What do you need to prepare before the purchase? Steps to buy a property in Valencia (Part 1)

Jan. 9, 2020 Francisca Mayor Mayor

The following post is mainly addressed to foreigners willing to buy a property in Spain, and in particular in Valencia. Being the person who is in charge of international customers, We normally explain these issues several times per week, so we have decided to summarize the main points that you should know before, during and after a purchase procedure. We will separate it in 3 different posts, so here you have just the first one.

What do you need to prepare before the purchase?

Of course, apart from the property that you want to buy you need:

1. Get the NIE number (Foreign Identification Number): This number identifies you in the local tax system and will be necessary for the date of the purchase. Thus, you must manage to get it before. You have 3 options to do so:

Option 1: Personally in the police office of Valencia, the steps are:

(You must take into account that they are giving appointments around one month upfront and you can not choose the date, so complicated if you do not have flexibility with dates to be in Valencia)

  • The date of the appointment, go personally to the police office, with a copy of your passport, you will have to fill two forms, they will give you a document to pay a little tax (less than 10 €) in a bank And go back to give the justification of the payment to them. After justifying it, they will inform you that you can pick up the final document in one week in the same office.

Option 2: In the Spanish embassy or consulate of your country. Should be a similar procedure, but better to call the embassy and ask if it is possible and how long it takes.

Option 3: Authorize, by means of a power of attorney, to a lawyer to do all the process on your behalf. With a small fee of € 300 you will find solicitors or lawyers who will make it on your behalf. We also offer this service in our office, if you need more information.

2. Get a Spanish bank account: Nowadays there are many banks in Valencia who offer bank accounts for non residents, so that you can open it just with your passport. Normally you should be personally present to be able to open it and sign all the documents, despite some banks allow you to open it in the distance.

Take into account that normally, non residents bank accounts have a maintenance fee of around 10 €/month, but also some good conditions for bank transfers. Theopening will request your original passport and some documentation to justify that your incomes are coming from a legal source, like payment slips and so, so better if you prepare everything before.

3. Select and reserve the property that you plan to buy “earnest money deposit agreement":

In order to formalize the reservation of a property, you must sign the “purchase contract” or “earnest money deposit agreement”. It is a private contract between you and the sellers to formalize the commitment to buy and sell the property respectively on an agreed price and within the maximum period of time. In this case, you have to pay the seller an agreed amount the payment for the reservation. Take into account that you will lose it if you decide not to buy the property in the future. In case the seller does not sell the property to you, he will have to pay back to you the double of the paid amount, according to the law. It is usually prepared by the estate agency or a lawyer working with the agency or with the parties.

A professional agency will manage all documentation, ownership, mortgages or debts, or any other situation regarding the property before and inform you, and also include the information in the contract if necessary.

How much money do you need on top of the price?

Our recomendation is to estimate an overall cost of 14% – 15% on top of the agreed price of the property that is spliteed into:

  • 10 % is the purchase tax that you have to pay to the government.
  • 3% real estate agency fee: Just clarify that most of the real estate agencies in Valencia work with an agency fee of 3% but it can be different in other cities. You must pay it just in case that the purchase is completely finalized, not necessary before! Also you can be requested to pay a small deposit as a proof of interest in the property if you decide to make an offer. My recommendation is just to be sure that it is a deposit and not a payment, so that they will give it back to you if there is not an agreement on the price.
  • Another 1 to 2 % for other expenses like notary, management agency, registry expenses, etc.

If you want to know more information about a purchase procedure in Valencia then check it out this post: What do you need to know during the purchase? (Part 2)