Spain is a popular tourist destination and people have an idea of what the ideal life in Spain should be. Buying properties in the country therefore adds to the idea that everything will be perfect once the purchase is made. However, a lot can go wrong if one is not prepared for the transaction.
There are many potential mistakes one can make but luckily all of them are avoidable. As a foreign buyer, there is obviously an expectation of buying the ideal home in a new country. In this article we will talk about the common pitfalls of choosing Spain as a property investment location. We will also try to tell you how to avoid them to make the purchase as convenient as possible.
Not Knowing The Market
Just because you are aware of the real estate market in your home country does not mean that every country will operate on the same rules. Proper research and planning before you even begin with the process is essential. This means that one would get to know the risks, trends, and requirements for the process.
Knowing the market is important because the situations vary from city to city. After the basic research of the market and trends is done, it is time to research the specific property you are interested in. If you have shortlisted your houses you can research their background separately and list how it benefits you as a buyer.
Look into the legal construction of the house and also whether it needs any renovation or repair work. Inke Shani kind of renovation and repair is an order check to see if the owner has building licences. You cannot make significant modifications to the property without an adequate building licence. Even if the modifications are allowed, there might be certain restrictions depending on the property.
Get to know about these restrictions and compare them with other properties you are considering. All of the other related questions can be answered by a professional so take the help of an architect who will be working closely with you once you purchase a property.
Not Considering Registration
As a foreign buyer there are certain registration requirements while acquiring a property in Spain. Registration processes need to be complete before even starting the process of house hunting anywhere in the country. The NIE number is extremely important for purchasing property in the country.
This number is used for any legal conveyancing within the borders for acquiring property or land as a foreign resident. The second order of business would be to set up a bank account with a local bank in Spain. All of the fees related to acquiring a property, making the purchase, and related transactions will be done through this bank account.
If mortgages are to be set up they will be deducted from this bank account rather than the one in the home country. Credentials are very fine. The bank account will be set up but it will only be done after the NIE registration is complete.
Not Considering All the Costs
Imagine wanting to buy a property and then being held back because of insufficient funds. There are very specific costs involved with the entire process and everything needs to be done by the book to make the purchase a success. Contact javea.properties to know more about the budgeting and costs of real estate buying.
The exact cost features taxes, land registry fees, cost of hiring a real estate agent, notary fees, and the price for getting legal work done. Different types of properties will have different taxes associated with them so the architecture and location matters too. There are multiple costs and several variations for all of them depending on a particular property of interest.
Not Knowing About Future Fees
This is an important aspect of researching before going house hunting. After a purchase is complete there is a certain level of ongoing costs that need to be taken care of. Future fees typically include renovation costs, utility bills, property tax, non resident tax, home insurance and mortgage. Proper planning is essential so that one has enough funds in their Spanish bank account to make all the payments on time.
Foreign buyers often make mistakes with budgeting and do not keep track of monthly outgoings. If a buyer does not account for all of these extra costs month to month they will eventually feel financially unstable. So before buying make sure that the budget includes the price of the property as well as the means of sustaining it over the years.
Not Getting What The Contract Says
We are not talking about a language barrier which will come with a property contract. The contract of the real estate purchase will have technical terms jargon that is specifically related to the Spanish rules and regulations. It may or may not resonate with the rules of your home country which can make matters complicated. If any condition of the contract is not fulfilled it can lead to serious legal consequences.
A foreign resident has to be especially careful because they are engaging in a purchasing process which is not familiar to them. Usually, the legal representative will tell you all of the details and help out with the entire process from acquisition to conveyancing. It is not difficult to find the right professionals but make sure to choose wisely so that the communication channel between the seller and the buyer always remains open. Only pick a little thing which has your back while formulating contracts.
The potential pitfalls of buying a property in Spain are largely related to being unaware of the process and regulations. Be very careful about how the market works and what the registration rules are. Budgeting and costs of different services are also dependent on the type of property and geographical location. Do not hesitate to take the help of a legal representative to read out the contracts.