To buy a home it being a holiday home or a permanent home is a big financial commitment. Unfortunately it is not uncommon that things go wrong in the process which so easily could have been avoided with some planning.
There are numerous estate agents in Spain. Find an Agent that you trust. It is important to do this before you go rushing off looking for homes or you may end up with no representation. This is especially important if you are buying a property off plan. An off plan is a property which is not yet built and which may not even have planning permission in place.
Before you even look for a property begin the process by getting a mortgage in principal from a trusted Mortgage lender/ broker. Do this first. With a mortgage approved it will significantly strengthen your offer when you find a property.
Before you start looking for the property arrange for a solicitor to represent you. He/ she will be needed at the very moment you decide to put in an offer. When you have made an offer and it has been accepted you need to put down a deposit. Unfortunately this is where a lot of people go wrong. If you go it alone it is recommended that you have at least the wording “subject to mortgage and valuation” in the purchase contract. If you are applying for finance in order to buy the property most faults, such as the legality of the build and possible local (council) issues are likely to be discovered. That’s why it’s ALWAYS recommended to have finance on the property even if you don’t need it. If you haven’t prepared the finance and if you haven’t protected yourself by stating the wording mentioned above you can lose your deposit if you decide not to proceed for whatever reason.
It is always a greater risk when you buy an off plan. However the reward is greater in the return on your investment – appreciation in value since the cost of an off plan is lower than a property which is constructed and registered. An off plan property doesn’t in fact exist, so no search can be made on the particular property. It is extremely important you do some market research of the area, developer and of course agent. If you buy an off plan which has not even got planning permission it is advisable you research nearby developments and the local area in case there have been problems earlier. It has also happened that a constructor shows the plan to a prospective buyer, however once the property is registered in fact not all square metres shown are actually registered. This of course devalues the property.
Just ask yourself if you would sign a paper and commit yourself in the same way if you were in your home country, where you after all speak the language. Probably not. So why do it in Spain where the laws are different? Bottom line – don’t sign on the bottom line unless you know exactly what you are doing and you have a legal representative.
If you need any advice we recommend you contact Orange Finance. They are very experienced in these matters and the advice will be invaluable.
Article by Orange Finance
http://www.orangefinance.eu.com/