When it comes to selling your Spanish property, the main thing to consider is timing. Spain has a cyclical property market and you need to ensure that you are selling at a time when the market value of your property is high. If the property market is not high, then you have to be realistic about the selling price.
It is advisable to remain in Spain during the sale period, at least until the signing of the promissory contract, to ensure things progress satisfactorily. You will also need to consider the capital gains tax implications of selling up. You can find out how much capital gains tax could be due by consulting your tax office.
The seller also has to comply with the legally stipulated notification requirements toward those having rights of pre-emption.
Vendors must ensure they possess relevant property ownership documents, including the escritura, and make sure they have paid any outstanding IBI tax or utility bills on their property.
The seller is obliged to sell the property free from defects. The seller is liable for defects, which reduce the value of the property, or prevent the use of the property for a particular purpose. If the property lacks a particular characteristic which the vendor claimed it possessed he/she is liable.
The process of selling property in Spain
1. Market research
Before you do anything, check out the market. Unless you’re forced to sell, steer clear of slumps when prices are depressed and perhaps consider letting out long-term until the market recovers as an alternative.
2. Preparing your house for sale
It is worth doing some research through consulting with local agents to get advice on how to prepare your home to increase its attractiveness to prospective buyers.
3. Marketing your property
Once you have decided it’s the right time to sell and are confident your property is in a condition which will appeal to prospective buyers, you are ready to go to market. The normal means of marketing a property in Spain is via an estate agent who can also value your property. Alhambra Villas provide a free valuation service.
4. Organising legal representation
There are three legal professionals you will probably deal with: A public notary (notario): Unlike traditional lawyers, Spanish notaries (notarios) are neutral government legal representatives who act as witnesses to and registrars of property transactions. Under Spanish law, only deeds of sale (escritura de compraventa) witnessed and authorized by a notario can be registered at the land registry. He or she will prepare all the appropriate paperwork and ensure this has been filled out correctly according to the wishes of both parties. The notario also has a responsibility to make sure the appropriate property taxes are paid on time. Finding a notario is relatively straightforward. The local phone book will have names and numbers, and the estate agent will be able to put you in contact with the notarios they use regularly. A reputable English-speaking Spanish solicitor (abogado):
5. Negotiating a reservation contract
Once you’ve found a potential buyer and have organised legal representation, you are ready to start negotiating over price. You should be willing to walk away from the deal if you don’t secure your minimum requirements. If at this time you have already identified alternative buyers that you would be equally happy to sell to, this will be easier to do.
Once you are happy with the price you normally have the option of accepting a small reservation fee from your prospective buyer for the property to be taken off the market while your lawyer draws up the private purchase contract. This is an informal agreement and will not commit your prospective buyer to purchasing the property. However, if your prospective buyer then reneges on their expressed interest in buying, he/she will normally forfeit their reservation fee.
6. Signing a preliminary contract
Once all the necessary legal checks have been completed to the satisfaction of the buyer, you will be ready to sign an initial promissory contract (Contrato Privado de Compraventa). Before this stage you should have had the contract translated into English, Alhambra Villas are onhand to translate for you before, during, & after the signing. The private contract is usually signed privately between both parties.
The private cantract details the finer points of exactly what you are selling, and includes all the fundamental information about the sale such as the purchase price (including how and when it should be paid), the list of fixtures and fittings included in the sale, and the completion date when the deeds will be signed and the property transferred into your name.
This agreement commits both buyer and vendor to complete the transaction and at this point the buyer must pay the agreed deposit generally 3000€ or an agreed percentage of the purchase price. If the buyer walks away from the deal subsequently, this deposit will be forfeited; if the vendor walks away, they are liable repay the buyer twice the value of the deposit in compensation and the purchaser may retain the right to redress in most instances.
In Spain there is no requirement for the signatures of parties to a private contract to be witnessed.
After all the legal paperwork has been completed, you will be ready to sign the Public Deed (escritura de compraventa). This is the moment when ownership of the property passes from vendor to buyer. The notary (notario) must be present at this event to formally witness and register the transfer of ownership on behalf of the Spanish government.
Both parties will need to provide passports or other proof of identity and unless you speak good Spanish, the notary will insist that a translator is present to ensure you understand the full implications of the contract you are entering into. Alhambra Villas are official translators & will be with you at the completion of the sale.
Upon completion, the buyer must pay the balance of the purchase price, all professional fees, transfer taxes and notary fees. Copies of the deeds are then sent to the Land Registry and the tax office.