Buying a property can be daunting, especially if you are planning to do so in a foreign country. At Lucas Fox, we receive a huge amount of enquiries about the process of buying a property in Spain. It’s not as complicated as you might think, especially if you do your research and plan well in advance. But it helps to be prepared! There are numerous useful tips to ensure that your path to being a homeowner in Spain is a smooth one, so we have compiled a step-by-step guide to what you need to think about before you buy your Spanish home – what to look out for, the potential pitfalls and how to ultimately ensure that you have peace of mind in the knowledge that you have done everything possible to avoid disappointment along the way. Let’s go!
Decide where you want to buy a property
If you are unfamiliar with Spain but have good enough knowledge of the country via friends who have relocated, TV programmes, guides or magazines, you will probably have a fairly good idea about where you would like to start looking. Spain offers diversity and beauty in abundance, boasting vibrant, cosmopolitan cities, laid-back villages, stunning verdant inland areas and arguably some of the world’s most beautiful coastal regions. You first need to think about whether you would like to be within a city, on the coast or in a residential area, many of which have easy access to city centres.
Some other questions you need to ask yourself before you buy could be: do you want to take on the challenge of living in an entirely new culture where almost no-one speaks your language or would you prefer having other overseas residents nearby? Do you want some land to enjoy a more rural lifestyle? If so, are you ready for those sometimes tough challenges (rural Spain has only 95 people per square kilometre so life inland can be very isolating)? If you are buying in retirement, do you have a plan for when you become less agile? How do you cope with extreme heat – the summers in Spain can exceed 40 degrees centigrade during July and August? Do you want to learn Spanish? Will you spend long enough in Spain to maintain your own garden and pool? Will you want to rent out the property?
These are all important questions and will determine the sort of environment and area you want to live in.
Take a look at this vlog from Lucas Fox co-founder Alexander Vaughan about the next steps after once you have decided to buy in Spain.
Decide what property you can afford
One of the first mistakes many people make after having decided to buy a property in Spain is not having researched the costs involved beforehand. At Lucas Fox we suggest adding between 10% and 13% onto the purchase price to include taxes, notary fees, solicitors fees, survey costs plus any miscellaneous costs such as translations. This figure varies on the region you buy in (Madrid for example has a more competitive tax rate) and the type of property you are purchasing (ie new build or resale) but it is always prudent to overestimate rather than underestimate the costs involved. For a full breakdown of the costs please take a look at the Lucas Fox guide to buying property in Spain.
If you are taking out a mortgage on a property, it is essential that you do your research beforehand. The mortgage market is a competitive one and if you go directly to a lender, they will inevitably try to persuade you that they offer the very best package. If you go via a mortgage broker however, your chances of finding what is right for you are greatly increased as they continually scour the market to find the best deals around. They will also be able to advise on whether a fixed or variable rate is preferable, about set up charges and break clauses etc.
For more detailed advice about getting a mortgage in Spain take a look at this interview with Mortgage Direct.
Am I buying at the right time?
The Spanish property market is at its healthiest in years, Since the start of the recession in 2008, property prices started to fall and continued to do so until midway through 2014. The recovery began slowly, initially in the prime areas of the major cities but since the start of 2017, there has been a steady rhythm of price increases across the whole of Spain including coastal and inland areas. This growth, alongside a strong Spanish economy, competitive mortgage packages and low interest rates all combine to make it an ideal time for investing in Spanish bricks and mortar. At Lucas Fox, as well as being able to give our own take on the property landscape, we always advise buyers to read as much about market trends and forecasts as possible. For detailed information on the Spanish property market in Spain take a look at the Lucas Fox Property Market Trends in Spain section.
How to start your property search
There are numerous ways to look for properties for sale in Spain but looking online is probably your best starting point. Many buyers begin by looking at Spanish property portals such as idealista and fotocasa. Portals are essentially online magazines where real estate agents pay to list their homes. The important thing to remember about portals is that the properties listed are constantly updated, whereas this is not always the case when searching for homes in brochures or magazines.
By browsing through portals you will get an idea of the types of properties available, the price and the location. This should arm you with enough information to approach agencies.
It goes without saying (but we will say it anyway!) that it is essential to find a real estate agency that has an excellent reputation. There are several ways of doing this. Firstly, ensure that the agency belongs to the Spanish regulatory body known as the API (Agentes de la Propiedad Inmobiliaria), take a look at their track record, read their social media and google reviews and, if you can, speak to anyone who has used the agency to get their opinion. A local, trained and experienced agent should be every home buyer’s best friend and don’t forget that having an agent that speaks your own language is a plus, so check that out too!
View this report by Lucas Fox Partner Stephen Lahiri on why choosing a reputable real estate agency in Spain is more important than ever.
So that is where we will leave it – in the hands of the experts. They will be able to offer guidance on all aspects of the area in which you want to buy, the property itself and of course the buying processes. Many agents will stay in touch and help buyers long after the sale – this is a specialised market where recommendation via word of mouth goes a long way!