You’ve decided to buy a property in Estepona – so what’s the first step? Whether it’s your first time buying a property, or you’ve done it before in your home country, you’ll notice that the buying process in Spain is different. In this blog, we’ll guide you, step by step, on how to buy a property in Estepona successfully.
Step 1: Choose a Real Estate Agent
Your real estate agent will be your main contact when searching for a property in Estepona. It’s smart to choose one with local experience and stick with them throughout the process. They’ll get to know you over time and understand your needs better.
In Estepona, bigger agents have access to all the properties on the market, so you can work with just one that you are comfortable with. This means you’ll be able to focus on what matters, which is finding the perfect home.
Remember that if you visit a property or a project with another agent or by yourself, you will be registered. After that, no other agent can help you. This is why it's important to choose an experienced agent from the start.
Why a Real Estate Agent?
- Market Knowledge: A good agent understands the various areas and developments in Estepona.
- Property Awareness: They are up-to-date on available properties and can tell if they are priced correctly.
- No Cost to You: Their services are free to the buyer as agents earn their commission from the seller.
- Language Support: They will communicate with you in English, or another language you prefer, making sure you understand every detail.
- Professional Network: An experienced agent has established contacts in the industry, including law offices and other important services needed during your property purchase.
- Viewing Organization: They can schedule property viewings to fit your schedule and handle all communication, which is especially useful when dealing with local agents representing the seller who may only speak Spanish. During viewings, they can adapt based on your live feedback.
- Negotiation Skills: A good agent has expert negotiation skills. They know exactly which features of a property to mention, because they understand the nuances of the market. This will help secure a lower price and better conditions for you.
- After-Sale Services: A good agent offers complete after-sale support, which may include property management, rentals, and help with furnishing and refurbishing your new home. Additionally, they can recommend you other professionals..
At LUCKY SOL, we offer a personal approach and complete service from start to finish. With us, there’s no need to worry or stress. Just enjoy the journey to your new home in Estepona with a team that takes care of every detail and leaves nothing to chance. Contact us today to begin your property search.
Bonus Tip: Be careful of real estate portals such as Idealista/Fotocasa or other real estate websites. Portals are not regulated and don't have any rules. Many of the listed properties are no longer available, are outdated, duplicates or just entirely fake advertisements to get you to fill out your information. Sometimes, photos from different properties are mixed, and the location details can be misleading - even listing the wrong city. Properties advertised as 'close to the beach' may actually be far away. If it looks too good to be true, it probably is.
Instead, work closely with your chosen agent and if you see a property you like on the internet, share it with them. A good agent can quickly check if the property is available and tell you more about the area and development, which may be hidden on the advertisement.
If the property meets your preferences, they can help you schedule a viewing and assist with the purchase, all at the same price.
Step 2: Plan Property Viewings
Once you choose a real estate agent you trust, share your preferences with them so they understand what you’re looking for. They will then create a list of properties that meet your requirements. Together, you’ll narrow down this list before your trip to Estepona.
Property Viewings Tips
- Limit the Number of Viewings: It’s best to narrow down your favorites before arriving to avoid feeling overwhelmed. Try not to visit more than 6 properties in one day.
- Timing: Your agent will organize the viewings efficiently, scheduling them one after another with a break for lunch. This break is a good time to discuss the properties you’ve seen, relax, and ask more questions
- What to Focus on: Pay attention to both the properties and their neighborhoods. Even if you don’t like a specific property, another one in the same area might be perfect for you. If you have time, explore the neighborhoods on your own or with your agent, apart from the property viewings. Remember, things like furniture can be changed, so focus on permanent aspects like the layout, structure, view and location.
- Second Viewings: If you like a property, consider scheduling a second viewing. This could be later the same day or the next day, which allows you to see it in different lighting, like during the evening.
- Be Clear and Open-Minded: Always be clear and open with your agent; they are there to help you. Share your thoughts with them so they can quickly adapt the search to your feedback. It’s normal for your preferences to change as you view different properties. By communicating openly and being flexible, you help your agent find your perfect home more efficiently.
- Keep Your Emotions Private: When viewing properties, try not to show how much you like a property, especially when the seller’s agent is present. If you seem too interested, it could be used against you during negotiations. It’s best to keep your feelings to yourself until you discuss the property privately with your own agent.
At LUCKY SOL, we provide our clients with detailed insights about the area, key details of each property, and our honest opinions to help them make well-informed decisions.
