Buyer’s Guide to Purchasing your Chosen Property
Once you have decided on the property you wish to purchase GJ Estates will negotiate on your behalf to achieve the best price for you. Once the price has been agreed as a general rule a €1,000 reservation fee will be required to remove the property from the market and allow time for legal searches to be carried out.
With regards to purchase cost we always advise clients that they should allow 10% of the purchase price to cover all the purchase costs. This includes 6.5% ITP Tax (Impuestos sobre Transmisiones Patrimonials) equivalent of Stamp Duty in the UK, Notarial Costs, Land registry and property registration fees, legal fees, (if required), various minor taxes and all paperwork costs.
Obtaining a NIE Number:
You will be required to obtain an NIE number, (Número de Identificación de Extranjeros), which for UK clients is the equivalent to National Insurance number & to Irish clients it the equivalent to a PPS number in Ireland. This document is obligatory for all non-residents who wish to purchase a property in Spain and must be obtained before taking title otherwise completion will not take place. We will help you with this, so no need for concern.
GJ Estates conveyancing department will obtain the Nota Simple (local land registry search for the property) and inspect the results of the Nota Simple for the property you wish to buy. The search results will confirm whether everything is in order, for instance the vendors are indeed the lawful owners and that there are no charges, encumbrances or legal problems with the property. Furthermore, all utilities will be checked and a local town hall search will highlight any future town hall plans for the surrounding area and ensure all taxes have been paid.
Contract & Deposit:
On confirmation of the search results and everything is legally in order, a private sale and purchase contract will be drawn up between purchaser and vendor. This states the conditions of the transaction, identifies the property and all relevant parties, as well as the agreed date for completion.
Once the contract is drafted and both parties are happy to sign and enter into a contract, the purchaser is then obliged to transfer 10% of the purchase price to GJ Estates client account, which is regulated by the Spanish government. Once the contract is signed, if the purchaser withdraws from the sale, the deposit will be forfeited. If the vendors fail to sell after this, they will be forced to repay the purchaser their 10% deposit back, plus the same amount again as compensation – a system designed to deter gazumping.
Cash, Finance and Mortgages:
If you are a cash purchaser or have pre-arranged finance, you will have a distinct negotiating advantage when it comes to being able to purchase your desired property.
However, if you are purchasing with a mortgage, GJ Estates will liaise with your bank in order to make sure the bank can deal with your application as quickly as possible. For a list of requirements for a mortgage in Lanzarote we can supply you with a criteria list from the banks.
On the agreed completion day, the purchase completion is carried out in the official office of the Notary, with the assistance of the court appointed sworn translator, and the outstanding amount will be paid over to the vendor. However, before this the notary will perform its own independent searches verifying an up-to-date result that all is in order with the purchase.
The notary requires all the original documentation relating to the identification of both the vendor and purchaser and all property documents and proof of tax payments.
After signing, GJ Estates will complete your paperwork by paying your stamp duty and registering your title deed. The entire process from signing in the notary’s office to receiving your registered deed takes between 4-6 weeks, but you are entitled to receive a Copia Simple (shorter pre-land registry deed) within three days of signing.
Utility bills will be transferred to your name and direct debits will be set up to pay future bills. The same applies for the community charge if your property is on a complex with a community of owners.
Once you own your new property you may still need our assistance. We provide a dedicated after-sales service and will be delighted to help you to make sure your purchase remains a a happy hassle free one. See our Services section for full details.