The market in Costa del Sol
Are you looking for a property abroad but just not sure where? You will find some of the good arguments why we think Spain and Costa del Sol is the perfect choice in our area guide here. In this section you will also find a more thorough description of all the different areas of Costa del Sol.
In short Costa del Sol of course benefits from the sun and a beautiful climate, the wonderful sea and the warm sand! But there is so much more, depending on which location you are looking at. There are tranquil white villages (pueblo blancos), towns and cities for culture and exciting nightlife, contemporary villas in gated estates or traditional country houses in the countryside. And you have of course the relaxed Spanish way of life, the delicious cuisine and the excellent and affordable vine. As close to Africa as you can get, yet close to all parts of Europe.
The good news is that after the economical crack some years ago Spain seems to have turned the economic corner and there has been a definite increase of interest in the property market. But this time the economical situation is much healthier, and the banks also have a much more sensible approach to the market.
There is no doubt that Spain is an affordable and popular destination for those looking to move, whether they are planning to work, retire or whether they just want a holiday home. There is also an investment opportunity regarding the holiday lettings market and in the high-demand areas new building projects have started and are actually selling out quite fast. This is a really good sign that the market has turned. Costa del Sol is still the most popular place for people looking to buy a home in the sun and it is the favourite place for second home owners who are once again setting their eyes on Andalucía.
Estate agents in Spain
The estate market in Spain is very different than in most other countries.
In most countries every property has one agent, and no one else can sell this property, a much more regulated market. In Norway for instance the sellers first pick out the agent that they want to use and sign a contract with this company. This agent has the responsibility to market the property in the right channels, and only this agent can sell the property.
In Spain it is the other way around. As a buyer you first have to find the agent that you want to cooperate with. This agent can sell you absolutely all properties that are on the market.
What is important when choosing your agent?
If you are a potential buyer finding the right property can be difficult and maybe scary unless you have expert help and assistance.
First of all you should choose an estate agent that understands the market on the Costa del Sol. Secondly it is important that the agent you choose listens to your requirements and really understand your needs. A good agent will pre-select properties for you and also often preview them fore you if they haven´t seen them before to be sure that the only properties they show you will meet your described criteria. They will ask you all the right questions to determine your exact criteria of the property that you are looking for. Typically what kind of building, size, number of bedrooms, parking facilities, garden or not, pool or not, gated community, what kind of view, what kind of location and what amenities should be near by, area, budget etc.
A good estate agent will not pressure you at all, they will rather give you good guidance.
It is also important that the agent is open minded and communicates well with you. If you are not good at speaking Spanish and the Spanish agent is not so good at speaking English or your language, there will be room for misunderstanding. It is therefore important that you can communicate in your native language or a language that you master well.
You should be comfortable around the agent. This is an important process where you should feel comfortable at all times, whether you are looking at small or a big estate agent, the personal contact is the most important.
When you find the right estate agent for you and your families needs it is an advantage to stick with this agent throughout the buying process. All the way from viewing properties to negotiating a price and making the purchase.
If you use just one agency it gives you several advantages. You will have a dedicated agent who you will get to know well and who will learn what kind of design and features you like and dislike. This means that you dont have to explain everything every time you meet a new agent. The agent will also be dedicated to you and will stretch extensively far to reach the goal of finding the perfect property for you. A win win.
Please remember if you send a mail or phone another agent about a specific property your agent will not be able to sell you this property.
We in HAGI specialize in helping our clients find the best properties on the Costa del Sol from Malaga to Sotogrande based on their needs and specifications and at the best possible price. We think it is important to not waste our customers' time and therefore we choose to be very selective and hand pick the properties so that they will match our customers needs. We are Scandinavians and have a basic understanding of what Scandinavian customers prefer and what they absolutely do not want.
We also emphasize on good follow-up and evaluation for each view, and we dont give up before we have found the ideal property.
We are Norwegians and also understand Swedish and Danish very well. We also speak English and German fluently and som Spanish.
The estate agents in Spain dont have the formal education that they have in many other countries where the estate agent also perform the legal part of the purchase. Here in Spain you should absolutely use a good lawyer for this.
We work with Cramer Lawyers. Cramer Lawyers S.L. helps individuals, lawyers and entrepreneurs within Norwegian and Spanish law, and especially where our two countries ruleset meet. The company has Norwegian and Spanish lawyers and cover all areas of Norwegian and Spanish law.
What happens when you have found your dream property?
Step 1: Negotiating the price
When you have found your dream property, it is time to negotiate the price. In Spain it not alway so that the asking price is the correct or a realistic price, although sometimes the asking price is ok. Nevertheless, it is important to negotiate the price and the terms. HAGI estates have the knowledge to negotiate the best possible price and best terms for you that also the property vendor will accept. Often it will also be sensible to contact your lawyer in this phase to ensure that all legal criteria are being met. We will often be able to get information as to whether there have been other offers earlier and if there have been offers we can get feedback why the offer has been rejected.
