When Frank and Diane bought their UK home 20 years ago it had been very easy. A choice of two or three towns close enough to each others’ workplaces, relatives and a decent school, the budget dictated by their deposit and earnings. They just looked through the local paper, went into a few estate agent shops and a handful of viewings later they chose a house they both loved. Everything was sorted out by the lawyers and estate agent. Nice and easy.With their Spanish property, the choices are infinitely wider. So their first steps are to see what they can get for their money, decide what sort of lifestyle they would like in Spain, and where. They have been told that they should budget 15% for buying expenses. On the other hand, they would hope to negotiate a little money off the asking price, so they have decided to look at properties on or slightly below their budget.
Diane is a little more tech savvy than Frank, so she is looking via the internet and he is going for the traditional media.
Property portals didn’t even exist the last time Frank and Diane bought a house. Now, virtually all properties appear on them, in every country. Portals are not estate agents, they are more like an online magazine where individual estate agents pay to list their properties. To use the portal, Diane goes to the website, types into the ‘Search’ box her chosen area, type of property (villa, apartment, farmhouse, land etc), minimum and maximum budget and number of bedrooms. Instantly the portal lists all the properties that match her criteria, from a range of different agents.
She can then flick through them and save to her own dedicated list any she wants to take a closer look at later. She also prints the details of the ones she likes to show them to Frank. With a couple of the properties she likes most of all, Diane clicks on the contact details to see who the agent is and what else they offer.
What portals do well is showing the properties in a user-friendly way with the very latest technology. They can even be used on the move, to research property for sale in a Spanish village, for example, while sitting in the village square! On her tablet device (iPad, Nexus, Hudl, etc) Diane is able to bring up an online map and draw with her nger on the screen around the area in which she is interested; instantly every property within that area appears on her screen.
The biggest portals in each country – Rightmove in the UK, Seloger in France, Immobilienscout24 in Germany – each have an international section with hundreds if not thousands of Spanish properties. Diane also discovers some speci cally overseas property portals such as www.aplaceinthesun.com and Spain specialists such as www.kyero.com. There are portals aimed at Spanish buyers but with listings translated into English too, such as www.idealista.com/en, and if they are not in English, such as www.pisos.com, her browser (Chrome, Safari, etc) has a setting that gives her an instant translation from Spanish to English.
By the end of her search, Diane has saved 50 properties in various parts of Spain that she has kept for a closer look.
One downside to portals is the dif culty in knowing if a property is really for sale. There is a tendency among some agents to list attractive (or attractively priced) property that is no longer available, to entice customers to their own websites. Most portals are doing what they can to discourage agents from doing it. You may also see the same property listed by different agents.
Portals are not the only resource online. After a few seconds of Googling, Diane finds hundreds of estate agent websites and online magazines to look at.
As well as these, she also finds herself invited to sign up for free guides offering advice on buying property in Spain.
This is a potential risk. People with the money to buy a property abroad are a tempting target for anyone, honest or not, trying to sell “investments”. The relaxation of UK pension rules in 2015 has made those over 55 even more tempting. The first step in getting you to part with your money often sounds innocent enough – a “pension review” for example, or a free downloadable guide. The vast majority of these are entirely innocent and often very useful; at worst you may get a sales call from an “investment expert”. But when giving out personal details use extreme care, especially when it comes to financial details.
Frank is happier using old technology and over the course of a week has gathered up a pile of magazines and newspaper supplements. Most national newspapers include a property supplement, especially at the weekends, and there are also magazines devoted to overseas property, such as A Place in the Sun in the UK, or global titles such as Abode2. Many countries also have specialist magazines dedicated to Spain, such as Living Spain in the UK. All of these carry adverts (as well as advice and information) for property in Spain.
Frank has also been to his local library and ordered books on buying property and retiring to Spain. Looking closer, he notices however that many were written at least a decade ago.
As a first step in their search, Frank has bought two identical copies of a popular overseas property magazine. He keeps one for himself and gives one to Diane, and each of them, separately, circles properties in the magazine using coloured pens. A property Frank loves gets a green circle, one he quite like gets orange and a property he dislikes gets red. Only after finishing circling all their properties do they swap magazines to see what the other really likes (and hates!).
Whenever they go to Spain, Frank and Diane enjoy looking at estate agent windows. It’s a good place to start, because even with the growth of portals and the web, good premises is an early indication of a respectable agent.
A local, trained and experienced agent should be every home buyer’s best friend. Although paid by the seller, it is the buyer they need to impress and they should be pricing property fairly, but to sell. They will be able to offer guidance on all aspects of the area, the property and the buying processes. Many will stay in touch and help buyers long after the sale – this is a specialised market where word of mouth recommendation goes a long way!
Your safest bet is to buy through an AIPP and/or RICS member, as they are trained, vetted and have signed up to a code of conduct. To see AIPP and RICS members working in Spain, consult their websites at www.aipp.org.uk and www.ricsfirms.com.
Spain has professional organisations for estate agents, both at locally and nationally. Best known nationally are API (Agentes de la Propiedad Inmobiliaria, www.consejocoapis.org) and GIPE (Gestores Intermediario en Promociones de Edi caciones, www.gipe.es/en). API and GIPE members should be trained, but ensure that the agent you choose is still a member (or was ever a member) by looking at the organisations’ websites.
Frank is puzzled to see the same property on rival agents’ websites. There could be several explanations for this. The seller may be trying his luck with two or more agents, just as they do in other countries. The agencies could be teaming up – which makes sense in Spain, where overseas buyers often search across a wide range of locations and is possible due to the relatively high commissions. Another possibility is that the agent is listing property he is unauthorised to sell, to make his website look more enticing – magically the property will have been sold when you ask to view it!
