Buyer's market for real estate in Spain - lowest prices ever!

chrysolite By chrysolite, 4th Apr 2010 | Follow this author | RSS Feed | Short URL http://nut.bz/n8t7_8e4/
Posted in Wikinut>Money>Property

Since Spanish banks are now throwing reposessed mansions, houses, apartments, even shops and businesses on the market at real low cost, the prices for real estate in Spain gets lower and lower every day. It is a good opportunity now to acquire "a place in the sun", in fact, there are really attractive and unbeatable offers. But be careful! There are a few hurdles you have to overcome before your new home will be "home, sweet home"!

Real estate companies continue to offer their objects at top-prices

Understandable. The higher the selling price the higher the commission they get, between 2% and 4%. And trying it on is not against the law! So the first advice surely must be: Do not ever buy at the asking price. Take your time, barter a lot in order to learn what others have learnt a long time ago: bartering! Just imagine you are at an Arab basar, everybody knows to barter there!

Get the book!

Do invest in a book about buying real estate in spain. The authors usually have more than just their own experience. With that you save an enormous amount of money and disappointment.

You do need an interpreter

Don't try to save at the wrong end. If you do not speak Spanish real well, take an interpreter, preferably one who also speaks local dialects like "Valenciano" or "Catalan". Of course, interpreters do know about the different laws that are applicable in England and Spain, they live here! But, of course, they are not solicitors. In any case, they are a good source of information, so just ask!

Do you need a solicitor?

By law, you don't. In Spain only a "notario" is allowed to finalise the selling and buying papers up to the registration of the house in your name. But solicitors can find out about the "history" of a given house and there might be a lot!

  • Does an "escritura" (registration papers of a property) actually exist?
  • Is the seller of the property really empowered to sell? Inheritence issues may take a long time in Spain, so be careful!
  • Is there a mortgage or any other debts on the property?
  • Are really ALL invoices paid, i.e. taxes, electricity, water, rubbish collection, telephone, gas? If not, the new owner of the property pays.
  • Does the property really have all the necessary papers and is it properly registered in the "catastro"? There is quite a big "black market" of not registered properties and they seem so cheap!

Ask for a survey!

Mortgages are still quite cheap in Spain and if you need the bank to buy your house, the bank will send a surveyor to evaluate the property. These people almost always find all the faults and write an evaluation on it. The bank will then decide whether they will give a mortgage often up to 70% of the total price. Unfortunately the banks are slightly reluctant to give any mortgage or loan at the moment, but that can change again anytime.

Even if you want to buy the property for cash, ask an independent surveyor BEFORE you sign the contract. If you try to save money here, you WILL regret it. The payment of the property via bank cheque or cash will always take place in front of a "notario". And if you pay cash, don't be surprised if somebody takes a few notes and hurries to the bank to get them checked out.

What problems can I look out for myself?

There are actually often complete urbanisations/estates that do not have electricity or running water or telephone installed. ASK AND TRY EVERYTHING OUT. Switch on the light, open the tap and have a look in the garden if the waste water is not just running into some quiet corner. All this is still no guarantee! Investigate all installations and look at the accompanying invoices. Do they exist and are they paid? Or maybe the water comes from a rain water cistern and electricity from a small solar power installation? Possibly you are happy with such a setup and you prefer to be independent of the official Spanish suppliers for electricity and water which are a bit haphazard at times, but you must know what's what and if you are still happy about the facts, surely this can lower the price quite a bit!

In the past and present some of those urbanisations are built near beaches, beautiful complexes, but after a few years they start to subside. Have a very good look at the walls and behind cupboards! Are there little or bigger cracks, is paint falling off in places? Have a look BEFORE you buy because afterwards any repair will be costly and it will be YOUR money.

Buy in heavy rain!

99% of all roofs in Spain are not totally water tight. In a "normal" rain, most houses are probably still dry, but in Spain there is an always recurring "gota fria" which really only means "cold drop". But this weather comes with very high winds and torrential rains and in that case there is only one solution: put bowls where the roof is dripping. Or a new roof which again costs your money.

Preliminary contract and final contract

Usually you sign two contracts when you buy property in Spain. The first "preliminary contract" is a "promise to buy" and usually you are asked to pay 10% of the purchase price with it which will be deducted when the final contract is signed in front of the "notario". Sounds pretty innocent, but this system was introduced to make sure that a promise is not just a promise. The law states now that if you do not buy the property AFTER signing the preliminary contract because you've changed your mind, then the seller can keep the money "for expenses". If we assume, as an example, that the property you want to purchase costs 150.000 Euros, then changing your mind to the tune of 15.000 Euros can put a rather big dent into your finances.

Black money / White money?

Paying part of the price of a property in "black" money was quite common in Spain until the government changed the law about it. It is illegal now. Mainly it was done to "launder" black money and to avoid having to pay the full percentage of the purchase tax. It is illegal now, so don't do it.

Always look at the bright side of life!

Many expatriots are happy here in Spain and the author of this article certainly too. The weather is still more pleasant here even if some winters make you wish you had bought some central heating. But all happy expatriots have two things in common: They have learnt to speak Spanish and have got good Spanish neighbours and friends. They learn about the differences in the Spanish legal system and Spanish every day life. To try and put some sort of "order" into this country is certainly of no use.

But take heart! Property is very cheap these days. Stand up for yourself, but also learn about the different way of life in Spain. Give it a light-hearted smile every so often as so many do here! "MaƱana" is another day and why not?

If you have any further experiences on this subject, I would be glad if you left me a comment on this in the comment box below, or sign up with Wikinut.com and write an article about it. I'm sure I won't be the only one who will read and appreciate your experiences.

Thanks for calling in!

Related Link:

I've just written a new blog that describes the two mountain chalets that my neighbours wish to sell. I mean how often do you get a chance do speak to the neighbour first?

Mountain Chalet in Spain for Sale

My neighbours live about 500 m away from our little homestead and we really love them. There are fiestas and paellas and general goodwill here in the mountains - nice!

Tags

Apartments, Banks, Buyer, Electricity, Gas, Houses, Low Cost, Market, Mortgage, Property, Real Estate, Spain, Telephone, Waste Water, Water

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author avatar chrysolite
From writing to blogging it's only a small step:

http://whatdoesaremotewriterdo.blogspot.com

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