common than you wouldthink for agents to tell you exactly what youwant to hear as the costa del sol is a verysaturated space for real estate agents andthe little unknown agents will always fighttooth and nail for any business they canget.Currently the Costa del sol is a sellersmarket and the demand is higher than ithas ever been so what does this mean toyou? In short it means that all the researchyou spend your precious time doing endsup being for nothing as agents will oftenmarket properties that have been soldmany months or years ago and that do notreflect the current prices of the market inorder to attract your business. It is verydisheartening to fall in love with a propertyonly to come all this way and it has “justsold” but that there is one similar for Xthousands more expensive.Trust is key and based on several factors.Our personal opinion, is that if you aredealing with a company that has only beenoperating for a short time, a few years orless, it´s probably best to avoid them. If anagent has only been living on the Coast fora short time this can also be a red flaghowever… this will also depend on the ageand professionality of their company. Howwell have they been trained, how long hasthe management and directors been livingand working on the Coast.
Selecting an agent and sticking to thatagent from the very beginning is vital asthis will save you so much time and effort.Any agents worth your time will work withan MLS systems (Multilisting system) this means that they pay tobe connected to all of the other major realestate agents and developments givingthem access to the entire market and notjust their own preferred listings.It´s worth noting, that finding andcommitting to just one agent will normallyresult in a far better service and resultsthan using multiples. At Idiliq Estates westrive to treat all potential buyers in exactlythe same way, but agents on the Costa delSol mainly work on a self employed,commission only basis. With the largeamount of work and manhours that can gointo putting what seems like a simple day ofviewings together and the large chunk ofearnings that is taken for social security,tax, huge fuel costs and the various othercosts associated with the profession, theaverage agent will want to work withpotential buyers who are not about topurchase with someone else. While mostcompanies earn large commissions on thesale of a property, you´ll find that anindividual agent will only see a fraction ofthat. This makes finding the right agent foryou, a top priority.
2. The costs of buying a property 3. Resale Properties 4. New build and Off-plan 5. Extra fees The costs of buying a property vary from 10%to 14% depending on multiple factors. If you’re buying a resale property, the tax ratehas a fee of 7% (until the end of 2022).New developments have a 10% new build taxon top of the price of the property. On top of the purchase tax, the buyer needsto take into account the following:Stamp duty charged at 1.5%Lawyers’ fees charged at 1% of the purchasepriceNotary fees and other expenses varying from1% to 1.5%.
6. Different ways of purchasing If you are paying in cash, the buyingprocess can move quickly and gives thebuyer more room to negotiate with thevendor.If you are arranging a mortgage here inSpain, you will have to account foradditional set up costs and fees. We haveexcellent contacts with banks, mortgageadvisors and currency exchange companiesin the area that we can introduce you tofor any help.
WHAT IS OUR PRICE POINT? Although this seems very obvious we must ask ourselves what our TRUEbudget really is. When we take the following potential buying costs (seebuying costs) on top of the purchase price and the use of a mortgage, thepurchase of a brand new property or a second hand property here is alist of extra potential costs:1. IVA (VAT) this is usually 7% of the purchase price but can be as highas 10% if we are buying a brand new property. 2. As a rule of thumb when buying a new property we allow for a 10%buying cost for a second hand property this would be broken down tothe following:7 % = VAT1% = Lawyers fees1.5% = stamp duty and notary0.5% = miscellaneous (better to be safe than sorry)(note that buying costs will change when we add mortgages fees)How can we save on these type of Costs? Always make sure you use areputable foreign exchange company. You can save up to 5% which is avery significant number when we are paying hundreds of thousands for aproperty! 3. Is the property furnished? How much will it cost to furnish if not? E.gYou can factor 10 - 30k for an average 2-3 bed apartment, to give a ballpark figure. 4. Will there be any refurbishment or building works needed such as aswimming pool a new kitchen, new flooring and so much more. 5. Will we be renting our property? How much could we market it forand what difference will the season make? 6. Will we be buying a vehicle and do we need to store it? 7. Will we be using a management company to keep our property safeand clean? This subject can be very long winded but it is always good to look at allthe factors when purchasing a property in Spain and always overcompensate.
