Stage 1 - Making an offer

An offer is generally made via the estate agent, who in turn contacts the vendor. It is important to realise that once your offer has been accepted by the vendor things can move fairly swiftly.

By the time you make an offer on a Spanish property you should have chosen a Spanish solicitor (known as an ‘Abogado’) to represent you. Naturally it is best if you use a solicitor who is not only fluent in English, but is also familiar with the UK legal system, as he or she will be better able to advise you.

Once your offer has been accepted you will need to instruct your solicitor to make a number of enquiries and searches on your behalf, to make sure that the person selling the property is legally entitled to, that the property is all it has been purported to be and that there are no outstanding debts, charges or legal proceedings pending. Whilst this is happening the vendor’s solicitor will be drawing up the contrato de compraventa, which is a legally binding private contract setting out the parties to it, the description, size and boundaries of the property, along with the conditions of the transaction – price, deposit, balance and how this is to be paid, date of the sale, warranties, who pays the costs and taxes etc.

Stage 2 - Entering into a private contract

Once your solicitor has completed his searches and is happy with the terms of the private contract the exchange can take place. This is stage two and normally occurs 2-4 weeks after the formal acceptance of an offer. It is usual for the buyer to pay 10% deposit at the time signing the private contract; however this is negotiable with the vendor. The deposit is paid into a bonded client account via your solicitor. Never pay deposits direct to the vendor.

At this stage it is important to ensure that the deposit is paid under a specific agreement called an ‘arras’. An arras agreement states that should the buyer withdraw he will lose his deposit, but if vendor decides to withdraw he will have to return double the amount deposited. If such an arras agreement is not entered into, the only recourse if either party fails to complete, is to sue the other for breach of contract.

If a buyer has the full purchase monies available, is happy that there are no legal problems, and both parties wish to complete immediately, it is possible to dispense with the private contract stage and go directly to a notary and ask him to make an escritura de compraventa, which is the public document that is registered at the Property Registry. Each of the larger towns in the Province of Granada has a Notary’s Office.

Stage 3 - Completion in front of a Notary

Assuming however that a private contract has been signed and a deposit paid, your solicitor will proceed to stage three and arrange an appointment with the local notary to convert the private contract into a public deed by Escritura Notarial (notarial act), whereby the notary witnesses the signing of the already prepared escritura de compraventa (deed of conveyance).

The notary is a public official: his role is to ensure that the relevant Spanish legislation has been complied with, that the necessary transaction taxes have been paid, to certify that the contract has been signed by both the vendor and purchaser and to certify that all the money has been paid. He does not advise the parties on the transaction, nor does he check that statements made in the contract are true. It is the solicitor’s responsibility to do this.

All parties to the contract must be present to sign the escritura at the notary’s office, including a representative of the bank if the purchaser is arranging a mortgage. If a person cannot be there, he must arrange a power of attorney, to allow someone else to represent him.

At this point the balance of payment is made and possession passes to the buyer. Finally your solicitor will arrange payment of taxes and fees, and the escritura de compraventa is inscribed in the Property Registry in Madrid, when it becomes an escritura publica, providing official proof of ownership. It can take up to 8 weeks for the deeds to come back; whilst you are waiting the notary will give you a copia simple.

A copia simple is, as the name suggests, a simple copy of the escritura. It is the document the buyer needs in order to pay the plusvalía (if this is not being paid by the seller) and to transfer or register for contribuciónes (these include payments towards the local rates), electricity, water, telephone or other services, change the address on his bank account etc.