When buying off-plan properties in Spain, it is important to ascertain why you are buying a property and in which way you intend to use it.
Off-Plan Properties by Area
Why do families from all over the world buy holiday homes in Spain? Their reasons and motivations are varied but mostly boil down to a handful of primary reasons:
- They want a bolt hole in the sun
- Cheap flights mean they can get here in just 2-3 hours
- They want to escape cold winters in northern countries
- Ultimately they want to retire and live here on a full time basis.
Many are purchasing outright with cash with a lesser amount getting mortgages. Most families who want a second home in Spain for their own use, tend to have the cash to do so.
Reasons to buy off-plan properties in Spain
The benefits of buying off-plan properties on the Costa del Sol, as with anywhere else are numerous. Typically you are purchasing a property which is:
- Constructed using the latest techniques and materials.
- Is more energy efficient
- Has the latest design features
- Has a builders guarantee in place
- Offers payment options (dependent on whether the build is already under way)
- Allows you to plan for the future
Buying off-plan properties requires that you carefully consider the implications prior to purchase.
Buying an off-plan property in Spain at initial pre-sales pricing can of course offer an excellent upside. Thousands of investors have made considerable profits over the years. However, buying Phase I of a 4-5 phase development could mean that you cannot resell your property until completion of the entire project. This could be 2-3 years further down the line.
If you are buying for your own use then you will benefit from any equity gain at the same time as being able to use your property. Off plan property is suitable for most kind of overseas buyers, but not all off plan property is suitable to investors.
The process for buying off-plan properties
The process of buying off-plan properties in Spain is essentially very straightforward.
The right area
Firstly you need to choose an area of the Costa del Sol and then a community. If you do not intend to rent or buy a car, make sure that you are within walking distance of services and shops. Many people who purchase properties for short term rental purposes can get caught out by this simple piece of common sense. Not everyone wants to drive and this means that your property is not a viable rental for them.
The right amenities
You need to make sure that the development has the amenities and facilities that you require. This could be a garage, if you intend to purchase a car, or a storage area for your belongings. Will the pool be open year round? What about other amenities such as a gym, a spa or concierge reception?
Most developers of off-plan properties in communities in Spain will be able to give you an idea as to how much the community fees will be be. These fees are paid monthly, quarterly or yearly. Within the community paperwork it should explain what your fees will be used for. This could be general maintenance, lighting, rubbish collection, gardeners and even repainting of the exteriors of the property every few years.
Once you have selected an area and a development you need to choose a floor plan. The floor plan should work and flow in a manner that meets your families requirements. If you have a family member with special needs, you may be able to get the developer to make alterations during the construction phase.
Once you have decided to purchase you will place your reservation.
The reservation for an off-plan property is typically just 6,000 euros. This could increase if you are purchasing a more expensive off-plan property. The reservation removes the off-plan property for a specified time and provides you with a few weeks to arrange the deposit monies and check paperwork.
Prior to paying the deposit (usually 20-30% of the sales price) your lawyer check that paperwork is in order. This will include:
- Confirmation that the developer owns the land
- Building licenses are in place
- That the purchase contract covers all of your legal rights.
Once you have paid the deposit, you should have plenty of time to arrange a mortgage should one be required. Some developers have ties/affiliations with lenders which offer good rates. Just to be sure you are getting the best rates we recommend that you also look at other options.
Completing on your new home in Spain can wait!
After several months your off-plan property has developed into your new holiday home in Spain. You are excited and can’t wait to move in but, you are not quite ready to sign the paperwork. Before completing on your property, you or your local representative needs to check the property.
This walk-thru is often named ‘snagging’. It is your ONLY opportunity to bring to the attention of the builder any mistakes, poor workmanship and quality issues. Your list is predominantly about your property but could also include items within the community grounds. Once your list is acknowledged by the builder, they will prepare a schedule to rectify these items.
Once the work to rectify has been completed you perform another walk-through in order to sign off on the alterations. If everyone is happy a date is set at the notary office in order to complete on the sale.
Licencia de Primera Ocupacion
Once the property is completed the developer needs to receive the Licencia de Primera Ocupacion. This is absolutely required to be in place before you sign for the property. It marks the final signing off of works and permits the property to be used for the very first time.
Completing on your new property
Depending on your busy schedule you may choose to go to the completion at the notary’s office or leave it to your lawyer. If you will not be present you will need to make sure that your representation has your final purchase funds well in advance. All lawyers have client escrow accounts for this purpose.
You have the keys, what can be left? Well, the utilities need to be put in your name and standing orders need to be arranged. You will probably want internet connecting and need to organize a property management company to look after your new home in your absence.
Depending on your needs, you may wish to furnish your new home yourself or use a specialist company. There are a number of companies who provide turnkey furnishing services on the Costa del Sol. They typically offer a range of services from basic furniture delivery to complete design and custom interiors.
Regardless of which way you want to go, furnishing a property takes time. Both furniture stores and outfitters normally have a delivery time of several weeks. If you purchase from various stores, you could find that arranging deliveries over a number of days or weeks is stressful, to say the least. This is why many people choose to go with a professional company who does everything.
To successfully purchase an off-plan property in Spain and turn it into your dream property you will need to work with experienced people.
Are you ready to meet with us?
If you are ready to purchase a property in Spain and have your finances in place, then we are ready to help you. Do you have plans to visit the Costa del Sol in the next few months? Or maybe you are just starting the information gathering stage.
Either way our team of professionals provide assistance at all stages of your purchase of your off-plan properties in Spain. We can help you choose the right community and take care of the management when you are not here. We can do the snagging of the property and can oversee the furnishing prior to your arrival.