Purchase procedure and costs
Having decided upon the property you wish to buy, you will want to know how to go from there. First of all, a purchase contract is prepared in which the price and method of payment are established. Once signed, this private contract is legally binding and the price cannot be altered. The following is a guideline as to the method of payment and additional costs and considerations involved in the purchase:
In most cases the following method of payment is used:
· € 3.000,- downpayment upon signature of contract
· 10% - 20% of purchase price within 7-10 days
· The balance within one or two months, upon transfer of the title deeds at the Notary's.
Some properties are more flexible than others, but this is the general rule. Terms are more readily negotiable with resale properties. If buying a property under construction, you will normally be required to make stage payments.
Additional Costs and Taxes
As a guideline, you need to allow approximately 12% of the purchase price in the case of resales and 14% for new-build properties, and slightly more if you are taking out a mortgage.
Mortgages can generally be obtained up to 60% of the purchase price and for periods up to 30 years, as long as you can provide us with the necessary documentation, i.e.:
· Pay slips for the last 3 months
· Latest income tax declaration
· Credit history
· Any other relevant proof of income (pension statements, etc.)
· Recent bank account statements
· List of assets
So bring copies with you, just in case! There are setting-up costs involved in taking out a mortgage, so you must account for this too. On the other hand, the penalty for cancellation or part cancellation is minimal - never more than 1%.
Your specific case will be treated in depth with you, during your visit, so that there are no doubts left in your mind.
On the left hand side of each listed property you will find a mortgage calculator so that you can see what your monthly instalment will be, according to the amount, number of years and interest rate.The interest rate may vary slightly from one bank to another and in the case of bank repossessions it will usually be lower than the normal rate.
Running costs are much lower in Spain than Northern Europe. Water & electricity are metered, so how much you spend depends on how much you use, but there is a minimum standard charge. An example for an average 2 bedroom property is as follows:
· Municipal taxes (rates) € 260,-
· Community fees € 480,-
· Water € 220,-
· Electricity € 750,-
· House & contents insurance € 220,-
· TOTAL: € 1.930,-
Please note that the figures given above are approximate and may fluctuate slightly, but they will give you a fairly accurate guideline.