A hectic buying process in Spain
You came across a beautiful property during an unexpected house hunt on your Spanish holiday. A property entirely to your taste, with the expected garden and swimming pool. Amazing! You cannot hide your enthusiasm from the estate agent and selling party. You want this house!
The realisation that you actually still have a lot to arrange and research comes only when you are back home. All sorts of questions run through your mind. Am I eligible for financing? Is it a nice neighbourhood to stay in?
Straight to work then?
However, there is not much time to think about it. After just one hour, you will receive the reservation contract from the estate agent to sign and make a deposit of €3,000. This indicates that the selling party also has another buyer. This buyer has a lower offer than you, so you have first choice.
You will then have to decide quickly, the email says. What could go wrong? Surely that mortgage in Spain will come through? This house meets all my needs and I will surely never come across a house like this again! The same evening, the contract is sent signed and the deposit transferred. This can't go wrong anymore!
Quick buy = expensive buy
Five months later, you had hoped to make a better consideration at the time. Applying for funding does not appear to be the same as in the Netherlands. The mañana mañana culture is something you are not used to as a Dutch person, which has caused many frustrations. The selling party is not satisfied either, they do send an email every other day asking if they can continue...
The 10% down payment you dare not make, because what if you don't get that financing after all?
Thankfully, after 6 weeks, your application has finally been approved. You can breathe a sigh of relief once again. The 10% payment is therefore quickly made, because what if the house is soon gone? Now only the valuation remains and then you can enjoy your Spanish home.
Saddened, you look at the state of affairs 3 weeks later. The valuation report has been delivered. The square metres of the property appear to be only half registered in the Spanish land registry. As a result, the valuation is based on half the actual value, making the appraisal value even 20% less than the purchase price.
What does this mean for your mortgage?
A Spanish bank always provides financing based on the lowest value of the property, which makes your mortgage look completely different. You suddenly have to bring in a lot more equity... The plug has to be pulled.
Since Spain often does not include a reservation of financing, you won't see your deposit back either.
So how do you prepare?
Situations like this are all too common. Dazzled by the Spanish sunshine, people enter the Spanish buying process unprepared. Putting unwanted pressure on the buyer to sign a contract is very common in Spain and also regularly by Dutch-speaking estate agents, resulting in unpleasant situations.
Good preparation is worth gold!
Don't be naive and make sure you are well prepared first and only then make the move to buy. This avoids a lot of frustration, time and unnecessary costs.
Even without a property, you can already get a lot of security from a Spanish bank in terms of financing/mortgage. One possibility is a mortgage indication through Spain Purchase Guide. Keep in mind that a mortgage is always based on your financial situation as well as the collateral. A mortgage is not final in Spain until it is passed.
In addition, make sure the right people help you buy your Spanish property. Get good advice from experts on this. For example, a lawyer can be worth double his fee by his legal support.
Prepare yourself with our online help
Want to avoid a slow and complicated application process at a Spanish bank? Then arrange your own mortgage through Spain Purchase Guide. We arrange the following for you:
- Whitepapers and guides to arrange your own mortgage
- Smart online calculation tools
- Q&A via our e-mail ticketing system
And in the case of our mortgage service:
- A prepared file towards the bank
- Connections with the right person in the right place
This is how you arrange your mortgage better and partially yourself!