Buyers Guide ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

Welcome to the buyers guide.

The Buying Process

Here we address some of the most common questions a new home buyer may have. We would be happy to answer any specific questions you might have at anytime, so please feel free to contact us at your convenience.

YOUR FIRST DECISION
Before considering the purchase of a home, you must determine the purpose of the home. Will it be only a holiday home for your exclusive use? If not, will you rent out the property when it is not being used by your family, friends or yourself? How important is that rental income? What area of Spain do you want your home in? Do you want coastal or inland? How important is it to be within easy reach of an airport, or schools, hospital etc.? Do you want to be near to other British owners or do you prefer the Spanish influence? Do you want a new property or a re-sale? Apartment or townhouse or maybe a villa?

DEPOSITS
The minimum deposit on your holiday home is 20% - 30% and most of this money is paid in stages. The amount of initial deposit will vary from builder to builder for new developments, Most builders will require a €3000 - €6000 payment on the day that you make your final choice of property and enter into a purchase agreement with the builder for the specific home of your choosing. This “good faith” deposit will enable you to enter into a formal agreement with the builder, thus fixing the price and protecting your chosen "lot" or home from any price increases. Usually then within a given amount of days (often 14 to 30) or at the time construction begins on your individual home, you will be required to pay the balance of 20% or 30% of the purchase price. The final amount of the purchase price is due upon completion or the handing over of the keys. In most cases this is paid via your lawyer from your own funds or from a pre arranged mortgage or hipoteca.
If you have chosen to purchase a resale property instead of a new build then the process is slightly different. The initial deposit is also a reservation deposit and is normally €6000. The payment of this sum is usually non refundable and takes the property off the market. This is good because it means that you cannot be gazumped. Once this reservation deposit has been paid you would normally have an agreed time in which to pay the balance deposit which including the reservation deposit equates to 10% of the purchase price. The balance of the purchase price would then be payable on the agreed completion date either in cash, bankers draft or by way of a mortgage.

BANK ACCOUNT
A Spanish bank account is required to facilitate the transfer of funds for your purchase as well as to function as your operating account, should you choose to use your home as a rental property. We will be happy to introduce you to one of the major banks in the area and assist you in opening a suitable account with internet access, which can be monitored from your computer at home. An initial deposit of €50 should be adequate to open your account, which is best often paid by cash.

NEW OR RESALE ?
The availability of resale properties changes daily. We will be happy to include a tour of appropriate resale properties within your viewing program should this be of interest to you. Good resale property will not generally be on the market long and while there is always a possibility that a "bargain" may become available, a true bargain in a prime location can be sold the same day as it is listed.

The importance of buying in a "prime" sought after location is crucial if the property's resale value is to be optimized. There could well be a good reason why a particular resale is "cheap". Currently moreover, due to the great remaining shortage of land in this area, and planning on the part of builders to make the newer holiday home communities more grand and full of luxurious resort amenities (and more modern designs), a new home can often be a wise choice. Resale homes often gauge their selling price on what the new ones are selling for, so often a new home that is also under a builder’s warranty might amount to less of a headache in the long term.

AFTER SALES SERVICE
· After the sale has been agreed, we will continue the working relationship we have just begun.

· We will be available to answer all your questions and queries regarding mortgages, your “closing” date, and management…etc.

· We will ensure that the property is completed, the features are as ordered and any repairs have been made.

· We will assist in the setting up of all of your utility services (power, water, satellite TV, and telephone service).

· We will co-ordinate the delivery of your furniture pack and ensure that all items are in working order, are situated correctly, and that all packaging is removed from your home.

· We will ensure that your property is continually ready to receive either your guests or yourselves, and we will furnish you with our “after sales information pack” which details a variety of creative ways by which you can get the most out of your investment property.

MORTGAGE INFORMATION

We can introduce you directly to many lenders, who will listen to your particular needs and wishes, and will search for and advise you regarding the best available financing opportunities for you.

Most clients choose a non-verification mortgage. By putting at least a 50% deposit, the criteria for approval is minimized. We would particularly recommend this for those who do not have a history of predictable income and self-employed people in particular.

As a non- resident the minimum deposit allowable to purchase a holiday home in Spain. is 30%. Some of the documentation that you may need to provide (depending on the criteria set by the lending bank) is set out below. (Most of this is not required with a non-verification mortgage which is easily obtained with a 50% deposit)

A. Copy of borrower(s) and co-borrower(s) passport.

B. Employment history, to include all of the following items:

a. Three most recent pay slips and last two year’s Tax Returns or P-60's.
b. If self employed a letter from your accountant showing last 2 years gross income. Plus a copy of your Self Assessment Form and Inland Revenue certificates
c. Pension statement (if applicable).

