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Buying Spanish Property - What Happens Once You've Agreed Your Price? Some Very Important Points
from: ...When you have located your property, agreed a price and satisfied yourself (or your solicitor) that the property is free from all encumbrances and debts and or planning problems, it is structurally sound, bank guarantees are issued if it is a new build and that you are getting a good deal, then it is time to draw up a private contract.
This is a document that states in simple terms that you agree to buy and the seller agrees to sell the property as mentioned. It also stipulates the terms and conditions of the sale, what the price is, what is included in the price, when the completion date will be, what the amount of the deposit will be, how this will be paid, what the total amount to be paid is and how this is to be paid and anything else that is deemed important. Your solicitor will either draft this up for you or the agent will have drafted it so you need your solicitor to check it out.
Now then one piece of advice well worth heeding.
If the purchase of the property is dependent on anything - anything at all - ensure this is in the contract. If you need a mortgage and you cannot purchase the house without it - and you subsequently don't complete because you couldn't obtain a mortgage - You LOSE your deposit. In total.
I have seen it happen only once - the gentleman in question bought a house without having sold his first. He was convinced he would easily sell his house. He had bought cheap, and done lots of reforms to it, it was in a good location. But he took too long to complete the reforms and put his house on the market - in the meantime the UK market fell considerably affecting the Spanish Market and he couldn't sell his house. His 5 months (an unusually long time from private contract to notary) was up and he lost in the region of €40,000.
Had he have listened to advice and stipulated in the contract that the purchase was dependent upon the sale of the house (something the seller would have agreed to at the time) then he would have been safe. But he didn't listen and thought he knew best.
Let me repeat this just once more.
IF THE HOUSE PURCHASE DEPENDS ON ANY FACTOR - PUT IT IN THE PRIVATE CONTRACT
Once the private contract is signed you will then pay the 10% deposit (or whatever the deposit agreed is). Failure to meet the conditions of the private contract will lose you your deposit.
If the seller backs out then he must pay you your deposit back plus the same again.
If you want more useful advice about buying property in Spain - including how you can potentially reduce the cost of your proeprty by some 3-25%, then go visit www.spanishproperty-direct.co.uk/book.htm. For more interesting articles on buying in Spain visit www.spanishproperty-direct.co.uk/articlepage.htm
Vince Barnes is the owner of http://www.SpanishProperty-Direct.co.uk - a website aimed at informing buyers about the process of buying in Spain and keeping up to date with news and regulations affecting the Spanish Property Market. He has also just published the book - "The Insiders Secret Guide To Buying A Property In Spain - The Book Estate Agents Don't Want You To Read" - available at http://www.spanishproperty-direct.co.uk/book.htm
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