Essential Guide to Buying Properties in Spain

26th September 2024 · 5 min. read

Purchasing a property in Spain, especially a high-end one, requires knowing the legal steps and procedures to follow. Below, we provide an outline of the 8 essential steps to ensure a successful purchase.

1. Search: At Christie’s International Real Estate Madrid, we will help you find the perfect property that meets your needs.
2. Negotiation: Where possible, we will aim to negotiate and improve the initial price offer.
3. Reservation: Our legal experts will guide you through the signing of the reservation agreement.
4. Verification: The seller must provide a simple note and settle any outstanding debts related to the property.
5. Financial Verification: The buyer must prove their financial solvency.
6. Signing of Private Agreement: A written agreement will be reached between the parties involved.
7. Deed Signing: The purchase will be formalized in front of a notary.
8. Registration: The new owner will be registered at the Land Registry.

Now, let’s go into more detail for each of these steps.

At Christie's International Real Estate Madrid, we specialize in finding and managing the most exclusive properties in Spain's luxury real estate market. Our team of experts, with in-depth knowledge of the sector and the needs of discerning clients, will assist you in finding the perfect property that meets your expectations. With a global presence in 50 countries and a multicultural team, we are well-positioned to offer you the best opportunities in both the Spanish and international markets.

In many cases, buyers may choose to make an offer below the asking price. While this strategy doesn’t always succeed, it may be accepted in certain circumstances, such as when the property has been on the market for an extended period or needs to be sold urgently.

Our team, with extensive market knowledge, will advise you when it’s appropriate to make an offer and when it may not be advisable. It is important to note that developers of new projects usually do not accept such discounts.

Once you’ve selected the right property, the purchase process begins with signing a reservation agreement or a deposit agreement ("arras"). Both agreements remove the property from the market and lock in the purchase price. Though they differ in the consequences of non-compliance, both commit the parties to completing the purchase.

The reservation amount typically ranges from 1% to 5% of the property’s value, and the safest way to make the payment is via bank transfer or credit card. After the deposit is made, there are 14 days to proceed with the signing of the purchase contract. It’s important to note that, according to Law 5/2019, the buyer must go to the notary at least 10 days before the public deed signing so that the notary can thoroughly explain the mortgage conditions and related documents. This process ensures that the buyer fully understands their obligations, which can add a few extra days to the signing process.

During this two-week period, our legal team at Christie’s International Real Estate Madrid will investigate the legal status of the property to ensure no outstanding debts exist. The seller must provide a simple note from the Land Registry, certifying ownership and any encumbrances on the property. They must also provide proof that all taxes and fees (property tax, waste collection, community fees, utilities, etc.) have been paid up to date.

As the properties offered by Christie’s International Real Estate Madrid are aimed at clients with high purchasing power, it is essential to verify the buyer’s financial solvency. Depending on the client’s profile—whether a senior executive, a well-established entrepreneur, or someone generating income from their assets and rental properties—this verification is essential to ensure the viability of the transaction.

If everything is in order, a private purchase agreement will be signed within the following 14 days. This contract will set the final price, provide a detailed description of the property, include the information of the involved parties, and establish the date for signing the public deed before a notary. The buyer must provide a deposit of 10% of the property's total value. In case of non-compliance by the seller, they will compensate the buyer with double this amount. However, if it is the buyer who defaults, the deposit will not be refunded.

This is the final step in the transaction between the buyer and the seller. The property will legally transfer from one owner to the other. It is essential that all documents are in order for the notary to consider the transaction finalized. From identification documents to the property deed and payment receipts, every detail must be thoroughly reviewed before the signing.

Once the deeds are signed, both the buyer and the seller will receive official copies of the documents. The new owner (or their legal representative) must present these documents to the Land Registry to guarantee legal ownership. Without this registration, the property will not be officially recognized as belonging to the new owner.