Selling Process - A Selling Guide
Step 1 - From the day your purchaser puts the deposit down to the step 2 is normally 2-4 weeks.
After successful negation, the purchaser pays the reservation deposit (usually between 3000 € – 6000 €) and signs the reservation agreement. This takes the property off the market for your purchaser while their lawyer does the legal checks. You agree to withdraw the property from the market for a set time, allowing the purchaser to check the legal viability of the property and to arrange a mortgage or other funding as necessary. You will be required to supply certain legal documentation in preparation of the sale/purchase. The reservation deposit is usually held by the agent until Step 2.
Step 2 - From this step to going to Notary the timing is usually determined by you and the purchaser, (eg how long you need the purchaser needs to arrange their funds, how soon both parties can move etc), but is normally within 6 - 8 weeks.
After paying the reservation deposit, the purchaser should instruct a lawyer to perform checks on the property to establish its legal viability. These checks will ensure that any debts on the property are known and allocated to the vendor and that the property is duly registered and fully legal. The lawyer will draw up a pre-sales contract ('contrato de arras' or 'compra venta') which will confirm exactly what is being bought/sold, the timescales of the sale and the 'arras' deposit. At the signing of this contract, the purchaser will pay the balance of the deposit (usually 10% of the selling price less the reservation deposit already paid) to the vendor. This contract is legally binding for both parties. If the purchaser does not continue with the purchase, they lose their deposit, if the vendor does not continue with the sale or if the property cannot be made viable to sell by completion deadline, the vendor will be required to return the purchaser original deposit PLUS pay the same in compensation.
Step 3 - Completion of the sale at Notary.
After the signing of the pre-sales contract, more checks or legal paperwork may be required. On the day of completion, both parties, or their legal representatives with Power of Attorney, meet at the Notary. A Notary is an expert in Spanish law, legally trained and mandatory for any property transaction in Spain, they are employed by the government and so officially do not act for either the purchaser or vendor and it is their job to validate the documentation related to the sale and purchase. They will ensure that all the paperwork is in order before witnessing the transfer of funds and signing the title deeds of the property over to the purchaser. Both parties will be issued with a temporary copy of the deeds called a Copia Simple.
Step 4 - Within one month of purchasing the property the property will be legally registered in the name of the new owner at the Property Registry.
After the purchaser has bought the property they have one month in which to pay the relevant taxes (transfer tax in the case of a resale property and IVA in the case of a new build). It is usual for the purchaser’s lawyer to organise this and also to register the new ownership of the property at the Property Registry.
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