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10 steps to buy property in Spain
1. Hire an licensed agent
It might sound obvious, but it’s really important to narrow down your search. Spain is a huge country and property there is just as diverse as its landscape. Do you want a villa by the sea? A modern apartment in one of Spain’s amazing cities? Or property to convert in an inland village?
Your best bet is to visit the areas you’re thinking about and get a feel for the place. You’ll be able to see local amenities, how well-connected the place is and what the community is like.
- Research Areas: Familiarize yourself with the regions you’re interested in (e.g., Costa del Sol, Barcelona, Madrid).
- Property Types: Understand the types of properties available (villas, apartments, country houses).
- Price Ranges: Compare property prices in different areas, as prices vary significantly between regions.
2. Define your budget and know the extra costs
Before you start looking, set yourself a budget based on what you can afford. Remember to include 12-15% for tax (this differs if it’s a new build or a second-hand property). It’s also worth checking with your estate agent, if you use one, as to whether the buyer or seller pays the estate agent fees, which are around 3-5%.
Regardless of where you buy property, there are always some unexpected expenses so it’s best to factor these in too.
It’s at this point that you should be contacting banks if you’re looking to buy property in Spain with a mortgage.
3. Start the search and plan a trip
Most foreigners looking to buy property in Spain do so through an estate agent. Agents know the market better than anyone and can guide you through the process. Many are bilingual, so it’s important to find the right agent and plan a trip to Spain to explore property options.
Demand is high, so some listings you receive may no longer be available when you arrive, but they offer a good indication of what you can get within your budget.
4. Apply for a NIE
A NIE, or Número de Identidad de Extranjero, is an identity document that all foreigners need to buy property in Spain. There are some online companies and in-person agencies that can help you with the process or you can fill out the EX-15 Application form online, and make an appointment at your local police station or Directorate-General for the Police in the place you wish to buy property. You can also apply for NIE at the Spanish Embassy if you have one where you live. NIE can be as quick as issued the same day but for most it takes 1-2 weeks.
This is one of those steps that you may wish to do a little later on, depending on how intensively you’re going to be looking at properties. The NIE is only valid a property purchase for 3 months, so, if you don’t find a property within that time, you’ll need to apply for it to be renewed. Getting another appointment may be tricky and may prolong the whole process. Note that your NIE does no expire, the document just has to issued be within 3 months when you purchase a property.
However, if you do find your dream property, you’ll need to have a NIE to make an offer on it. So you should keep that in mind too!
5. Signing The Offer Contract with The Estate Agent and Negotiating
Let’s imagine you’re finding your property with an estate agent. Once you’ve decided to put an offer in, you’ll need to sign the offer contract with the estate agent. This is a document that formally states your offer that the estate agent will make to the seller.
At this point, it’s common to make a transfer to the estate agent (usually around €2,000) which they’ll transfer back if the offer is not accepted. You can also put it towards their fees if you choose to. Even though you’ve signed your offer, you can still negotiate with the seller
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6. Getting a Survey and a Nota Simple
This may be something you feel more comfortable doing before you put an offer in. And that’s totally understandable. However, Spaniards very rarely carry out surveys on properties they’re thinking of buying (which definitely differs from other countries) and this means that the process is often much quicker.
If something comes up in the survey that makes the property a bad investment, you can still remove your offer without losing any money (but at least you had started the process and didn’t get pipped to post by someone else because you were waiting for the survey results).
An essential part of buying any property in Spain is the Nota Simple. If there is any debt tied to a property, it’s transferred to the new owner when it’s sold. The Nota Simple shows up any debts so you can be sure you’re buying a debt-free property.
7. Signing The Contrato de Arras
The Arras Contract is one of the most important Spanish property contracts you’ll sign. Both parties sign the contract and it clearly lays out the terms of the sale. Things such as the property’s description, completion date, penalties and fines, the exact price and any specific agreements should be noted.
You’ll get the contract a couple of days before the date you’ll sign it so you and your legal representative can go through it carefully.
When you sign it, you’ll be asked to transfer a down payment, which is usually 10% of the property. In some cases, you may be asked to pay this amount directly to the seller or the estate agent (which is very common in Spain). We, however, would recommend transferring it to a safeguarded account.
Even though it’s a large amount of money upfront, it’s there to keep both the seller and buyer safe. If the buyer pulls out, they lose their 10%. But, if the seller pulls out, they have to pay double back to the buyer
8. Organising a Mortgage and Signing the FEIN
Part of the Arras Contract is agreeing on the date for completion. In many cases, this is 2 months from the date of signing the Arras which gives you time to finalise your mortgage. Your bank will probably require you to have an appraisal of the property to find out its actual value, and they will then give you the corresponding mortgage.
When you accept the terms of the mortgage, you will be asked to sign a FEIN (Ficha Europea de Información Normalizada). This document ensures that you fully understand all of the terms and conditions of the mortgage.
It’s common to sign this online and you then have to wait 10 days by law before signing the purchase agreement. Before you sign the purchase agreement, you will need to go to the notary to go through the FEIN so that they can be sure you fully understand it.
9. Signing the Deeds!
Both parties need to sign the deeds in front of a public notary. Your lawyer should also check through everything before you sign it. This is when you transfer the rest of the funds and receive the keys to your new property!
10. Registration of Property
Once the property becomes yours, it’s important to register it at the Property Registry (Registro de la Propiedad). Most Notaries will arrange for this but your estate agent or lawyer might manage this, and they may even set up utility supplies for you too.