It’s even more difficult to comprehend why there are those who are rushing to buy any property at all without following proper procedure such as the surveys of the land and hiring a good lawyer or adviser who can help them look at how the investment will turn out in the long term. Some of them don’t even to look at how convenient it will be to live in the house on a day to day level, especially if it is in a remote location where it will take hours to get to the next city. However this is what many people are doing out of the excitement to live in Spain!

First up, don’t leave your brain on the plane!

The seduction of Spain shouldn’t stop you from practicing good common sense. Yes the surroundings are breathtaking and the prices are better than you would get in your own home country, and perhaps you are hoping to have an idealistic lifestyle just like your vacation,. but you have to research and take things one step at a time, and always consult with experts. This is true for buying any property in any part of the world and just because you go on vacation doesn’t mean your brain should also take a break.

Set Budgets

Be sure to create a workable budget based on the facts you have gathered on the region you want to invest in and what kind of property you’d like. And if you find something “too cheat to be true” chances are you’re right, there has to be a hitch and you should comb the contract and consult with experts to find it. Employ the same kind of logic and common sense you’d use if you were back home.

Be Careful about Fast Talkers

You don’t have to assume the worst in everyone or be overly suspicious but at least remember that there are con artists who may want to take advantage of you. Don’t be fast-talked into making a rushed choice or scrambling for cash because it’s “now or never”. If you are confused or uncertain in any way, slow down and find information or take time to think about it.

It’s important to get the best possible international mortgage or property finance package so that you can save what can add up to tens of thousands in interest.
Read these tips to help you find the best and simplest finance method. It’s not that hard to make the search. Some of the best loans and repayment vehicles are being offered on the Internet so you can do your research at home at any time you please.

The initial step is to survey the different kinds of f finance arrangements for international mortgages. This will five you an idea of which one is applicable to your situation and needs.

As for international mortgages, your choices will be influenced by the country you’re interested in buying property in and your own financial situation. There are probably lenders in your area that offer straight mortgages for buying property abroad. HSBC has packages for Britons interested in buying in France while Lloyds TSB has a product for Britons who would like to buy a property in Spain.

Mortgage types and repayment methods are pretty much the same at the core, whether they are for local property or property abroad, but what you will have to check is the additional criteria for buying off shore. For example they may require that you already have a home in the country before shopping for any places in another land. Sometimes they won’t cover the whole price but will only give up to seventy percent.

But if you’re trying to secure a loan from a local bank then the rule of thumb is to go to a bank that has several branches in different countries or has affiliations with another country.

For expatriates, expat mortgages help you to purchase ‘back home’ either for your own personal investment or to act as a base if you plan to visit there regularly. If you had a strong credit history this shouldn’t be a problem and there are many banks that want to lure expat business. You will probably be able to get 85% of the loan if you have proof of income. But as a rule if you’re not a resident of the United Kingdom you may have a hard time getting a non-status or self certification loan.

Britons’ First Choice

A recent study conducted by Barclays Bank and the University of Navarra Business School, showed that sixty five percent of Brits call Spain their first choice, while another 38% say it is their only choice. The facts support this study. In early 2005, the town halls in Spain showed an increase of nearly thirty percent more British residents.

Better Buyer Protection

You may have heard of scandals where people were entangled into disastrous off plan purchases. These buyers chose to invest in properties that (as they later discovered) had planning irregularities. They tried to recover their deposits but could not negotiate for a settlement with the developer. Unfortunately the legal system in Spain is more bureaucratic than the legal system in England, but there are steps taken to return the money to the buyers.

The Spanish government has promised to make improvements in the country and to provide better protection to buyers. Recent scandals have made the issue more prominent and have helped people more conscious of the problem. The recent elections will also hopefully lead to a new era of well managed and sustainable development which in turn will improve overall quality of life.

However the buyers themselves have to be careful of scams. For example there is a common marketing toolk where people try to sell you properties with a rental guarantee, but the reality of the matter is that the “guarantee” was simply made by bloating the property rates by the level of the required guarantee. This would then be returned to the buyer within an agreed upon timeframe. Some committed a six percent guaranteed yield, but with a price increase of 12 percent! In this case people have to read the fine print and do the math.

But despite the occasional crook (and you’ll find them anywhere, even outside of Spain) Spain continues to be one of the best real estate prospects, especially with new laws and government policies that are consumer-friendly. Just be careful of being fooled by hype and exercise caution and common sense when buying a home. After all you can’t expect the law to protect you if you don’t try to protect yourself.

The deposit document is understood as a kind of purchase sale-contracts and thus has the same kind of legal systems and policies involved in the latter. So if there’s a problem either the seller or the buyer can sue for damages. The deposit is normally processed by a real estate agency,

What’s in a typical deposit document? You will find here a description of the identity of the vendor, the property and price. In these situations, a purchase-sale contract is set up the moment an offer is made and accepted by the concerned parties. Do note that the law in Spain doesn’t provide for the parties to withdraw unilaterally. But it is also part of the Spanish purchasing process that the lawyers will create a more comprehensive document that creates the option to purchase. Another thing they can do is to set up an “arras” contract which present the significant differences as to the effects and remedies of the parties.

