Guide To Selling Your Property In Spain
As a professional Master Agent we understand how important it is to get the best price for one of your primary assets, so contact us now for a free valuation and let us take all the stress out of selling your Costa del Sol property. We offer the best marketing packages on the coast and have over 25 years of professional real estate experience.
Here is a basic selling guide to help you understand whats involved with selling your property in Spain.
We will give you honest professional advise on what needs to be done to sell your property quickly and for the best price. Sometimes we advise you carry out some essential minor repairs or cosmetic improvements. Importantly we will also stop you from over improving your property and waisting money on works that will not achieve any extra value. One thing we always advise is to declutter your home and keep it tidy when expecting viewings. Although we would love every property to look like a show home, we understand this is not always possible in a busy family home, but in many cases if you are selling a holiday home, it can be kept clear, clean and tidy.
Determining the correct marketing price of your property is one of the most critical decisions you will make during the selling process. As overpricing your property will likely cause buyers / investors to compare your property unfavourably against others on the market. Even worse, it is likely to make your property stagnate on the market for some time, giving potential buyers the impression your property is undesirable or very overpriced. Our valuer will be able to check on recent sales and whats currently on the market in your area, then meet with you to discuss your home’s correct market value, taking into consideration your property size, condition, attributes and location. Our valuer will share their experience and knowledge to give you an honest and accurate valuation, even if it’s not what you want to hear. Many inexperienced agents will put a property on the market at what ever the seller wants, worried the vendor may choose another agent if he is not happy with a true valuation, but this is not actually helping the vendor at all, as this usually just delays selling the property for a year or two until reduced to the correct marketing price. Our Valuers will discuss what price similar properties have sold for in the area and show comparable properties currently on the market, so you the vendor, can understand the true value and agree the correct marketing price. If priced correctly, the first 6 months of marketing usually offer the best selling opportunity, with our excited sales staff calling all our clients and the serge of marketing that follows one of our new listings.
You would think that selling a property in Europe’s favourite sunshine destination was easy, but it’s not as straight forward as you might imagine. For example, an agent in a typical UK residential town would simply put a property in his high street shop window, advertise in the local paper and phone a few clients wanting to live in that part of town. However, selling essentially luxury holiday homes in one of the worlds most exclusive destinations means we have to market to buyers all over the world trying to find those with the true desire and means to buy a luxury second home. Hence our monthly marketing budgets would make you wince. We also have a number of websites targeting different sorts of buyers to generate a good database of thousands of clients. Our websites have new properties added nearly everyday which keeps search engines and potential buyers interested. We advertise in some of the best Costa del Sol and European property magazines which are also accompanied by our CEO’s popular monthly double page Spanish property market reports & editorials. We also promote your property continually on all the best Spanish / Costa del Sol property portals for maximum exposure, which are viewed on-line via search engines all over the world.
Once we have found a potential buyer, we will try and get the best offer from them and handle any negotiations on your behalf. Once an offer has been agreed, we will assist the buyer with any mortgage requirements and introduce both the buyer and yourself (the seller) to our panel of recommended local law firms to handle all the legal, conveyancing, tax payments and paperwork for a smooth sale.
Instruct a Recommended Local Lawyer
We cant stress enough how important it is to appoint a good legal representative to handle the sale of a property in Spain, as we have all heard horror stories about those that did not. It’s normal practice to grant your legal representative power of attorney so that they can carry out all the duties needed in selling your property, including transferring or closing utility services, cancellation of any mortgages or embargo’s and dealing with the tax authorities re the mandatory tax forms and payments needed on completion. They will also deal with the buyers lawyers re preparation of contracts, exchange of all paperwork and receiving deposits during the sales process. We have a panel of 10 of the best English and Scandinavian speaking law firms along the Costa del Sol, which we recommend you use. This list has been compiled over many years, and is based on their professionalism and our client satisfaction
THE SALES PROCESS
Here is an outline of the actual sales process once an offer has been agreed.
1) RESERVATION DEPOSIT ON THE PROPERTY
The purchaser secures the property with € 6000 and signs a reservation contract along with the vendor agreeing to take the property off the market for 2-4 weeks, while the buyers lawyer checks the property tittle & paperwork.
2) SEARCH PROCESS
The buyers lawyers carry out a number of very important searches to check that the property has good tittle, been registered properly and has all the appropriate building licences for final occupation. They will also check that the property is free of embargo’s, encumbrances and any other outstanding debts. We also need to make some important checks so request copies of the following documents from the vendor.
Nota Simple (Land Registry details)
First Occupation License
Latest IBI bill, (council tax)
Latest Basura bill (Rubbish collection tax)
Community contact details
EPC (Energy Performance Certificate)
Latest Electricity bill
Latest Water bill
Bank mortgage details in applicable
Inventory list (if sold with furniture)
3) SIGNING OF PRIVATE CONTRACT
Once all the lawyers checks, searches and due diligence has been carried out successfully, both parties are ready to sign a Private Contract. The Private Contract is similar to “Exchanging Contracts" in the UK, and outlines the terms of the sale and sets the completion date. On Private Contract the buyers need to pay a minimum of 10% of the sale price to the vendors lawyer (minus the 6,000 already paid). In the case of “off-plan” purchases, usually 30-40% deposit will need to be paid on Private Contract.
4) FINAL FORMALITIES
The lawyer will need to work out all the outstanding amounts to be cleared including; community fees, service / utility providers, water, electricity, gas, IBI, Basura or tax bills. If there are any outstanding bills that still need paying on completion, the purchasers lawyers sometimes deduct the amounts from the purchase funds and pay the bills on the sellers behalf. It’s normally advised that the buyer takes over the current utility / service contracts as cancelling them can cause the buyers reconnection delays, but the IBI and Basura are normally automatically cancelled when the new owners details are submitted on completion.
If there is a mortgage on the property being sold, it will need cancelling. The vendors lawyer will need to arrange repayment of any outstanding amount plus a cancellation fee (normally 1% of the outstanding amount). This mortgage cancellation will also need to be registered at the notary and land registry on completion.
Non Resident Capital Gains Tax
In the case of a non resident selling a property in Spain the capital gains tax is 19% of any profit, the buyers lawyer is legally bound to retain 3% retention from the purchase funds on behalf of the Spanish tax office and disclose full sale details. This retention is payment towards the sellers capital gains tax, then more accurate calculations, payments or refunds are sometimes carried out during the next 4 months.
Plus Valia Tax
This is a local tax on the increased value of the land the property sits on, its worked out on the gains in land prices since the date first purchased to the date sold. This is not usually a very expensive tax but depends on where the land is and how long it has been owned. High value areas like beachside properties, which have been owned a long time can bring higher taxes.
5) COMPLETION DAY
On the day of completion the lawyers make their final checks and the Escritura (property title deeds) are then signed in front of an official Spanish Notary. The keys to the property are then exchanged for the final purchase funds and the property has now officially changed hands.
For more information on buying or selling property on the Costa del Sol, contact Peter or any of his team on Tel: (0034) 951 551 444 or email: info@OverseasDreams.com