The Buying Process

When you find a property and agree a purchase price you will be asked to pay a non-refundable holding deposit in exchange for the vendor taking the property off the market.

This deposit guarantees your right to buy the property and is typically between £2 - £4,000 , however if you do not subsequently buy the property under the agreed conditions, you will lose your deposit. If the seller does not comply with the conditions, they will be legally obliged to give back double the amount of deposit.

Never pay deposits direct to the vendor, always pay via your lawyer or via the estate agent into a bonded client account.

The formal acceptance of your offer on a property will be in the signing of either a deposit agreement, or an Option To Buy Agreement; confirming your intention to buy the property subject to formally agreeing terms through the private contract (The Contrato de Compraventa) later on.

In the weeks following, your lawyer/Abogado will make a number of enquiries, searches and investigations on your behalf to make sure that the person selling the property is legally entitled to, the property is all it has been purported to be and that there are no outstanding debts, charges or legal proceedings on the property.

Once your lawyer has completed his searches and is happy with the terms of the private contract the exchange (or the signing of an option to buy off-plan) can take place. This normally occurs 2-4 weeks after the formal acceptance of an offer. The contract will set out all the agreed terms and a date for completion will be fixed. It is usual for the buyer to pay 10% for an exchange of private contracts. The balance is usually paid 1 month after on a re-sale, but can be longer if special arrangements are agreed with the vendor and will be in stage payments if buying on a new development.

When buying a property off-plan (yet to be built) you do not own it under Spanish law until it is built and the developer is ready to transfer ownership, therefore during construction your deposits/stage payments simply secure your legal right to buy the property when it is built. You should ensure through your solicitor, before you start making stage payments, that the developer/builder has a bank guarantee or insurance policy in place to protect your stage payments against non-completion if the builder goes bust. Despite this being a legal requirement it is usually ignored by some builders in Spain.

At completion you, the buyer, the seller and both sets of representatives including someone from the bank if you are using a mortgage will go to the office of the Notary Public to sign the title deeds, "Escitura de Compraventa". The Notary is a public official appointed by the government to witness the signing of all legal documents. The Escritura confirms that the property is sold free of debts (liens), mortgages, legal claims and tenants. The Notary does not check the terms of the deed but certifies that both parties understand and agree them. At this point the balance of payment is made and possession passes to the buyer. Finally your lawyer will arrange payment of taxes and fees, and register your title deed at the property registry in Madrid. It can take around 8 weeks for the deeds to come back; whilst you are waiting a simple copy can be provided and made available in a few weeks.