3-You found the property you were looking for, now what?

Ok, you found a property you want to buy (hence, you have so far not listened to my advice...), so what do you do now?

The seller would like you to immediately sign a contract of course, and they will press you to immediately pay 10% of the agreed price. Do not agree to this before you have done extensive investigations on your own.

First of all; the announced prices of property in Spain are always open for negotiation. No one buys a property, paying the announced price and usually you can negotiate about 10-20% "discount".

It is also fairly common that the price finally indicated on the contract is lower than the actual price. This in order to lower the taxes for both parties (totally illegal of course and I do not recommend this). More about this in a later blog post.

So first of all; negotiate the price down (this may sound strange for a Swede, since in Sweden the announced price is usually way lower then the final price, due to the lack of legislation regulating the bubble-market in Sweden).

Also take into account that some real estate agents adds 3-5% on top of the price, that the buyer must pay the agent. This is something you must check before signing anything.

And, above all; The taxes in Spain are horrendous when it concerns buying property. Not only the taxes, but you need a lawyer or a notary for everything. Absolutely everything. The bureaucracy in this country keeps a lot of rich people rich... Hence; on top of the price, and on top of the money you need to pay the real estate agent you also need to calculate 8-11% in taxes and costs for the notary you need for making the purchase legal!

Hence, an agreed price of 200.000 Euro will actually be at least 220.000 euros and often up to 230.000 euro. Think about that when calculating what you can afford.

Ok, so you can afford it, after all

Once the price is agreed, the buyer pays 10% of that sum to reserve the property. This way no one else can buy it. Not even by offering a higher price. However, you have paid a lot of money to some strangers and you have no real guarantee that you will get it back, should something fail. This is why you must do some extra, and time consuming investigations.

Some of this is, for a foreigner quite difficult due to a few reasons:

1. Language issues (do not expect anyone to speak English)
2. Strange, slow and messy bureaucracy
3. Legislation from the time dinosaurs walked the earth, which in some cases makes it impossible for a buyer to get vital information about a property. Hence you need to buy the property before you get to know all the problems you would have liked to know before paying all that money
4. Amigismo; that people protect each-other because of friendship no matter what. This includes real estate agents hiding facts and administrators of the neighbor community protecting the old, and even deceased owners of the property you are to buy

So, please, please, please! Do get a lawyer if you are thinking about buying something in Spain. It is totally worth the investment!

One of the most dangerous things during this process is handing over the 10% reservation fee and I nearly lost 17100 euros to some quite dishonest people.

In order to tell you about this I will share my own story. Please stay tuned for the next blog post coming soon.
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