We get asked a lot of questions about the buying process from our clients when they first come over to visit us and look for their own personal Valencia Property. One of the main questions is about time periods and the process of purchasing property in Valencia and the answer to that brings into focus quite a few differences between markets in Northern Europe or North America and the Spanish market. Therefore, in this post we look into the purchase process of Valencia Property.
The Conveyancing Process in Valencia
Conveyancing is very quick in Valencia usually, especially in the city for apartments. Outside the city the process can take a little longer because your lawyer will ask for a certificate from the town hall of the legality of the building and whether there are any pending works or legal issues in the area where the house lies and smaller town halls tend to be a lot less responsive in their answers to requests of this type than Valencia city hall.
Apartments in the city can be checked out in as little as three days meaning that you can go straight to notary if you are ready to purchase. Some lawyers take a lot longer to do this job and in many cases it is just because they think that by taking longer it makes them look as if they are doing more work. That is not the case.
The “Chain” in Valencia Property
It is rare for there to be a chain involved in the purchase of a Valencia Property. “The Chain” is a concept that is very common in purchases in the UK where one purchase depends on another and another with sometimes so many links in the chain meaning it will almost always inevitably break at some point and affect one or more of the purchases in the chain. It may mean you lose your property.
In Valencia Property there is very rarely a chain because the terms and conditions of the purchase are set out clearly in the purchase contract signed by both parties on deposit. You place a deposit on the property as a purchaser and within the contract it states that the purchase must be completed within a certain time period. This gives the seller a target to get out, remove personal belongings, furniture if not included, and find themselves a property to purchase or rent temporarily and allows the buyer to get a fixed date by which everything has to be in place for purchase, the money, their removal, any finance involved etc…
Sellers know they have to get out by the date so prior to purchase they will arrange a rental, a stay with a family member and storage of their possessions or to stay in the family’s village house (This is a typical scenario) until they find something suitable. Remember that because of rural depopulation over the years many families moved into the big city and their old family house sits unused in their home village (Or at least someone in the extended family has something available for a while)
The NIE Number
You need a NIE number to buy a Valencia Property, it’s a big deal. We have written about the NIE Number and how to get it here. The process of getting the NIE number can take up to six or eight weeks depending on where you apply for it from so this can condition the purchase contract and the time period from deposit to completion if you haven’t already got one. Typically for people who haven’t got a NIE we state a maximum period for completion of 60 or 90 days from deposit. For those who already have a NIE number then 30 days to completion from deposit is more common. However if you are buying with a mortgage then again we would probably recommend 60-90 days because of the process of being granted the mortgage.
Taxes on Purchase of Valencia Property
In the UK for example it is called stamp duty and the buyer pays it on property at various levels depending on the value of the property. In Spain it is a property purchase tax and it varies between 6-10% or more in certain cases. (21% on commercial property where it is VAT as opposed to property purchase tax for example) In Valencia it is 10% and is paid for along with the notary, registry and gestor costs usually to the Notary’s account so they can make the payments for you. You have 30 days from purchase to pay it. If it is not paid then the property will not be registered in your name.
Estate Agents and MLS Systems
We have written about how estate agents work in Valencia before here. Most agents are small and have a very limited selection of properties for you to view. Some are larger and work in associations with a central database somewhat akin to the American style MLS but much smaller in scope. However we work with all of these agents to give you an all encompassing, personal MLS using all of the agents with excellent local contacts and the larger chains too. Agencies in Valencia charge both buyer and seller 3% in general. If an agency says it does not charge you as a buyer then they are lying. The commission is included in the sale price and the seller will be paying between 5% and 8% obviously making the property more expensive for you and increasing your tax bill too as you pay 10% on the declared value of the property.
Making Offers on Valencia Property
Currently the situation is fluid meaning making an offer on a property can be done in a variety of ways. Usually you make a verbal offer which is transmitted to the seller and they respond by either accepting, rejecting or making a counter offer. Once an agreement is reached then the purchase contract is drawn up and deposit is paid once your legal representative gives you the OK as they have completed the conveyancing or the part of the conveyancing required to make them happy that you can deposit without worry.
However, some agencies are now asking for a small payment to make an offer as people were making offers and when they were accepted not moving forward with the purchase (Disappearing off the face of the Earth is one reason) Expect to be asked for a 500 euro returnable payment to make the offer at times. Obviously the 500 Euros is returned if the offer is refused by the owner but you lose it if you then pull out after the offer is accepted.
The Conditions of Purchase
The time period is an important aspect of this of course but there are also other factors that go into the deposit contract. The most important of these are the deposit amount, the payments of notarial fees and how the property will be left. Expect a deposit up to 10% of purchase price to be asked for and for costs of notary and other purchase costs to be shared between buyer and seller. How the property is left is another issue (See below).
Appliances and Fittings
Usually appliances and fittings are left but you should always check whether this includes white goods in the kitchen and others. Light shades, chandeliers etc are usually left as are built in cupboards in kitchens and bathrooms but free standing ones will often be left too. All of this is stated in the purchase contract and if the property is sold furnished then an inventory is also attached to the contract in the form of a list or a photo inventory so no substitution of valuable pieces of furniture or white goods happens.
Many times the property is sold furnished entirely meaning everything stays. You may not want this at times as a buyer but don’t worry because we work with a couple of companies that will clear out your apartment or house for free and just leave what you want left there. Many times we sell to people who are going to do a total modernisation so these companies will also take out any current kitchen or bathroom for free too. If a property has been “Dressed for sale” then expect the furniture to stay.
The Handover of Keys
The keys are handed over at the Notary’s office in exchange for the payment. It is rare for this not to happen but very occasionally we can get keys beforehand in order to move furniture in if a lorry is arriving or even one set of keys is kept back for later because an agreement has been made with the current owner to move out over the following weekend or even on the afternoon of the purchase for example. Generally you walk out of the notary with a lighter bank balance but a pocket weighed down with an unusually huge number of keys.
Change of Service Contracts
The electricity, gas, water and even internet contracts are changed over on the day of purchase by the owner bringing in the last bills and contract details. Usually the lawyer or their secretary will change over the services that day by calling the companies involved and changing the name on the contract and the bank details for future payments. You may receive a new contract in your name at the property in the days or weeks following this change. Sometimes in the case of houses there are shares in a water company that come with the house and these are signed over to your name on purchase. Again your legal representative or one of our team can arrange your visit and accompany you to the offices of the company to change these details over. You usually just need a copy of the deeds and your identification.
The Deeds of the House
You will get a simple copy of the deeds of purchase on the day of signing both in physical and digital format. However the full set of deeds will be returned to the notary a couple or three months after the purchase and they will then contact you to come and pick them up. This is also true in the case of properties that have a mortgage. In other countries the bank holds the deeds until the mortgage is paid off, here you get a full copy yourself as the property registry has details of the mortgage on the property.
As usual at this point we ask you to share this post on your social media channels if you feel it is of use and contact us by mail with any questions you may have. We are only to happy to help you out. Also if you liked this article then click on the links within it for related articles and also on the images below for more information.