Another thing you need to know about the reservation sum contract is that it allows the person planning to buy the property to make his offer according to his particular situation. Take this scenario: the buyer can include the specific phrase “subject to sufficient mortgage granted”, or subject to “property sold together with furniture for the offered price.” If the vendor or the agency (whatever applies to the buyer’s set up) accepts these terms the deal is finalized.

You may experience setbacks if the vendor or his representative first agrees to the condition but suddenly shifts gears in the middle of the process. Let’s say the vendor wants the buyer to handle all the costs related to he processing of all documents while the buyer feels that he should only pay the reservation sum.

Conversely, the person who bought the property may give a very large payment and sign a ‘contract’. With the assumption he is now the legal owner of the property, he sells his home in the U.K., shuts down his bank accounts, moves his money to a Spanish bank, has his furniture sent over, and when arriving on the doorstep of his property, discoversthat the agency didn’t inform the vendor of any deposit left with the agency and doesn’t plan on giving up the of place for that ‘agreed price’. All he has is his instruction to sell slip, which doesn’t bind him to honor the agreement. You can avoid this scenario and all the other problems that you may encounter by hiring a lawyer-advice equally applicable to buyers and sellers.

A Beach Paradise

Statistics and independent surveys show that an increasing number of people are considering buying a summer home in Spain. There are so many properties to pick from. There’s the 100 kilometers around the airports in Malaga, Granada, Murcia Alicante or Jerez, which have very convenient toll free roads leading to the Costas. Don’t forget the immense expanses of farmland in between. These include the famous Costas del Sol and Blanca but also include the increasingly popular Costas Calida and de la Luz.

One of the major players in the property rental and sales markets in southern Spain is the brilliant blue seas by the Straits of Gibraltar which has become even more accessible with Britain’s shared use of the Gibraltar airport. Thus there will be many low price carriers to bring people into the areas of Western Costa del Sol and the Costa de la Luz.

A COUNTRY ESCAPE

Spain isn’t just famous for its beaches. If you go inland, you will find that the towns and villas there are very picturesque, tranquil and full of history and culture-and both the visiting tourist and the person looking for land to buy will be able to find very affordable properties (seaside areas are usually more expensive).

It’s no mystery then that property buyers are more open to buying rural properties instead of the expensive coastal properties. However do take caution when buying there. Consult with a lawyer for legal advice. Choose someone who lives in the area where you will buy in so that he knows the ins and outs of that area. Why is this so important? Country land is not always supervised by local authority denomination. The outer boundaries of a property that has fallen into neglect may be used as a way of extending “reformed” property. There are also cases where a large property has been divided among the heirs of the original owner. This can lead to the property having a backlog of unpaid inheritance taxes and the delays of having to change the title under the name of the heirs before a legally recognized title can be given to the new buyer.

It’s clear that confidence in Spain’s real estate may have been smeared by cases of illegal property sales but with proper caution there’s no reason why you can’t buy your place in the Sun. With the proper research and consultation the process will be less stressful. Furthermore the joy of living in Spain is worth the effort.

You can avoid this crime by registering the deed in the Land Registry so you are protected by the law. Furthermore, lodging all monies with the vendor’s lawyer will fraud proof your transaction. The Public Deed also transfers possession from vendor to buyer, though there are instances when the buyer allows the vendor to stay in the property after signing. But we highly discourage this as the vendor can suddenly refuse to leave the property. One way to take future precautions is to subtract from the purchase price an amount that would cover the legal costs of the eviction procedure.

These are just some of the reasons why you need the intervention of a Notary Public and Land Registry when you buy a home in Spain.

Getting a Lawyer

There is a big difference between the Notario with a lawyer. The Notario is a public notary and a government official who helps verify the form as legally binding. He does not verify or guarantee the accuracy of the statements within the contract. You still need a lawyer to act as the protector of your interests. Always hire a lawyer for buying real estate. The legal fee is well worth it as you protect yourself of what is at times can be very big headache and possibly a nightmar. After all you’d get legal help if you bought property at home so you should also do the same when buying property in Spain.

Dealing with Lawyers

Look for Spanish lawyers who are very fluent in English, among other languages, and have a background in dealing with foreign purchasers and advising on their property transactions. To get a good one, always check the personal recommendations and do research on the company. You can also ask the British Consulate for a directory of lawyers who speak English. The legal fees amount to one percent the value of the transaction, unless there are some unusual complications.

There are advantages to doing business with a Spanish bank. While this requires additional coordination the effort pays off as you can take advantage of many benefits because of Spain’s general thrust of encouraging real estate investment by foreigners. It is in the bank’s best interests to grant mortgages to foreign investors, and you do away with the risk of your mortgage lender not knowing anything about local laws.

An increasing number of people are buying property in Spain are getting their mortgage with a Spanish bank It’s not just expatriates or people moving to Spain. In fact you will see a great deal of property investors, regular visitors to Spain etc.

