Buying process of a property in Spain
Which steps to take when you have a verbal agreement?
Reservation contract. At the moment you agree upon price and other basics, the seller has to take the property of the market. This is done by the so called signing of a reservation contract and the buyer has to make a deposit of usually € 6.000. If the buyer in a later stadium decides to cancel the purchase he will lose the amount paid. If the seller changes his mind he will have to repay double the amount of the deposit.
Due diligence. After signing the reservation contract the lawyer will start investigating all the paperwork. Amongst other things, the lawyer will look if all the necessary licenses are in place, are all taxes paid, how about the owners community, is the property connected to for example water and electricity, etc. If it concerns a new build property usually 20-30% of the total purchase price plus VAT has to be paid, instead of 10%.
Private contract. After all parties involved are satisfied with the outcome of the due diligence, a private contract will be signed. Usually the buyer transfers a total of 10% of the purchase price. In the private contract will be stated exactly what will stay behind in the property, the date of the transfer of the property, etc.
Notary. At the notary the remaining amount will be paid to the seller, the public deed will be signed and after the new owner is registered the property is officially transferred.