Prior to viewing
Before arriving in Spain you should make sure that you have at your disposal sufficient funds to cover the reservation sum on a property. If you do not have the means to lodge a reservation sum immediately, you risk losing the property to another party who does have the reservation sum available. The absolute minimum required is normally 6.000 euros, but may be up to 12.000 euros for higher priced properties. The reservation sum may be paid with a credit card or cash. A cheque, if drawn on a foreign bank account, may take up to ten days to clear by Spanish banks. The deposit is refundable if the vendors change their mind but is not refundable if you cancel.

Choosing A Property
It is unwise to mix a holiday with a property purchase therefore you will find that Ocean Estates International offer discounted viewing weekends. Consider the frequency with which you will use the property, think about the distances from airports, rental potential and long term investment - establish a budget and remember to add ten percent to the purchase price to cover fees associated with the buying process. Acquiring the home of your dreams shouldn't cause a headache providing the research is thorough. If unobstructed views are a priority, consider homes which are beachfront, frontline golf or in elevated positions and always ask if further development is planned for the area. The southern coast of Spain offers top calibre golf courses, superb build quality and much improved infrastructure - not forgetting the best climate in Europe.

Negotiating The Purchase
Once a suitable property has been chosen, the first step is to make a verbal offer. The purchase terms and price may need to be negotiated with the seller.

Appointing A Lawyer
There are many excellent local lawyers in Spain who are fluent in your language. A lawyer will provide the legal guarantees for the purchase of the property ensuring that Spanish legal requirements are met and that the property is bought free of encumbrances, charges, liens or debt and is up to date in all its payments of local contributions and community charges etc. The lawyer may also assist the estate agent in difficult and complex negotiations with the owner. Lawyers will tell you in advance what their fee will be - usually between one and two percent of the purchase price. Using a lawyer from your home country will substantially increase your legal costs and most certainly delay the sales process.

Exchange Of Private Contracts
Upon acceptance of the offer by the owner the next step in the process is to exchange private contracts of sale or to sign an option to purchase. This normally takes place within two weeks following formal acceptance of the offer. Your lawyer will have completed his searches and investigations of the property and will have arranged with the owner the procedure for the cancellation of any outstanding debts. The private contract of sale or option will reflect all the agreed terms of the offer and sale and set out the date for final completion at the notary. At this stage it is usual for the buyer to pay a ten percent deposit of the purchase price which is non refundable.

Completion At The Notary
A sale is formally completed in Spain when the public title deeds of purchase are signed before a notary, the final payment made, and possession given to the buyer. On the assigned day, the buyer and the seller (or their authorised representatives) will attend the notary's office to sign the title deed Escritura de Compraventa. At this point the payment of the remaining balance is made and possession passes to the buyer with the handing over of the keys.

Registration
Once signed, the notary will fax a note of the title deeds to the local land registry. Your lawyer will also arrange payment of all the relevant transfer taxes associated with the purchase and will handle the formalities of registration of your title deeds. Final registration of the deed may take up to two months. Similarly, your lawyer will arrange for the transfer of accounts with local suppliers of utility services, such as water and electricity, and organise their payment through a local bank.

Formalising The Offer - Reservation Deposit
Once there is a verbal agreement between parties, the next step will be to formalise the terms of the offer in writing. It is normal practice in Spain to include with the offer a reservation deposit until the exchange of private contracts. Paying the reservation deposit guarantees that the property is taken off the market and is reserved for you at the agreed, fixed price. This initial reservation deposit will be held in your appointed lawyer's client account. This money is protected until the time of completion and is never given directly to any private vendor.

Costs Involved In Purchasing A Property
There are, in principal, three fees and two taxes to pay when purchasing a property in Spain. As a rule of thumb, you should estimate that the combined total of these amounts to be around ten percent of the purchase price.

THE FEES

- Legal fees: Usually between 1% and 2% of the purchase price whichever is the greater, plus value added tax (IVA) currently charged at 16% on the fee amount.

- Notary fees: the scale is fixed by law and normally range from 300 euros for lower priced properties to 1200 euros for higher priced properties.

- Land Registry fees: Generally about 20% less than notary fees.

THE TAXES- VAT (IVA) or transfer tax (ITP):
ITP applies to resale properties only. IVA applies to off-plan properties. Both are currently at 7%. Stamp duty (AJD) of 1% is payable when purchasing off plan.

- 'Plus Valia' is a local municipal tax and is based on the officially assessed increase in the value of the land since the last time the property changed hands. This tax is normally payable by the vendor, but it may be stipulated that the buyer pays. This tax may range from a few hundred euros to as much as several thousand euros on larger properties with a lot of land. Who pays this will be discussed in the negotiations and in consultation with your lawyer.

Frequently Asked Questions
1. What if the Property is not entirely Residential?
As long as the property, in our view, is substantially residential we will arrange a Title Deed Insurance Policy to cover it.

The maximum payout under the Policy is 360,000 Euros - What if the Property that I am buying is worth more than 360,000 euros, can you still cover it?
Yes, and of course all legal procedures and expenses are undertaken and paid for by Title Deed Insurance. Remember, there are 3 remedies, that arrive in 2 waves: Wave 1: We cure the title defect permanently in 6 months. This will solve the vast majority of Claims. You only go on to Wave 2 if we cannot cure the title defect within that 6 months.
Wave 2: At the Insured's choice, either:

• The Insured keeps the Property and claims the drop in value (indemnity) caused by the title defect
  OR
• The Insured demands that Title Deed Insurance purchases the Property

All 3 remedies are subject to a financial maximum, as the Policy will cover actual financial loss up to the LESSER of :

• The purchase price in the Escritura.
• the valuation on the date the policy is issued
• 360,000 euros.

2. What if I am buying a Building Plot?
The Title Deed Insurance Policy is put into force on the date of the Escritura. On that day there must be a dwelling erected on the property to qualify for the policy. So: if you are buying a new property from a developer/builder, as long as the dwelling is built by the time you sign the escritura (which it should be), we are able to issue a Title Deed Insurance Policy.

These points are added for your information only. We do not claim this to be the entire property purchase process nor do we imply directly or otherwise that following these points will guarantee a problem free purchase. When purchasing property it is the buyers responsibility to read the terms and conditions of any agent or lender.