Buying a house in Spain

That buying a house works differently than in the Netherlands will not surprise you. We take you through the buying process from the moment you decide to make an offer on a house.

Negotiating

When you have found your dream home you can make an offer on a house. This is preferably done through your buying agent, but of course you can also contact the selling agent of the house directly. In the Netherlands it is not customary to let people bid against each other. In Spain this is unfortunately the order of the day. You will also experience that while bidding on a house that has been for sale for over a year, "coincidentally" several people are bidding. In any case, do not let yourself be pressured. Decide for yourself what you are willing to spend at most and do not exceed it.

Booking contract

If the seller has accepted your offer then you will want to take the house off the market. This is not a given in Spain. It is very common to have several sales agents working to sell the house. The selling agent will not take the house off the market until you have signed a reservation contract and paid a deposit. Once the down payment is received, he or she will also inform the other real estate agents that the house has been reserved. Until then, the house will remain for sale everywhere.

Part of the reservation contract is that you pay a deposit of (usually) €6,000. That generally gives you 1 to 2 weeks to start drafting the private sale agreement. The seller is not allowed to offer the house to other people during that time. Often, in the reservation contract, you also lay out further timelines already. You can also roughly agree with each other on what will be in the private sale agreement.

It is customary to include in the reservation agreement a provision that if the seller does not comply he or she must repay the amount twice. Thus, the seller cannot simply refund the amount and sell the house to someone else. So that also costs him or her €6,000 on balance.

Private sale agreement (Contrato de Arras)

If the house is reserved then there is work to be done. Your lawyer has to find out if everything is in order (due diligence). They will check that the house is free of squatters and tenants, that it is mortgaged and that all permits are in order. Your lawyer or the sellers' lawyer will draw up a Contrato de Arras during this period. In it, you will record, among other things, what movable property is being purchased, any reservations about financing, with which notary and when the transfer will take place. The Contrato de Arras also states who is responsible for which taxes. If the seller is not a resident of Spain, but is using the house as a second home, then the buyer will be responsible for paying the taxes on the sale and they will be deducted from the purchase price.

When you sign the Contrato de Arras, you often pay 10% of the purchase price. Again, as a rule, there is a provision that the amount must be refunded twice by the seller if the sale cannot go through due to his actions. For example, because he decides to continue living there himself.

To the notary

After signing the Contrato de Arras, schedule an appointment at the notary. There it is often a busy place. In addition to the buyer, seller and the lawyers, a representative from the bank will need to be present if a mortgage is taken out by the buyer. Realtors are also generally present.

Payment

Good to know is that the payment of the house is different than in the Netherlands. In the Netherlands, the buyer transfers the money to the notary's escrow account, who transfers it to the seller after the transfer. In Spain, a check is made out to the buyer's name for the amount. At that time the bank blocks the amount in the account. You hand over the check in front of the notary. The seller can then have the money credited to his or her bank account with the check.

Formalities after the purchase

After the purchase, you will receive final documents from your lawyer. Your attorney will also tell you what taxes still need to be paid and assist you with that. The lawyers can also help you transfer gas, water and light to your name.