Buyers tips

Because it is impossible to cover all the important aspects of a real estate operation in Spain in one article, extensive and complete it may be, we will try to highlight some of the most practical issues that the buyer of property in Spain should have in mind before he jumps into a deal. Although our clients enjoy the privilege of using our vast experience and knowhow in the property market, it is always worth a while reading about the different aspects of this market.

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Even though information is available on the Internet and many books were written about buying properties in Spain, one should be as informed as possible about the real estate market in Spain as it very dynamic one and on many occasions is subjected to constant changes. Local lows and city hall regulations are constantly updated and renewed, the market offer and demand are never fixed and buyer tendencies shift every once in a while.

1. NIE: Identification Number for Foreigners

   The NIE is an identification number for foreigners, issued by the Spanish central administration to non Spanish residents and non-residents. It is needed when foreigners fill up government official forms, such as income declaration, tax paperwork, or the paperwork related with mortgage application and property purchase etc. (Download NIE application form here.).

   It is highly recommended to apply for the NIE before signing any “Arras” agreement or even before making the “Paga y Señal”, especially if you are interested in applying for a local mortgage or other local bank finance. The maximum time required for obtaining this number, as it is defined by the Spanish interior ministry, is 6 weeks since presenting the NIE application, but in some cases it may take more than 8 weeks. With the last legislation from January 2006, notary will not allow a foreign property buyer to inscribe his property in the central Register Office before having the NIE. This can be critical when bank finance is part of the deal and when the buyer depends on bank finance to complete the purchase.

   We know about cases in which Arras conditions couldn’t be fulfilled because the bank wasn’t ready to finance the purchase before the NIE was obtained, and as a result Arras agreement was expired and the buyer have found himself in risky position of loosing the Arras deposit.

   As from January 2009, we recommend all our clients to apply to the NIE before coming to Barcelona to view properties. We also offer a special service for obtaining NIE. We will be managing it directly from Barcelona. For information about this service please be in touch with our office.

2. Open a bank account:

   Opening a bank account in Spain doesn’t cost anything and it is recommended for those who are quite sure about purchasing property. It is always better to view properties when you already have a local active bank account, especially if you plan on having finance for part of the investment. Local bank account will be required for domiciling your home bills such as gas, electricity and city hall taxes, as well as for the payments of the building community charges.

   Many of our clients chose their homes without having an active bank account and had to extend their stay in Spain for an extra day just for this purpose. This point could have a special importance if your visit to Catalonia is brief and your schedule is rigid. You should also have in mind that most banks in Spain are opened only until 14:00 hours.

3. Prepare cash for deposit:

   We always recommend preparing in advance some cash, in case it will be necessary to reserve the property by paying a small deposit on it. The good-value properties do not last long on the market and in many cases you will be required to go immediately to the seller agency office and leave a small deposit in order to secure the deal. Not always we recommend our clients to secure the deal with cash deposit payments as there are other methods which in some cases can be more effective. However in some cases it will be indispensable.

   We do not recommend paying this amount without consulting an independent agent or buyer agent such as Homesearch Barcelona®, as sometimes vendor agencies keep the money without really providing sufficient guarantee for the deal.

4. Move fast when you find the home that you want.

   We have always recommend our clients to take their final purchase decision only after being 100% sure about the specific property and we opposed making such an important decision under the pressure of the seller agency or representative. Until recently sellers agents used to urge the home buyer to go immediately to their office because “there is another buyer who is also interested in the same house…”. The reason for this sense of urgency which involved many deals was that the local real estate market in Barcelona used to be extremely dynamic and the best properties were sometimes being sold within days. I remember a few cases in which the buyer delayed his final decision, even though all the terms of the deal were agreed, and as a result lost a property. Since 2008 things have changed and the market has slowed down considerably. However good properties still getting sold relatively fast, so when you find the apartment you like, go for it. Normally Homesearch Barcelona® we will be beside you and will help you with analyzing every situation, but it is also important to be prepared to move fast when it is clear that the property is really an attractive one.

5. Don’t take anything the seller  rael estate agent says for granted.

   This tip is perhaps not new for you and is probably applicable also in your own country. However, “love is blind”, and also with real estate properties. If you have us by your side then you are more protected of agents stories, which in many cases can be defined as “tales”. The sellers agent tales are meant to keep your level of enthusiasm high, especially when you view a home for sale that you really like. Remember that everything which is told by the seller or by his agent must be confirmed and certified, even when the agent/seller seems to be the nicest guy in the world and speak excellent English...

6. Visit the selected property more than once!

   Once more it seem as a trivial “tip” but from experience we can say that it is not so obvious for many buyers that they should repeat the visit at least once more before making the final decision. In some locations it is important to visit the precise location, both during day time and night time, where in some streets, especially in the old city of Barcelona, the character of the locations may change radically after the sun set…

7. Make sure you have a contact person in Barcelona.

   Some people think that the most complicated thing about purchasing properties abroad is the purchase itself. In many cases the complications only start after the purchase has been concluded. It can be communication problems with your new neighbors, it can be the city hall sending letters which you never receive, notifications from the community of neighbours in your building, or any other missed notifications. It is extremely important that you will have a local person or agency that will take care of things for you. Obviously it will be better that this contact person will be Spanish speaker. For our clients we provide this service for free, for more details see our property management page, or just contact us.

8. Watch out for local lawyers:

   Some of the buyers in Spain used a local lawyer or solicitor who speaks foreign languages as an expert for their purchase deal, thinking that by this they will avoid complications and secure the quality of their home purchase. That might work in other EU countries, but in Spain, normally, a lawyer do not intervene in regular real estate operations as it is the estate agent who has the legal authority, as well as the experience, to prepare of all paper work necessary. Furthermore, because most lawyers just do not exercise real estate as part of their daily work, they tend to over protect their clients by aborting any deal that has a degree of complication, ignoring possible solutions that requires field work. The local lawyer work could be useful for securing the legal aspects of the purchase (see legal guarantee of Homesearch Barcelona lawyer) but will not guarantee the quality of your investment!

9. Be sure you have approval of finance before you sign Arras agreement

   This advice is of an extreme importance, especially in times when banks are restrictive in approving loans. Many foreign buyers in Spain are starting their property search without arranging first the bank finance. Until 2009 in Spain banks have competed fiercely for financing real estate deals and therefore were very easy to approve you application. This has been changed in recent years and it is recommended to consult the bank for the finance terms before viewing properties.