10 tips to Avoiding Pitfalls when Buying Property in Spain

Are you looking to buy a Property in Spain

1. Be clear on what you want from the property: Know beforehand what the purpose of purchasing in Spain is: buy to let or buy to live. Are you buying to make your money from renting out the property or by selling it or just to live in? Is this region and property somewhere that other people will want to be in the future?
2. Choose accurately the proper place. Visit the country at least once having already read up, researched and refined your criteria. Far too many people go on a wing and a prayer and end up disappointed or buying a pig in the poke. Check the weather conditions in the area and the future expansion of the place. Remember, Spain has a lot of places where the sun does not shine so bright.
3. The price. Study the offers in the area. By investing in cheap Spanish properties located inland rather than in the vicinity of the coast, you will be able to save lots of money and be also financially rewarded by the Spanish government with various facilities such as tax breaks and even financial bonuses for investments of larger proportions.
4. Hire a lawyer used to deal with Spaniards. Your lawyer will have to investigate if all the fees and taxes are paid. The contract of sales has to be in both languages. Don't sign a single scrap of paper without your lawyers approval.
5. Be aware of the law changes that can affect your investment or foresee a rise in taxes. In Spain most of the beachfront houses are forbidden and those built are declared illegal. Recently, a new bill presented in the Congress has improved the mortgage conditions.
6. The mortgage loan. Usually, the Spanish buyers can finance up to the 80% of the appraised value of the home over a maximum period of 40 years if they are up to 35 years old. However, as a foreigner you can normally only get up to the 70% of the value. Subrogation from the credit of the builder is not always the most economical choice. Check out more than one possibility of the wide range of banks.
7. Estimate a realistic budget. Always take the price of the property and add in an immediate 10% in other spending as the followings:
a. Sales tax: In Spain the tax of a new house is 7% and a 6% if it is a second-hand house.
b. Commission of the real estate agent.
c. Legal and processing fees: Up to the 2% of the value of your house.
d. Contingency money: Unforeseen expenses.
8. If your house is not built yet when you buy it, you are entitled to ask for a bank guarantee to get your money back should the construction wouldn’t be finished.
9. After-sales guarantee policy. If it’s a new house, you are entitled to engage qualified professionals to physically inspect the property to see if there are any problems with finishes. If you are not satisfied with the report outcome, you have one year guarantee for all the imperfections related with finishing touches such as timber rot, electrical installations and the painting.
Also, it’s stipulated three years for imperfections that affected the habitability. And ten years for all those faults in the building structure.
10. After-Sales Services. Watch out carefully the services included by some agents such as cleaning and maintenance of the house. Is it a realistic fee? You might need to deal with the Spanish services: telephone; electricity… Get the money back through renting the house.

Article Source: http://www.real-estate-article-directory.com

www.oppspain.com is a company that is specialised in selling off plan properties in Spain.

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