Spanish house buying - the process & pitfalls
The process of buying a property in Spain can be beautiful, but also hectic. Pedro is happy to explain the steps in the process and the pitfalls you can avoid at each step.
You have come across a beautiful property during an unexpected house hunt on your Spanish holiday. A property entirely to your taste, with the expected garden and pool. Great! You can't hide your enthusiasm from the estate agent and seller. You want this house!
A hectic buying process in Spain
The realisation that you actually still have a lot to arrange and research comes only when you are back home. All sorts of questions run through your head. Do I qualify for financing? Is it a nice neighbourhood to stay in?
Straight to work then?
However, there is not much time to think. After just one hour, you will already receive the reservation contract from the estate agent to sign and make a down payment of €3,000. In doing so, it states that the selling party also has another buyer. This buyer has a lower offer than you, so you have first choice.
You must then decide quickly, is written in the email. What could go wrong? Surely that mortgage in Spain will come through? This house fulfils all my wishes and I will probably never come across another house like this again! That same evening, the contract is signed and sent and the deposit transferred. This can't go wrong anymore!
Quick buy = expensive buy
Five months later, you had hoped to make a better consideration at the time. Applying for funding turns out not to be the same as in the Netherlands. You are not used to the mañana mañana culture as a Dutchman, which has caused a lot of frustration. The selling party is not satisfied either, they do send an email every other day asking if they can continue....
Don't you dare make the down payment of 10% because what if you don't get that funding anyway?
Thankfully, after 6 weeks, your application has finally been approved. Once again, you can breathe a sigh of relief. So the payment of 10% is quickly made, because what if the house is soon gone? Now only the valuation remains and then you can enjoy your Spanish home.
Sad you look at the state of affairs 3 weeks later. The valuation report has been delivered. It turns out that only half the square metres of the property are registered in the Spanish land registry. As a result, the valuation is based on half the actual value, making the appraisal value even 20% less than the purchase price.
Since in Spain often no reservation of financing is included, you won't see your deposit back either
What does this mean for your mortgage?
A Spanish bank always gives financing based on the lowest value of the property, which makes your mortgage look completely different. You suddenly have to put in a lot more equity... The plug has to be pulled.
Since Spain often does not include a reservation of financing, you won't see your deposit back either.
How do you do prepare?
Situations like this are all too common. Blinded by the Spanish sunshine, people enter the Spanish buying process unprepared. Putting unwanted pressure on the buyer to sign a contract is very common in Spain and also regularly by Dutch-speaking estate agents, resulting in unpleasant situations.
Good preparation is worth its weight in gold!
Don't be naive and make sure you have a good preparation and only then make the move to buy. This avoids a lot of frustration, time and unnecessary costs.
Even without a property, you can already get a lot of security from a Spanish bank in terms of financing/mortgage. One possibility is a mortgage indication via holapedro. Keep in mind that a mortgage is always based on your financial situation as well as the collateral. A mortgage is not final in Spain until it is executed.
In addition, make sure the right people help you buy your Spanish property. Get good advice from experts. A lawyer, for example, can be well worth his fee for his legal support.
Putting unwanted pressure on the buyer to sign a contract is very common in Spain
Prepare with our online help
Want to avoid a slow and complicated application process at a Spanish bank? Then arrange your mortgage yourself through holapedro. We will arrange the following for you:
- Quick Chat with Pedro for all your purchasing questions in Spain
- Whitepapers and guides to arrange your own mortgage
- Smart online calculation tools
- Comprehensive bespoke indications & reports for your Spanish purchase
- Connections to the right partners for your purchase and financing
Getting started with your home purchase in Spain?
Let Pedro help you with your questions regarding your Spanish purchase. Better asked than never known. And doesn't Pedro come up with anything? Then the holapedro team will be happy to help you.
Should I sign that sales contract already?
Want to know more about the buying process in Spain or Portugal?
Purchase costs when buying a property in Spain
As in the Netherlands, buying a house in Spain involves costs. But buyer's costs are quite a bit higher in Spain. You can read more about purchase costs in Spain in this article!
