FAQ: Buyers

The “Buyers” category is designed to answer common questions for people who want to acquire a property, a plot of land or generally a real estate. This category includes questions about how to find a real estate agent, how much should be expected as a down payment, what type of inspections should be done before buying, how to know if a property is in a good neighborhood, how long the home buying process typically takes, and similar questions. This type of information is essential for real estate buyers, as it will help them make informed decisions and navigate the buying process confidently.

Buying a property is a major investment, so we must ensure that everything is in order. Conducting a series of inspections before making the final decision is key, which is why it is recommended to carry out the following:

1. The Property's Technical Inspection

This is the most important inspection. A qualified architect or technician is the professional in charge of carrying it out, and they review the structure and foundations; the roof and coverings; dampness; and installations. In short, the general condition of the property.

2. Additional Specialized Inspections, depending on the type of property.

  • Pest control: This is vital for older or wooden houses, especially to detect the presence of termites.
  • Gas and chimney inspection: If the property has gas systems, it's crucial to ensure they function correctly and comply with safety regulations.
  • Energy Performance Certificate (EPC): In Spain, this is mandatory for selling or renting. It informs you about the property's energy consumption and efficiency.

3. The Legal and Administrative Inspection

It will be essential to have a specialized lawyer. He or she will be in charge of:

  • Title verification: Confirming that the person selling is truly the owner of the property and that there are no other owners.
  • Charges and debts: Checking in the Land Registry through the Nota Simple if the property has mortgages, liens, or any other pending debts.
  • Status of IBI and community fees: Ensuring that the IBI (Property Tax) and the community fees are up to date.
  • Permits and licenses: Confirming that the property has the certificate of occupancy and all necessary construction licenses.

Carrying out these inspections will also be an investment that will protect you from future problems and unforeseen expenses.

When purchasing a property in Spain, the first payment is usually made under the deposit contract (“arras”), which typically amounts to 5%–10% of the total price. This sum is deducted from the final price at the notary’s signing.

If the purchase is financed through a mortgage, banks generally cover up to 80% of the property value, meaning the buyer must contribute at least 20% from their own funds.

On top of this down payment, the buyer must also consider the additional costs and taxes related to the transaction (Property Transfer Tax or VAT + Stamp Duty, notary, land registry, and administrative fees), which usually add another 10%–12% of the property value.

In summary, to purchase a property in Spain it is advisable for the buyer to have around 30%–35% of the total price available to cover the deposit, down payment, and expenses.

The decision always depends on your personal situation and long-term goals; there is no single right answer.

Renting is a better option if you are looking for:

  • Flexibility: It allows you to move easily without the complications of selling a property.
  • Lower initial costs: It requires less capital than a down payment and initial expenses.
  • Less responsibility: The owner is in charge of maintenance and repairs.

Buying is a better option if you are looking for:

  • Building equity: The property becomes an asset that can increase in value over time.
  • Stability: It offers the security and feeling of having a long-term home of your own.
  • Control and freedom: You have total freedom to personalize and make the modifications you want to your home.

To make the final decision, the best option for you will depend on your personal circumstances, such as your financial situation, the real estate market in your area, and your long-term plans.

Consider the following questions: Do you have enough savings for the down payment and initial expenses? Do you plan to stay in the area for a long time, or do you expect to move soon?Are you able to take on long-term debt and greater financial responsibilities?

Real estate investment refers to the purchase, possession, management, renting and/or selling of properties with the goal of obtaining income or profits. There are several ways to invest in real estate, some of which include:

  • Purchase of a property to rent it: This is one of the most common methods of real estate investment. The investor buys a property and rents it to a tenant with the goal of obtaining regular income in the form of rent.
  • Purchase of a property to sell it later at a higher price: This is another common method of real estate investment. The investor buys a property with the goal of selling it later at a higher price.
  • REIT or "Real Estate Investment Trust": this is a form of real estate investment that refers to an investment fund that specializes in investing in real estate, instead of stocks or bonds.
  • Crowdfunding real estate: This is a recent method of real estate investment in which a group of investors collaborate to purchase a property or real estate project.
  • Purchase of real estate in development: This is a method of real estate investment in which an investor buys a piece of land or a building with the goal of developing it and selling it later at a higher price.
  • Purchase of units in an apartment building or office building: This is a method of real estate investment that refers to the purchase of units in an apartment or office building with the goal of obtaining regular income in the form of rent.

Each of these methods has its own risks and benefits, and it is important that an investor thoroughly researches and understands any option before making an investment decision.