Step 2: Make an offer.
When we have negotiated the price and conditions it is time to make the formal offer. We will inform you of all the purchasing costs and taxes for the actual property before you place your offer is made (see fees & taxes below). Placing an offer is very simple. Once you have been informed about the purchasing costs and accepted them, you let us know and we will contact the vendor and make the offer.
When we present your offer we will make surety do this in the best possible way to ensure the likeliness of a positive outcome. We will include the total price, the planned deposit amount, dates for the payments and terms of what is desirable to be included of furniture etc.
At this point there are mainly 2 options:
1. One is the traditional way of placing the offer verbally and waiting until the vendor answers. Once a verbal agreement is made we would proceed to the next step.
2. The second option is to place a reservation deposit alongside your offer and send the offer on contract. This usually gives you a stronger negotiation position since you are committing to your offer if the vendor agrees, but the best is to finish negotiating before making the final offer.
This process is of course subject to the property being legal and the vendor having the correct documentation. This takes us to step 3.
Step 3: Reserving the Property and legal check
When we have reached this point we have a verbal or written agreement for the purchase of your property, and we now have to ensure that the property is reserved and taken off the market. We will provide you with a reservation document for you to sign in which all the terms of the agreement are listed.
A reservation fee will be charged, the amount will vary depending on the property and vendor requirements, but it is usually 6 000 Euro. This is to officially take the property off the market and acts as an intent to purchase to the vendor. The reservation form will be sent to the vendor for signing and once this occurs the property is officially reserved. The reservation fee is non-refundable. However it is subject to legal searches, therefore if these were to not come up clean a full refund would be available. This will also be specified in the terms & conditions of the reservation form.
At this point we would highly recommend to instruct a law firm to represent you in the purchase. If you haven´t picked out a lawyer we can recommend Cramer Advokater S.L.
The lawyer will carry out all the necessary legal procedures which include but are not limited to:
- Determining who the owner of the property is to verify that the vendor is entitled to sell the property.
- Checking that the property is legally registered in the corresponding property registry.
- Checking that the property is free from charges & debts (mortgages, seizures, etc.)
- Checking that the property has been granted the corresponding municipal building permit by the town hall.
- Ensuring that the legal prescriptions of the planning and building law are complied with.
- The study, preparation and signing of private contracts (reservation agreement, option contract, sale contract) or public ones (purchase/sale deed) which are deemed necessary to execute the purchase operation. The normal procedure is to sign a private contract first, and after a reasonable lapse of time, to sign the sale/purchase deed.
The lawyer will then proceed to pay all the expenses and taxes arising out of the purchase on behalf of the client. This includes registering the public deed in the corresponding Land Registry.
Simultaneously, the lawyer will effect, when applicable, the change in ownership of all bills, supplies and taxes concerning the property, and if you wish, will arrange the direct debiting of those bills (from your own bank account in Spain).
An additional and recommended service offered by law firms is the drafting and registration of a Spanish will.
Once the lawyers have finished their legal checks they will inform you of the results, and if they are positive you move on to the next step.
Step 5: Completion
The big day has come and today you get your keys! By completion day your lawyer and property advisor will have prepared everything so that the signing goes as smoothly as possible. Completion can be done in person, however if you cannot be there you can also give your lawyer power of attorney to sign on your behalf for your new dream property.
If you wish we can accompany you to the property after completion to discuss any further services you may require, like decorators, painters, locksmiths etc. We can recommend experienced and trusted partners in all of Costa del Sol for all property needs.
Please if you need help for anything at all, we will always be happy to help you.
Buying costs - Fees & Taxes
It is important to be aware of the purchasing costs in Spain, as these are usually not included in the advertised selling price. The purchase costs are approximately between 9-13,5 % of the purchase price and the exact amount will depend on various aspects of the purchase such as if a mortgage is being taken out amongst other factors.
Approximate Breakdown of Purchasing costs:
- 10% Government Transfer Tax (ITP or IVA)(VAT) on new properties, 8 % to 10 % IVA (VAT) on re-sales depending on price category. *
- 1 % Notary
- 1 % Lawyer (may vary depending on law firm and services offered)
- 1.5 % Stamp Duty Tax (Mortgage Fees, optional, if applicable). This may vary from this depending on mortgage.
* Government Transfer Tax (ITP or IVA)(VAT)
The amount of transfer tax payable will depend upon the ‘declared’ value of the property, in other words the value listed on the Title Deed. For example, tax on a property valued under 400,000€ is 7 per cent and if valued above 400,000€ the tax will be 8 per cent of the purchase price.
This information is offered to you as a guide and should be used as such, and is not intended to replace professional legal advice. All the information offered here is approximate. Please contact us for more detailed information or questions.