Step 3: You Like a Property, Now What?
Great! You’ve found the right property. The hardest part is over. Now it’s time to start the actual buying process.
Meet With a Lawyer
Choosing and meeting a lawyer is an important part of buying a property. It is not required to use a lawyer, but it is strongly recommended. A lawyer will check if the property has any debts and make sure all necessary documents like licenses and registrations are in order. This process is known as “due diligence” and happens before you sign a reservation contract.
We advise our clients to meet with a lawyer during the same trip as their property viewings. This allows them to build trust, ask any legal questions, and potentially sign a power of attorney. This is a document that lets the lawyer manage contracts for you. It needs to be prepared ahead of time and signed in front of a notary. Because of this, your agent might ask you to fill out a form called KYC (Know Your Customer) with your details like full name, address, job, and passport number. Signing a power of attorney is easier in Spain than doing it in your home country and then mailing it to Spain.
Lawyers will never act without your permission, but they need this authority to manage contracts for you, register a N.I.E. number (more on this later), and transfer utility bills into your name after the purchase.
In short, a lawyer:
- Prepares Contracts: Drafts and reviews legal documents to ensure your interests are protected.
- Handles Payments: Manages financial transactions, including the deposit and final payments.
- Protects Your Rights: Ensures that all your legal rights as a buyer are safeguarded throughout the process.
- Checks the Property: Verifies debts, ensures all licenses are valid, and confirms rental permissions.
- Community Checks: Investigates any community fees or issues that might affect the property.
- Utility Transfers: Arranges for the transfer of utility bills in your name.
- Registration: Ensures the property is properly registered in your name at the local land registry.
- N.I.E Application: Applies for your Spanish tax identification number, necessary for property ownership in Spain.
- Post-Purchase Support: Provides ongoing assistance with any legal issues that arise after the purchase.
Our agency works closely with a professional law office experienced in real estate law. They have six offices along the coast and also assist clients with taxes for non-residents after buying a property. If you like the sound of our services and the law office we work with, don't hesitate to contact us to start your journey towards owning a home in Estepona.
Negotiation
The next step is to work with your agent to make an offer on the property. It’s important to be clear and include any specific conditions along with your price, such as furniture or repairs. Once your offer is ready, your agent will discuss it with the selling side.
When you offer less than the asking price, don’t expect it to be accepted right away. Usually, the seller will respond with a counteroffer. You will need to decide if you want to accept this new offer or negotiate further.
Keep in mind that in Estepona and along the Costa del Sol, significant price reductions are rare because of high demand. The likelihood of a price reduction can also depend on the seller’s nationality. For example, Spanish sellers are generally less likely to offer a large discount.
Deal Agreement
You have a deal! After you and the seller agree on the price and conditions, the following process can start. This process includes multiple legal steps that your lawyer will take care of.
Bonus: Golden Visa
Previously, purchasing property in Spain valued at over €500,000 could qualify a buyer for a Golden Visa, which granted residency in the country. However, this program has now been abolished.
Step 4: Reservation Contract & Payment
It’s time to reserve the property. The reservation payment usually ranges from €6,000 to €20,000 (in case of an expensive property, it can be 1% of the asking price). This amount is not an extra charge, because it will be deducted from the next payment. The reservation holds the property for you, making sure no one else can buy it while the rest of the purchase steps are completed.
For a resale property, this reservation payment is held in your lawyer’s client account. For new developments, the payment is sent directly to the developer.
During this period, your lawyer and the seller’s lawyer (if present) will draft the reservation contract. If it’s a resale, your lawyer will also conduct due diligence. This includes checking that all documents and licenses are correct, there are no debts, and the property can be legally rented out.
Once everything is verified and safe, your lawyer will transfer the payment to the seller. Keep in mind, this payment is non-refundable. If you decide not to proceed with the purchase, you will lose this payment. However, if the seller pulls out, they must refund you double the amount.
Apply for N.I.E (Número de Identidad Extranjero)
During the reservation period, your lawyer will apply for a N.I.E. (Número de Identidad de Extranjero) for you.
This is a unique identifier required for foreigners to buy property in Spain, open a bank account, and handle other legal matters.
To apply for the N.I.E., your lawyer will complete the EX-15 application form for you and will only need your passport photos, since they already have the rest of your information and know it’s for the property purchase.