C. Copies of three most current months of bank statements.

D. Spanish bank account details

E. NIE number

FREQUENTLY ASKED QUESTIONS (regarding mortgages for more detailed general questions please see our FAQ page)

What does it mean to lock-in?

When you "lock-in" your lender will guarantee the interest rate on your mortgage for a limited period, regardless of the current market rates. This option usually is done for a fee. If you are concerned that rates may rise before your closing date you may want to "lock-in".

What is an appraisal?

This is an estimate of the value of the property you intend to buy, which is performed by the lending institutions “appraiser” who will be licensed by the appropriate body here in Spain. The appraisers job is to determine an unbiased property value (also known in the U. K. as a valuation).

Can I pay off my mortgage early?

Most mortgages allow you to pay off the mortgage early. Some mortgages do have a prepayment penalty, but most do not. Ask your mortgage advisor about the program you've applied for.

What is the difference between fixed mortgages and an adjustable rate mortgage?

Fixed rate mortgages offer an interest rate that remains fixed for the entire term of the loan or for an agreed period. An adjustable rate mortgage (ARM), or flexible tracker, is a loan in which the interest rate is fixed at an exceptionally low rate for an initial number of years and then changes to reflect the current interest rates. An ARM might be advantageous if one wishes to sell or upgrade to another property in a few years, by lowering your monthly mortgage payment and thus your total operating expenses in the short term. Ask your mortgage advisor for the option that is best for your individual circumstances and investment objectives.

What is a closing?

Closing is the date when the buyer, seller, and lender (or their agents), agree to meet and legally transfer the property and disperse of all funds. This is performed in the office of the Notary.

 

What are closing costs?

"Closing Costs" are the costs associated with the transfer of property. Typical costs amount to approximately 10% of the purchase price for the buyer. This amount consists of various bank fees, Lawyer and Notary fees and government taxes.

FURNITURE PACKS

The purchase of a complete furniture package can save the new home owner a great deal of time and trouble, and allows you a true “turn key” investment. By choosing the proper package in advance, you can visit your new home shortly after the closing or alternately offer it immediately for letting out to tourists. These furniture packs come complete with all kitchenware and other decor, and are available in various price ranges and qualities from budget to premium. (Ex: 2 Bedroom apartment – Budget €4000 / Premium €12,000)

SAMPLE FURNITURE PACK:
Kitchen Dinnerware/Service /6
6 dinner plates, 6 salad plates, 6 soup bowls, 6 coffee cups, 1 platter, 1 vegetable dish, 1 sugar bowl w/lid, 1 creamer, 7 Piece Cookware 1 qt saucepan w/lid 2 qt sauce pan w/lid 5 qt Dutch oven w/lid 10” fry pan 24-piece Glassware Set 6 wine glasses 32 Piece Flatware /6 6 dinner forks 6 salad forks 6 teaspoons 6 knives 6 soup spoons 2 serving pieces 7 Piece Salad Set 4 salad bowls 1 large serving bowl 2 salad utensils Coffee Maker *Toaster – 4 Slice (Standard Pkg-2 Slice) 5-piece Chef Knife Set Round Casserole *Blender *Electric Tea Kettle Acrylic Cutting board Paper Towel Holder Mixing Bowl Set Colander Cutlery Tray Pitcher 2 Cup Measuring Cup Measuring Cup set Kitchen - continued Measuring Spoon Set Salt and Pepper Set Utensils Whisk Peeler Strainer Grater Ladle Turner Slotted spoon Large fork Basting spoon Corkscrew Kitchen Towel Set 2 dish cloths 2 pot holders 6 placemats *6 coasters Kitchen Wastebasket Iron & Ironing board Broom, Dust Pan & Mop Laundry Basket Upright Vacuum Clock Radio 10 Light Bulbs Fire Extinguisher Electronics 19” Color TV w/remote 25” Color TV w/ remote Master Bedroom 2 Queen Sheets Sets 2 Standard Pillows 2 Queen Pillows 1 Queen Blanket 1 Queen Matt Pad 1 Queen Comforter 10 Coat Hangers Full Bedroom 2 Standard Pillows 2 Full Sheet Sets 1 Full Blanket 1 Full Matt Pad 1 Full Comforter 10 Coat Hangers Twin Bedroom 2 Standard Pillows 4 Twin Sheet Sets 4 Twin Blankets 2 Twin Matt Pads 2 Twin Comforters 10 Coat Hangers Master Bathroom 6 Bath Towels 6 Hand Towels 1 Waste Basket 1 Brush w/holder 1 Tumbler 1 Soap Dish 1 Box of Tissues 1 Bath Mat 2 Hair Dryers Second Bathroom 6 Bath Towels 6 Hand Towels 6 Wash Cloths 1 Soap Dish 1 Brush w/holder 1 Box of Tissues 1 Tumbler 1 Bath Mat