Are You Ready To Buy A Property In Mallorca?
Just as buying property in Scotland differs in process and legalities from buying in England so it differs in Spain.
This does not mean that it is in anyway unsafe as long as you use a reputable agent and lawyer. There are a few horror stories of people handing over money in a bar to someone with no paperwork or office, you wouldn’t do it at home so why do it here? That said do not expect everything to work the same as in England, this is Spain and the law, banks and process here is different.
If you find a property you like, bear in mind that the cost of buying is roughly 10% more than the price of the property you find:-
- 7% tax is payable to the government for anyone buying here
- 1% is usually the charge for legal services
- Further charges are made for the Notary, property registration, mortgage fees etc.
The process once you have found your property is as follows:-
Open a Spanish bank account, this can be done with a very small sum (100€), and appoint an English speaking local lawyer. Your lawyer carries out a title search, and advises you on all aspects of the purchase. He can also obtain an NIE number for you - all owners of property in Spain need an NIE number, which issued by the district police.
If you need a mortgage or other finance there are plenty of banks who will lend to English buyers - we even have Barclays and Halifax here on the island. The estate agent will normally have one or two banks with whom they deal on a regular basis. Interest only mortgages are now available in Spain or repayment mortgages which are the norm. Banks will normally lend up to 70% of the valuation of the property.
NOTE: The valuation is normally 20-30% higher than the property price you are paying.
An option contract is the first step; this is a contract between the vendor and the buyer stating that the buyer will buy the property for the agreed price by an agreed date and that the vendor will sell the property for the agreed price by the agreed date. At this stage a 10% deposit is normally required by the buyer to secure the property.
If the buyer pulls out after this contract is signed he will lose his 10% deposit, if the seller pulls out he pays the buyer 1 x the deposit and the deposit itself is returned to the buyer. It is important that this deposit is paid to a third party i.e. a lawyer or an agent and not directly to the vendor.
It is possible sometimes, mostly on new developments, to put a reserve deposit down. This is used where buyers need to return to England prior to signing an option contract and wish to ensure that the property is held for them for a short period of time before returning. This deposit is normally €3000 and can reserve the property for up to 1 month.
The final stage is an appointment with the Notary to sign the deeds (escritura) and hand over the money. Usually all parties involved attend this appointment, the buyer, the vendor, the bank, the lawyer and the estate agent.
Now you have all of the facts ask again:
“Are you ready to buy a property in Mallorca?”
If the answer is yes then South East Mallorca Property are here to help you.