Buying a Property in Spain
Many people who have travelled abroad have felt the temptation to purchase property overseas. For example, UK residents often consider buying overseas property in nearby European countries like France or Spain, and real estate agents often locate near popular tourist attractions to sell property to such visitors.
Sometimes the price of foreign real estate can seem very attractive due to the foreign exchange rate favoring the prospective buyers’ currency. Tourists can also fall in love with a delightful travel destination, perhaps leading to an interest in buying overseas property as a way to spend more time there. Still others might be interested in investing in undervalued overseas property based on the view that it will appreciate substantially over time.
Whatever your motivation for buying overseas property, the following top five tips can help assure that you have a more positive experience in doing so.
Tip #1: Investigate the market thoroughly
Although global property price trends do occur, real estate markets in different locales can go through cycles of rising and then correcting lower, which can be independent of each other. In other words, just because property values are rising in your neighborhood, does not mean that they are also rising in Spain or France. Such trends are especially important for investors who will typically want to buy near the bottom and sell near the top of a cycle.
Furthermore, some countries prevent or limit real estate ownership by foreigners, so you will want to make sure that you have the legal right to purchase real estate in that country, and under what conditions you can do so, before handing over any money in order to avoid scams or disappointment. Basically, it really makes sense to do your homework about the real estate market in the country you are considering making a purchase before putting up your money. This includes checking the currency exchange rate and stability in the country you wish to make a purchase.
Tip #2: Obtain professional purchase assistance
Great deals can certainly be had when buying foreign real estate directly from owners. Nevertheless, if you are unfamiliar with the foreign real estate market, then purchasing through a professional real estate agent or from a reputable property developer can provide useful guidance that can help you avoid many pitfalls when buying overseas property. Such professionals typically have an obligation to see that you are properly informed about the details of the purchase. They will also usually make an effort to complete the deal and assure your satisfaction with it.
Tip #3: Hire a legal representative
Although real estate deals in your country of residence generally may not require the services of a lawyer, having an independent professional attorney representing your interests and watching out for potential legal problems can be invaluable when buying overseas property.
Tip #4: Have key documents translated
Before signing any documents relating to a potential real estate transaction, make sure that you have them professionally translated if they are written in a foreign language, such as French or Spanish, that you are not entirely comfortable reading. In general, you need to know exactly what you and the seller are agreeing to in words that you can clearly understand.
Tip #5: Saving money on mortgage payments
Once you have read, understood and agreed to the terms of an overseas property purchase, you will then need to make arrangements to pay for it. When transferring funds denominated in your domestic currency to either make a payment in full, a down payment, or a series of smaller mortgage payments, you will probably want to find a better foreign exchange solution than simply visiting your high street bank. Such local banks typically provide poor forex services, which often involve very wide dealing spreads and limited transaction sizes. Fortunately, you can usually do much better by changing your money through a regular payments service, such as that offered by UKForex.
No sale of property in Spain is valid without the presence of a notario. A Spanish notary is possibly one of the most comfortable (and profitable) professions in Spain. His (or her, although most Spanish notaries are male) role in property deals is to guarantee the legality of the sale, to certify the presence of all the papers and people required by law to be present in any property deal, to ensure that property buyers or sellers who do not speak Spanish have a representative with them to translate proceedings, and generally to preside over the signing of the property sales contract and to register the new deeds. Where as a search for houses for sale in Spain begins at an estate agent, it ends in the notary’s office. Both the property buyer and vendor (or their legal representatives) must attend the signing of the contract and the estate agent (if there is one involved) and lawyers are usually also present. If a Spanish bank is involved in the property deal, then the bank representative also attends the meeting to confirm the mortgage which is also signed in front of the notary. If, as is often the case, the value appearing on the deeds of the property being sold is less than the overall price of the sale, the notary generally turns a blind eye.