Most of these people go to Spain’s two leading banks, both of which have an extensive range of mortgage products.. Caja Madrid, Spain’s second largest savings bank, is known for its special low rate mortgages and the superior way of serving customers. It has an extensive network both nationwide and around the world. The second option, Bankinter, has the best electronic banking facilites available in Spain. You can try to secure a mortgage offer from both then compare packages and weigh pros and cons.

Caja Madrid

In the last few years, Caja Madrid made huge investments in its services and operations to build a reputation for high standard, personalised lending services with very competitive rates, especially for non-residents. The online banking service has significantly improved, and they give advice and service over the phone. They also have a specialised staff who have been especially trained to handle the transactions of non-Spanish speakers in their native languages.

Caja Madrid is also has a policy of giving a reply within 24 hours of receiving their mortgage enquiry (in fact it can arrive on the same day if you send the query before 2:00 pm and give a phone number). They will also provide step-by-step instructions on the loan process.

Bankrinter B

Bankinter has some of the best international e banking facilities. They provide telephone banking services in Spanish, English and German. They have Internet banking facilities and will provide it the same day you open the account. You can even open an e-account through the web. They will process mortgage applications within 2 days and have good interest rates.

Depending on your country of origin, after living in Spain for several years you are no longer seen as a tourist and should apply for a residence permit. This is renewed every five years.

If you want to get a residence card then go to your local police station or “oficina de extranjeros”. Since the laws can vary in every region of Spain do drop by the office to get a list of exactly what you will need to present.

Do you have to wait for a long period of time before getting your card? It depends. The duration and processing time differs from town to town and can be days, weeks or even months in smaller towns. However, you should be given a document that certifies that you have applied for residencia, which acts as a temporary residence permit.

If you’re an EU Citizen

Since 1 March 2003, there are two types EU citizens who no longer need to hold residence cards: those people who are legally working in Spain and currently paying Spanish Social Security; also, retired workers who are qualified for a Spanish State pension who have lived in Spain for more than 36 have worked in the 12 months before retirement. However the residence card is always useful as easy proof of your status so you should consider getting a document anyway.

EU citizens don’t have to show proof of income nor that they have medical insurance but should present a: completed application form, four photograph, and passport plus photocopy.

If you’re not an EU Citizen

Non-EU citizens will need proof of income, a clearance that shows you have no criminal record, a medical certificate and medical insurance from a Spanish company, your passport and photocopy; three passport-size photos; payment of fee (not high);Spanish bank statement showing income arriving from abroad; deeds to Spanish property or a rental contract, plus photocopy; and a completed application form.

You may also need to show your employer’s documents and will have to process a numero de identification de extranjero (NIE), which identifies you to the Spanish tax authorities.

Time and again you hear stories of usually logical and rational people buying up “cheap” property abroad without any consideration. They skip important steps like doing surveys on the property, or they are insensitive to the neighbours and upset everyone with their renovations. They don’t even check to see if they are within the property boundaries and then they suddenly are “surprised” to find they havetitle deed problems.

Avoid becoming scammed (or stressing yourself out with stupid mistakes) by doing proper planning and research.

The most obvious thing is to stay in budget. Always watch the level of debt you’re exposing yourself to and how you will manage the monthly payments if ever interest rates increase, or if the income you had expected to earn from rent doesn’t come through as you had hoped. Also look at whether or not you will be able to sell at a profit if the market is deflated.

This homework is dull and tedious but it will save you a lot of grief in the future.
This sounds like common sense but you should be as careful about buying a property abroad as you would if you were buying a property back home.

And finally, do not be discouraged! The lessons we can learn from the stories of people having trouble paying off their properties or learning in the middle of the process that there are more details or paperwork than they had expected doesn’t mean that the dream of having a home in Spain is beyond reach. Rather it just teaches us a lesson, that good things come to those who work for it, with their feet on the ground and their heads set on the goal, and with plenty of common sense keeping them from rushing forward at the first offer.

To give you an idea of how the dream can come true, just look at the historical increases of property prices. In the last few decades you can really see how the houses in Spain have brought not just joy to the homeowners, but lots of income. Take a look at the property prices in Malaga and Montpellier. These regions have seen a value increase of 144% over the last four years. There are many new markets that look like they can offer the same to the investors and you just have to look out for those and do your research. These are the benefits of taking the time to find the right property market.

You will need to get an architect and/or project manager to supervise the construction and an accountant to handle the money. Contracts are usually dealt with principal contractors who will then hire subcontractors (they will usually get a commission for labor and materials). A standard cost breakdown would be as follows;

Contractor’s Labour 30
Contractor’s Materials 10
Contractor’s Specialist Materials 20
Sub-Contractor’s Labour and Materials 40

Sub Total 100

Contractor’s attendance & profit on items 3 & 4 @ 17.5% 10.50

Architect, Project Manager, Quantity surveyor, Accountant @ 9% 9.95
Grand Total 120.45

Most construction projects will take a year starting from the initial design to the actual construction and finishing. But this is assuming work doesn’t stop but in most cases there are pauses as the client reviews the construction or asks for renovations. This will definitely increase your additional costs. It is much more advisable to really make sure that the construction is done continuously and that any delays are avoided.