Anyone in the history of home ownership will tell you that investing in bricks and mortar is a stressful business. If you are looking to buy a property in Spain, you may think that the romantic sheen of spending the rest of your days in the likes of the Costa del Sol will take the edge off making such a huge financial commitment, but don’t be fooled. The Spanish property market is a tricky maze to navigate unaided. Without independent specialist Spanish legal advice to guide you through its varying twists and turns you could see your dream purchase turning into a nightmare of epic proportions.
The horror stories of demolitions and ‘land grabs’ are regularly reported on in the media, but they are by no means the norm for the savvy purchaser looking to invest or retire in Spain.
It is true to say that there are many common pitfalls befalling those looking to buy in Spain, but they are easily avoided. Here’s how to avoid the pitfalls of buying a property in Spain…
Research, research, research!
It is of vital importance that you cast your net wide with your initial search. Relying on one estate agent to show you potential properties is a sure-fired way of missing out on a bargain, and is one of the pitfalls of buying a property in Spain. A sole estate agent will be in a position to sell to you on their terms, as they will be the ones preparing the comparisons on properties. Think about conducting an online search first and then reaching out to several agents based in the town or area that you are looking to settle. Getting a broader view of the market will help you snap up the deal of a lifetime and help you avoid paying over the odds.
Be sure to engage an independent Spanish lawyer
As with any financial transaction you make, big or small, impartiality is key. If you are unfamiliar with the Spanish language or the Spanish property market it may seem comforting to take tips and advice from the seller or the estate agent who are locals. It is worth remembering that the seller’s and estate agent’s interests are not aligned with your own. Agents and sellers will tell you want you want to hear and not necessarily what you need to know. That is why it is essential that you use an independent specialist Spanish property lawyer with no ties to the seller or the agent to avoid any conflict of interest and, above all, so that you receive the best possible advice for your investment.
Do not pay a deposit before engaging an indepedent lawyer
Assurances are cheap in the Spanish property market. Often, those who have their heart set on a property are coaxed into handing over hefty deposits by the estate agent in order to ‘secure’ the property. You may be told that there has been unprecedented interest in the home you have your sights on, but this hyperbolic talk should be taken with a pinch of salt. As deposits are non-refundable in Spain, if you have handed over money before full enquiries have been made on the property, and it turns out that your new home is not fit for purpose, you will be faced with the unenviable option of either cutting your losses with the deposit, or proceeding with the purchases in the hope that the unknown costs of fixing your property will not bankrupt you. Neither is ideal and both are very much avoidable. To avoid this pitfall of buying a property in Spain, be sure that your lawyer has made full enquiries in relation to the property.
Buying an off-plan property in Spain
If you are investing in a property that has yet to be built it is important to protect your financial investment from unscrupulous builders and developers. In a transaction of this complexity it is of vital importance that you seek independent legal advice so that your objectives are recognised and investment ring-fenced. Without the necessary due diligence on a company, as well as bank guarantees recognising and protecting your contribution, you could end up with nothing and falling into this common pitfall of buying a property in Spain. For more information on off-plan properties in Spain, please read our article setting out the dos and donts of buying an off-plan property in Spain.
Do not ignore the ongoing expenses of owning property in Spain
Even if your purchase has run smoothly, ignore ongoing expenses at your peril. With any property transaction there will always be taxes, community fees and council tax to pay. Failure to do so could have devastating consequences on your enjoyment of your new life in Spain. For more information, please see our article detailing the true cost of being a homeowner in Spain.
Next steps
Location, location, location may be a popular mantra for property hunters, but when it comes to the Spanish property market preparation, preparation, preparation is the only way to avoid unnecessary stress and enjoy your dream home.
If you are conidering buying a property in Spain and would like assistance on avoiding the pitfalls of buying a property in Spain, please do be in contact with us.
A version of this article originally appeared in the September 2014 edition of A Place in the Sun Magazine