Remember that just because an agent is from your country or speaks your language well, you should not abandon all caution.
Another option is to employ the services of a “property finder”. They are most popular with expatriate executives who are short of time, but receive a relocation budget from their employer. Property finders are usually expats themselves and so are able to offer a supportive “handholding” role to new arrivals. The benefits include being the busy buyer’s friend on the ground, sifting through property and helping to negotiate prices from a position of local knowledge. In theory they could pay back their own fees by getting you a cheaper price and saving you time and effort.
However, this is an unregulated activity and you need to be sure that a property finder genuinely has contacts and knowledge in your chosen area and price range.
“That crack? Purely cosmetic.”
“You don’t need a survey, no-one gets them.”
“I’ve got a mate who’s a lawyer; he’ll do it much cheaper and quicker.” “Okay, it hasn’t got ‘official’ permission, but this is Spain!”
“No, it’s simple to get utilities connected, they’ll do it on your first morning.”
THE AIPP / RICS / RDE GUIDE TO BUYING A PROPERTY IN SPAIN
Sadly, these comments are typical of those you hear when buying property in Spain. AIPP and RICS members are bound by Codes of Conduct to offer an honest service. AIPP Managing Director Peter Robinson answers six common questions:
1. Is buying a home in Spain difficult?
Not at all! However, potential heartache, time and money can be saved by just ‘starting right’. Most people purchase a foreign home with their spouse or partner so it is very important that you are both completely in agreement, that you want the same outcomes, same country, region, property and lifestyle. Take some quiet and re ective time to ponder these issues and perhaps write down, separately, what it is you really want before embarking on your journey together towards a purchase. Selecting a good agent to work with is even more important than in the UK as the process of buying and then support following a purchase is different. It can take much longer (often 6-18 months) to nd the right location and property in Spain and it will be a more comfortable process if your agent is reputable and can offer you the appropriate, expert guidance. Being a member of the AIPP/RICS is a great start.
2. Any tips on budgeting?
If you have a property in your home country you understand what it costs to both buy and own a property. But while the sales price of your Spanish property may be appealing, the actual cost of buying and owning it may be higher than you thought. For example, when judged against a UK or
Australian property by number of bedrooms or per square metre, a Spanish property may be very well priced. But you need to factor in around 12% – 15% for buying costs, especially when buying using a mortgage. These costs need to be paid for in cash and cover mainly legal, notary and local taxes.
The running costs must be carefully considered too. Hotter weather and the effects of sea air can mean spending more care and cash on your property. Detached villas with private pools need more caretaking than an apartment, for example, and there will be local municipal taxes to pay too. It is with this in mind that buyers should consider the rental appeal of their property, and indeed whether local laws allow them to rent their property out. Renting out your property even for a short time can help to offset or completely cover the costs of maintenance and ownership. However, this income will be subject to taxation so do your sums carefully and check with the authorities.
3. Could we save by not getting a lawyer?
Few British people would buy a property in the UK without appointing an independent legal representative, and the same goes in most countries. So why take the risk when buying abroad? The AIPP and RICS advise appointing a truly independent lawyer (abogado) who only has your best interests at heart. A lawyer linked to the agent/ developer selling the property may be working for the ‘deal’. Beware the term ‘solicitor’ too. In English it normally means a quali ed lawyer but translated from Spanish it may refer to someone without any formal legal training but with a business ‘advising’ on property sales. You can nd abogados who are AIPP or RICS members at www.aipp.org.uk and www.rics rms.com.
4. What about a survey?
You normally get a survey done on a UK property, so why not on a prospective Spanish home? Many repossessed or unsold homes built in the boom of 2000 to 2007 have lain empty. Unless your property comes with a speci c guarantee that your independent lawyer veri es, then AIPP/RICS recommend you have a building survey completed. If you are buying a “resale” property, previously owned and occupied, a survey is well worth having too. Spanish building regulations have improved immeasurably over the last 20 years or so, but even more recent properties might have been built by ‘cutting corners’ and need checking over by a professional.
5. What issues do permanent emigrators face?
Relocation for short / long periods or on a permanent basis brings different considerations. Schools tend to require applications in January for the autumn intake. Tax residency is a big subject and you should take specialist, regulated advice. If you are receiving a pension in the UK you need to consider the upside/downside of sterling currency uctuations into euros. A currency broker (several members are listed on the AIPP website) can help you manage
your money and deliver bank transfers that could significantly improve what you receive versus your bank default option. Healthcare is freely available to EU citizens in member states but you should register with the local doctor and satisfy yourself that your Spanish language skills, or the doctor’s English, are good enough to be understood, perhaps in an emergency. Hospitals vary in their ability to understand English and can be hard- pressed to cope if a signi cant number of older expats (of many foreign nationalities) live close by and are frequent users of their services. Planning everyday considerations around an up-to-date passport, European driving licence and the logistics of moving house contents in a lorry for a permanent move, also need care and attention.
6. Planning for the future
Making a legally binding will in your home country and Spain is very important. Inheritance and succession planning may be sober subjects but you will need to pay careful attention if you are to leave to your family/bene ciaries all that you intended. On 17 August 2015, European Union legislation on ‘forced heirship’ changed according to regulation number 650/2012. Any person then owning property in a participating EU state (who has taken appropriate action before their death), can choose between the law of the country of their habitual residence, or the law of their nationality to govern the devolution of their EU estate.
Between your home country, Spain and the European Union, rules can change frequently, so getting proper, up-to-date and regulated tax advice is essential.
Source; AIPP / RICS / RDE