The Spanish property market is well established and was booming until 2007. According to the U.K.’s Royal Institute of Chartered Surveyors, registered sales in Spain peaked in 2006, but by the third quarter of 2009 sales had fallen by 40 percent, due to a combination of oversupply and the global economic downturn. This is good news for buyers, who may be able to find a property in Spain at a much reduced price. However, the Spanish property market contains many pitfalls for the unwary foreign buyer, because it lacks any kind of regulation and real estate agents in Spain are not required to have any specific qualifications, knowledge or experience.
1. Research the Spanish property market thoroughly before you visit Spain, to view properties; although it is often difficult to find reliable independent information, because much of it is provided by those who are selling property. It is a good idea to use a range of different research sources, such as books and magazines, as well as the Internet.
2. Decide why you want to buy a Spanish property: Perhaps you are looking for an investment, a vacation property, or even a permanent home. Whichever it is, your selection criteria will be very different, depending on how you want to use the property.
3. Select where you would like to buy your property: Spain has a huge range of geographic and climatic differences within its borders, which may affect your decision. The most popular areas with foreign buyers are those on the coast and the islands, but the main cities such as Madrid and Barcelona are also favourites. The Spanish Property Insight website has independent and wide-ranging information about specific areas of Spain and their property markets.
4. Visit the areas of Spain you are interested in, especially if you have only spent a few happy vacations there. Think about how you will use the property and check out the local facilities. If you are thinking of living permanently in Spain, visit the area several times at different times of the year. Talk to any other expats who have property in the area, who can often give you useful information that you may not get from an estate agent.
5. Find a reputable bilingual estate agent:This has become increasingly difficult since deregulation in 2000, although Spanish estate agents usually belong to one of two professional organisations–API or GIPE. Members should have a higher level of training and some professional indemnity insurance, although this is not always the case. There are also many foreign estate agents working in Spain, especially in areas popular with foreign buyers, and the only guide to their reputation and professionalism is a recommendation from someone you trust.
6. Open a Spanish bank account while you are in Spain: Take along some form of identification, such as your passport, to open a nonresident account in euros or any foreign currency; Having a bank account in Spain will make it easier for your property purchase. You can also ask the bank about a mortgage if you need one and find out how much you might be able to borrow in principal. Mortgages are available from Spanish banks, although they have reduced their lending since the property-market crash.
7. Start looking for reputable local Spanish lawyers: Do not use a lawyer recommended by anyone with a financial interest in selling you a property. The Spanish Property Insight website has a list of English-speaking independent lawyers in all areas of Spain, and your embassy or consulate in Spain can also provide lists, although they won’t make recommendations.
8. Begin viewing properties, but be prepared to return to Spain several times before you make a final decision. If you are considering living permanently in your property, it is a good idea to take a rental for at least a year, so that you can experience the area and what it is like year-round.
Never sign anything until you have taken the advice of an independent Spanish lawyer (abogado).
Make sure your estate agent is bilingual, and ask to see his registration documentation for one of the two main Spanish professional real estate organisations