The following information will be useful when you are buying a property in Spain. It clears up many aspects of the purchase process and will help you decide how, when and where you wish to go about things. This information is a general overview about buying a property in Spain so remember every purchase is different and each person's situation varies. You can also download this document in Microsoft Word format. • Sales Price and Final Price • New and Resale properties • Stage Payments for new build property • Payment and Purchase of a Resale (second hand or used property) • Banks and Mortgages in Spain • Price and Quality • Visiting the Area and viewing • After sales Service Sales Price and Final Price The sales price is the price given when looking for a property and which does not include VAT, Notary or deed costs. After adding on VAT, Notary fees, electricity and water connection and fiscal numbers, we add on a figure which is about 9-10% on top of the sales price. Example of Breakdown of costs Property sales price: 100,000 € VAT 7% : 7,000 € Notary fees 2% : 2,000 € Elec/ Water contracts : 300 € Fiscal Number (NIE) : 100 € Final Price 109,400 € New and Resale properties There are many differences between resale property and new property. The basic difference is that you don't have to wait for it to be built but you do not get a builders 10 year warranty as you do in new build property. Due to waiting times, resales are becoming a scarce and much demanded product, increasing their price and making it very difficult to find a value for money property. Added to this, most house owners do not value their property objectively, inflating the price of the property without taking into consideration what the market is willing to pay for a certain type of property. The main advantage with new property is that it is usually better priced (not cheaper) and changes and modifications can be made to the property. A new property can be built to suit your requirements and there is always somebody to submit your doubts or questions to. Added to this, you also have the flexibility that the stage payments allow. Stage Payments for new build property 1st PAYMENT: The standard payment form for new property is a deposit. - The quantity usually depends on the price of the property. It would vary between € 2,000 and € 3,000. This is non-refundable. 2nd PAYMENT: After 3-4 weeks a first payment of 20-30% of the sales price is paid. 4th PAYMENT: 3-6 months later a further 20%-30% will be due. 5th PAYMENT: This payment is usually carried out when buying a villa and is not always necessary. It is paid around 2-3 months before completion. 6th PAYMENT: The final payment is made at the handing over of the property with the signing of the deeds. Payment and Purchase of a Resale (second hand or used property) In the case of resale property the process is simple: 1) A deposit is put on the house to hold it and a date is agreed upon to sign the deeds. A month is generally considered enough time for the deeds to be signed. 2) The full amount of the price of the property is paid at the signing of the deeds Banks and Mortgages in Spain It is becoming more and more frequent for people wishing to acquire a property in Spain to consider taking out a mortgage, whether it be to finance a large portion of the house or just a top up amount to get a better property. Currently, all banks offer up to 60% of the total purchase price including the VAT of a property but some will give a higher percentage if the bank's appraiser gives the property a higher value. Many real estate agents will say that the bank will offer a higher percentage although they do not state that the percentage is on the sales price (without VAT or Notary costs) not the full price (with VAT and Notary costs) after taxes have been included. In the case of new properties, the bank will only value a house once it has been built, whilst the builder expects 50% of the price of the house to be paid before completion. So if you are thinking of getting a mortgage to buy a new property, make sure you have at least 50% of the asking price. In the case of resale properties, the appraiser could give you a valuation and you would know how much you could get. Please remember that only the bank can say how much money they are willing to lend and not the builder nor a real estate agent. We have an excellent working relationship with Deutsche Bank, Bancaja, Sol Bank (NatWest), Cam Bank which have always given our clients favourable conditions with excellent service which has always reassured us when we put our clients in their hands. Price and Quality An important point to make when buying a property in Spain is that the price reflects quality, size and location. No other indicator gives as much accurate information about the quality of the property as the price. It will indicate which is the best property suited to your needs and to your budget, whether it be a holiday home, residential or solely for investment purposes. Visiting the Area and viewing Unlike larger real estate groups, Activa offers a one to one service when showing properties and also properties built by smaller, experienced builders who include a higher degree of materials and quality, often shunned by the big companies because it is not a suitable product for large inspection visits. After sales Service One of the most important parts of any sale is to make sure that the firm selling you the property has a professional and qualified after sales team. This is the most essential part of any reliable and qualified firm. Our excellent after sales department can offer you legal, fiscal and financial advice and services so you don't have to worry about a thing. All our staff are bilingual and multilingual so you will have no trouble communicating any queries you may have. To conclude, we would like to add that this is just a general informative description of how the sales process works in Spain. Every situation is different and this is something that Activa International knows well as we have experienced every single one. We take pride in being discrete but at the same time well known within the building and real estate sector. There is no secret to this, just dedication and know how of what and how we are selling. All of our staff has had ample experience in the Spanish business world as well in Europe. Add to this a comprehensive understanding of Spanish property law, design and finances and you will find that Activa International has one of the most professional and qualified team on the Costa Blanca. If you have any questions about buying property in Spain or anything else relating to this information, do not hesitate to get in touch with us.