Step 5: Mortgage
If you’re planning to buy a property in Spain and considering a mortgage, it’s important to start the application process early. Planning ahead not only gives you enough time to look around for the best deal but also helps you compare different lenders’ terms and conditions. Ideally, you should begin your mortgage application at least two months before the final payment.
To apply for a mortgage, you will need N.I.E. (as previously mentioned) and a Spanish bank account. Normally, if you are not taking out a mortgage, the bank account can be opened after you purchase the property. However, if you plan to finance your purchase with a mortgage, you will need to open a Spanish bank account before.
To figure out your mortgage payments, you can use a mortgage calculator or talk to a financial expert. For a clearer picture, you can check out this example mortgage calculator.
At LUCKY SOL, we have established contacts in the industry, allowing us to recommend professional mortgage brokers to our clients.
Step 6: Private Purchase Contract
After completing the necessary steps like obtaining the N.I.E and signing the reservation contract, the next step is to sign the private purchase contract, typically two weeks after the reservation contract. At this time, you will need to pay 10-30% of the property’s asking price. Remember, the reservation payment you made earlier will be deducted from this amount.
It's important to note that while you can skip directly to signing the title deed, in most cases, this contract is required.
There are three main types of private contracts:
1. Private Purchase Contract (Contrato privado de Compraventa):
- This contract is legally binding. If one side wants to cancel the contract, the other can enforce the contract through legal means.
- If the seller cancels, they must pay twice the deposit amount to the buyer.
- If the buyer cancels, they lose their deposit of 10-30%.
2. Forfeiture Deposit Contract (Contrato de Arras Penitenciales):
- This contract allows either party to cancel.
- If the seller cancels, they must pay twice the deposit amount to the buyer.
- If the buyer cancels, they lose their deposit of 10-30%.
3. Purchase Option Agreement (Contrato de Opción de Compra):
- This contract gives the buyer the right, but not the obligation, to purchase the property at a specified price and within specified time.
- The seller is obligated to sell if the buyer decides to proceed.
- If the buyer decides not to proceed, they lose the deposit.
Step 7: Title Deed
The signing of a title deed is the final moment in the property buying process. It happens on a date and time agreed upon by both you and the seller.
Last Check of the Property
Before the signature, it’s common to do one last check of the property. This check is typically carried out by you, your real estate agent, and sometimes the lawyers involved. The point of it is to make sure no new issues have arisen with the property since your first agreement.
Signing of the Title Deed
The signing takes place in front of a Spanish Notary, which officially completes the purchase. You do not need to be present yourself. If you have granted power of attorney to your lawyer, they can handle the signing on your behalf with your agent present.
The title deed includes all the details about the property, such as its description, the price agreed upon, how and when the final payment will be made, and when you will take over the property. It also lists any maintenance that needs to be done, the current condition of the property, and any situations where the seller might be responsible for any issues.
After the deed is signed, you or your lawyer will usually pay the seller the remaining amount by check or via a bank transfer on the spot. At the same time, you will receive the keys to the property.
Once you step out of the notary’s office, the property is officially yours. This may differ from your home country, where you often have to wait until the sale is registered.
Step 8: After-Sale
After the title deed signature, your lawyer will handle the post-sale tasks. They will transfer the water & electricity bills, and community fees into your name as the new owner. Your lawyer will also take care of paying essential taxes and fees, such as the transfer tax, notary fees, and land registry fees. These fees cover the legal work involved in your property purchase and are obligatory; they are paid to the government, not to the lawyer. Lastly, you will pay your lawyer for their help throughout the entire buying process.
If you want to understand all the taxes and fees associated with buying, owning, and selling a property in Spain, check out our blog post on property taxes in Spain.
Opening a Spanish Bank Account
At this stage, your lawyer will also help you open a Spanish bank account. While it’s not required, we highly recommend it. You’ll use this account to pay all community fees, taxes and other expenses.
Touristic License
Another important step is obtaining a touristic license if you plan to rent out your property. Your lawyer can assist with this process. This license is required by law and necessary for listing your property on popular online rental platforms.
Conclusion
Thank you for following along with our comprehensive guide on buying property in Estepona. We made sure to cover every step, from choosing the right real estate agent and understanding the legalities, to finalizing your purchase and handling post-sale formalities. We hope this guide has provided you with the clarity and confidence needed to proceed with your property purchase.
If you’re ready to take the next step, don’t hesitate to contact us at LUCKY SOL. We would be delighted to become your real estate partner and assist you throughout the entire process. Let us help you find your perfect home in Estepona with ease and confidence.
