A selection of Frequently asked questions.
What is a sales agreement?
A private document signed between the buyer and seller. Your Lawyer will raise this for you. It must state the following points:
• Details of the buyer and seller with ID Details and address
• A legal description of the property
• The purchase price
• The form of payment and currency to be used in the transaction (banker’s draft, cash, etc.)
• The completion dates and penalty clauses if these dates are not met (usually, if the buyer withdraws after signing the contract he could be liable to pay double the amount of the deposit). Your Lawyer will advise.
What if there’s still a mortgage on the property?
If there is a mortgage on the property it will be canceled on the same day that you sign at the Notary. Before the signing date at the notary, your lawyer will inform the holding bank to prepare the cancellation costs and the amount that the seller still owes. On the day of the signing, a banker’s draft will be made out for this outstanding figure including the costs and paid to the bank representative. This figure will then be deducted from the purchase price when paying the seller. The bank will then register the cancellation of the mortgage.
Is it easy for a foreigner to obtain a mortgage?
Yes. So long as you can submit the financial information the bank requires in applying for a mortgage, the bank will provide you with details of what is required. Often builders will offer you a mortgage if you purchase a new property.
What does a foreigner need in order to buy a property? The first thing is to apply for an N.I.E. (Number of Identification for Foreigners), which is basically an ID card anybody with a financial interest in Spain or the Canary Islands is required to have. It is also required for setting up utilities etc. You’ll also need to set up a non-resident bank account, which is a simple process, but we will handle all these administrative procedures for you at no charge to you if you are purchasing with us.
Will we have to pay tax when selling a property?
Yes, if you are a non-resident you will have to pay 3% of the new declared value as retention to the Spanish Tax Office, but provided your accounts are in order you could? get most of this back within five or six months. You will also have to pay 18% of the capital gains as Income Tax, i.e. 18% of the difference between the price you paid for the property and the price you’re selling it for. You would be wise to appoint an accountant in these matters.
Do I need a Lawyer? Yes, we strongly recommend that you appoint a Lawyer, we can recommend a good lawyer that can assist you in all matters if you do not already have one. Your Lawyer will have your interests at heart and will ensure that your purchase is a safe one, any deposits will be held by your Lawyer, this is the best option for you and one we strongly recommend.
If you have any questions please email us we would be happy to help.
A lot depends on why you are buying the house. Are you buying it mostly as a home or mostly as an investment? There is a difference.
For the most part, upgrades are high-profit items for builders. They aren’t designed to enhance the value of the house, but make you happier with the house you do buy.
If you are looking at your home as an investment, then you buy from the smaller to medium size in the tract and spend only a minimal amount on upgrades. If you are looking at your purchase as a home, then you select upgrades that will enhance your quality of living.
One rule of thumb is to always upgrade the carpet and padding.
If your goal is to buy a home for it’s resale value and the one you are thinking of buying in the older neighborhood is at the upper end of values for that neighborhood, then it may not be the wisest choice. If it is similar or lower in price to the others, then there should be no problem, because pricing should be considered in relation to the local neighborhood and not compared to homes in other neighborhoods (for the most part)
Plus, is it a neighborhood on the decline, or are others going to be fixing things up, too, so that it is a neighborhood that is improving? It could turn out to be a very good deal as long as you don’t “overpay” because of the recent improvements.
Remember that you also buy a home for it’s value to you as a “home,” and that is something else you should consider. Which neighborhood would you AND your family feel most comfortable in?
You might want to consult a couple more Realtors on the market value of your home. Most of the estimates should be in the same ballpark.
It could be that your friend is being more honest with you about the value of your home and the other Realtor gave you a higher number because he already knew you expected it. This is called “Buying a Listing” and is the subject of an article on our web site.
Or it could simply be that your friend is a good friend, but not that great of a real estate agent.
Mixing business and friendships is always risky to the friendship. On the other hand, if your friend is truly competent and was providing wise advice, she may be offended if you ignore the advice and choose another agent.
A real estate salesperson is more than just a “sales person.” They act on your behalf as your agent, providing you with advice and guidance and doing a job – helping you buy or sell a home. While it is true they get paid for what they do, so do other professions that provide advice, guidance, and have a service to sell –such as Certified Public Accountants and Attorneys
The Internet has opened up a world of information that wasn’t previously available to homebuyers and seller. The data on listings available for sale is almost current – but not quite. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent.
If you’re selling a home, you gain access to the most buyers by being listed in the Multiple Listing Service. Only a licensed real estate agent who is a member of property portals can get you listed there – which then gets you automatically listed on some of the major real estate web sites. If you’re buying or selling a home, the property portals are your agent’s best tool.
However, the role of an agent has changed in the last couple of years. In the past, agents were the only way home buyers and sellers could access information. Now agents are evolving. Because today’s home buyers and sellers are so much better informed than in the past, expertise and ability are becoming more important.
The real estate agent is becoming more of a “guide” than a “salesperson” — your personal representative in buying or selling a home.
We appreciate how much goes into buying a property in Tenerife.
We will gladly help with obtaining a spanish ID, and set up relevant meetings with the bank, lawyer and tax advisor. These services are at no extra cost. Our clients purchase with complete peace of mind.