Buying a Property in Mallorca

Whether you’re buying your first or second home or a property for investment purposes there’s nothing quite like the property purchase buzz when your instinct tells you “this is the one”.

Is buying a property in Mallorca, the Balearics or Spain difficult? No. But like all things it is sensible to have an understanding of the process and what is happening.

If this is your first purchase in Spain, then it’s likely you will put your entire trust in the agent(s) you use.

To help you better understand the proceedure we have put together a glossary and translation of terms and requirements you are likely to come across and also a brief synopsis of the process itself.

Note: In addition to the property purchase price you should allow approximately an additional 10% of the price to pay for purchase cost such as Taxes, Notary fees, IVA, etc.

*An NIE number is extremely important to your purchase, please see our administration section. We obtain these numbers in ONE day, you will often be told they take between 30 and 60 days to obtain, this is NOT correct.

Even if you do not purchase your property or business through us we are more than happy to obtain this number on your behalf. Why?

Quite simply, we have on several occasions been asked by clients of other agencies to sort out problems produced by poor organization and non production of NIE numbers at critical stages. We would prefer not to see the resulting distress and frustration that such cavalier attitudes to these important fiscal identification numbers produce.

PROCESS:

The Vendor accepts your offer

When all negotiations are agreed you will sign an Option to Purchase Contract which is binding setting out purchase terms, including agreements on deposit, chattels etc.

If you are purchasing by cash or making your own financial arrangements, then at this point an Abogado (lawyer) should be instructed, who will act on your behalf to ensure everything is correct and properly registered. You will also be given advice in respect of a property valuation.

He will acquire all legal registration documents from various sources to prove that the property you have decided to buy does indeed represent what you have viewed and that the boundaries, size of property, terraces etc are all legally registered.

As a thumbnail guide before you sign anything or hand over a reservation deposit there are some documents that your Abogado will request and may want to see prior to a deposit being paid.

1. The title deed of the seller escritura pública and nota simple
from the Property Registry.

2. The most recent paid receipt for the IBI. It is not unusual for
receipts to be requested for the last five years.

3. The catastral certificate which gives the exact boundaries and
square metres of area.

4. Paid receipts for the comunidad if applicable.

5. Paid receipts for all utility bills.

If you have purchased through an agent who is also arranging a mortgage or loan, it is likely they will handle the complete transaction for you from start to finish. They will hold any deposit you have paid for the property and you will receive properly documented paperwork.

Gathering all relevant information from you to start the process, they will arrange with the bank the property valuation also negotiating the best loan deal for you. In approximately a week the valuation will be confirmed; in the meantime their legal representative will carry on working on your behalf checking that everything in respect of the property is in order and legally registered.

Shortly after this stage you will receive an appointment to go before the Notary to complete the purchase.

If you are purchasing a brand new property directly from a developer, buying off plan or purchasing land then there will be other requests made for the appropriate documentation.

Other ways of purchasing do exist such as buying without escritura and whilst it may be possible to establish title you will need to take expert advice which could be very costly.

Buyer Beware: It is standard practice to pay at the earliest opportunity a deposit, normally 10% to secure the property thus removing it from the for sale market. However, be extremely cautious in handing any money over or signing any papers where a third party is not involved to look after your interests.

Note: The private sale Option to Purchase Contract will under normal terms specify a completion date. This date is treated seriously so make sure it fits in with all your plans financial or otherwise; the 10% deposit paid is non returnable should you simply change your mind. Only if there is something amiss which your Abogado discovers would your deposit be returned. Should the seller back out after the contract is signed you can apply for up to double your deposit back.

Remember the above does not constitute proper legal advice and is for information purposes only to give an insight of the process and how your legal representative will be working on your behalf.