OFFERS?
The old school belief that you can come to Spain and source a bargain with acheeky offer is no longer strictly true. That being said, it is not to say it can´tbe done on some rare occasions.As a rule of thumb the average offer that is being accepted is 2 - 5% off themarketing price.(please note: the ability to pay for the property in cash and not with amortgage will often hold very little water as the majority of buyers from150,000 to millions of euros are cash buyers)When placing an offer, we must remember that we must make these offersformal to put you in the strongest possible position to fend of any othercontenders.A formal offer will usually be done by the signature of a “reservationdocument” this is a letter of intent and will include the following:1. The offer price2. 3 - 6,000 euro deposit lodged with your lawyer with a receipt.3. The date we will be paying our next installment of 10% for the privatepurchase contact (this is often 10 - 14 days from the offer acceptance)4. Date for the notary and final signature of the title deeds this can be 6 - 8weeks but may be quicker if we have our finance, NIE number, and otherdocuments all in place.5. The legal requirements of both parties such as any penalties for the breachof the reservation contract. For the buyer, this will usually mean loss of thedeposit if you simply decide to change your mind. For the seller, a penalty willoften be in place to stop him selling to another buyer if they so choose. Thepenalty for a seller is usually the return of the deposit to the buyers. In somecases, the buyer may receive twice the deposit back if the seller opts tochange his mind or sell to someone else.The first stage of the process is for the buyer to do their research and decideon setting their budget (if a mortgage is required, it’s important to visit amortgage advisor first to get a better understanding of how much they wouldbe willing to offer you), pin point your desired area and prepare a must-havelist. Bear in mind, no property is ever going to be absolutely perfect but a‘non-negotiable’ list will help both you and the agent find a property that ticksmost of the boxes.As with most things now, the internet is the most popular tool for thosesearching to buy properties. While this is incredibly useful, you don’t want tobe contacting multiple agents about properties you’ve seen on different sites,as this is when the process can become confusing.What we recommend is choosing a qualified, trustworthy agency first with alarge inventory of properties on the Coast and good contacts in thecommunity. Established agencies in Spain are part of networks that shareproperties between them and as a multiple-listings agent, Alegra Estates hasaccess to thousands of properties along the Coast to give you maximumchoice.If you find properties you like online, send it to your one trusted agent whocan then search for properties matching your criteria and arrange viewingsfor you. This method allows us to really understand what you’re looking forand makes your experience that much simpler.
DOCUMENTS YOUNEED
As we prepare to visit and possibly purchase our dream property in spainthese are the following documents you should prepare. Due to the Europeanlaws that protect you and your investment in Spain we must make sure wehave the proof that our funds come from a reliable source. Here is a quick list:1. Passport/s of the purchaser2. NIE number, this is the national number needed to buy in spain./ServiciosConsulares/Paginas/Consular/NIE. Although this may seem quitedaunting, fortunately your lawyer will do this step for you and often thisincluded in the price of purchase that each lawyer charges.3. P60/TAX RETURN or any proof of funds4. Your home Address and proof of address (utility bill, etc.)
WeIDILIQ ESTATESIdiliq Estates is a company that builds onextensive experience in sales, rentals, propertydevelopment and hospitality services to offerone of the broadest ranges of homes for sale onthe Costa del Sol and expertise across the realestate disciplines. Specialists in bringing hotel and resort-basedaccommodation to market with over 2200 newunits sold across Spain, the UK, Turkey, andthe USA, Idiliq Estates specialise in finding theperfect home for you to love and enjoy;fantastic investments that also work for you orin many cases, a combination of both.
IDILIQ Estates Local 28, Edificio D, Centro de Negocios Puerta de BanúsN-340, Km 175, 29660 Nueva Andlaucia, Málaga +34 951 123 083 | +44 (0)330 179 8687 info@idiliqestates.com