Tips on pitfalls to avoid when buying a property

Kimmy11 wrote on Thu Feb 25, 2021 6:58pm:

Hi Ashoke and welcome to the forum,

There are a lot of "illegal" builds in Spain and they are bought and sold, often without difficulty, but usually to cash buyers.  To save wasting more of your time, if you see a property you like, the first question to ask the selling agent should be, "Does it have a Habitation Certificate?"...

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....  If it doesn't, walk away (you could make it a condition of sale that the vendor obtains it before your purchase can proceed, but unless they do, you're going to have the same problem with a mortgage application).  My other tip would be, don't trust what an agent tells you: ask to see the certificate; if they don't have it already, they should be able to get it from the vendor.

I could tell you some horror stories about some of the properties we looked at before we bought 5 years ago - including the lovely house in the campo on a 5,000 sq m plot.  Unfortunately, one of the problems with it being an illegal build was that it shared its electricity supply with the other 11 houses in the development.  There was no formal "community", but two of the neighbours had taken responsibility for reading the meter and then divvying up the bill by using a convoluted formula based on the size of each property - imagine if you inadvertently ticked off those neighbours?!

I've heard of other developments being legally built, with planning permission, but years later they're still on "builder's electricity" because they build, take their money and scarper, without completing the administration that allows individual owners to get their own electricity and water supplies.  A large, well-known Spanish developer has done this to my sister-in-law - twice!  She joined a Class action with many others, but after 12 years, their lawyers have had to admit defeat.  Yet, said developer is still trading and now offering "viewing trips" to the unsuspecting.

That said, there are many successful property purchases every week, so if you have any other doubts, just ask on here.  At least one of us - usually more from almost 40,000 members! - should be able to help from our own experiences. 

Kind regards,

Kim

Kimmy11 wrote on Thu Feb 25, 2021 6:58pm:

Hi Ashoke and welcome to the forum,

There are a lot of "illegal" builds in Spain and they are bought and sold, often without difficulty, but usually to cash buyers.  To save wasting more of your time, if you see a property you like, the first question to ask the selling agent should be, "Does it have a Habitation Certificate?"...

Read more...

....  If it doesn't, walk away (you could make it a condition of sale that the vendor obtains it before your purchase can proceed, but unless they do, you're going to have the same problem with a mortgage application).  My other tip would be, don't trust what an agent tells you: ask to see the certificate; if they don't have it already, they should be able to get it from the vendor.

I could tell you some horror stories about some of the properties we looked at before we bought 5 years ago - including the lovely house in the campo on a 5,000 sq m plot.  Unfortunately, one of the problems with it being an illegal build was that it shared its electricity supply with the other 11 houses in the development.  There was no formal "community", but two of the neighbours had taken responsibility for reading the meter and then divvying up the bill by using a convoluted formula based on the size of each property - imagine if you inadvertently ticked off those neighbours?!

I've heard of other developments being legally built, with planning permission, but years later they're still on "builder's electricity" because they build, take their money and scarper, without completing the administration that allows individual owners to get their own electricity and water supplies.  A large, well-known Spanish developer has done this to my sister-in-law - twice!  She joined a Class action with many others, but after 12 years, their lawyers have had to admit defeat.  Yet, said developer is still trading and now offering "viewing trips" to the unsuspecting.

That said, there are many successful property purchases every week, so if you have any other doubts, just ask on here.  At least one of us - usually more from almost 40,000 members! - should be able to help from our own experiences. 

Kind regards,

Kim

Kimmy11 wrote on Fri Feb 26, 2021 1:32pm:

I agree, Denise, the cost of buying and selling in Spain would make getting it wrong an expensive mistake.

On the purchase side, there's the considerable cost of ITP (property purchase tax) of 10% in the C.Valenciana autonomous region, along with a further 3-4% of the purchase price for fees, i.e. lawyer, notary, land registry.  For a property purchase price of €200K, that's a further €24K of...

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... tax and costs.  

On the vendor's side, while newer agents to the market are driving down the sales commission to around 3%, that is the minimum and 5% or 6% is still the norm, plus legal costs.

Kind regards,  

Kim