Buying our Condo/aka/Piso in Spain
Towards the end of 2021, we had to decide where we would be living after May of 2022.
For the first 5 years of our journey here in Spain, we rented an old, but large piso in the center of the city, with beautiful views of the river, a park, a mountain, and best of all, the historic castle just across the river from us.
We were happy in that piso, mostly. Since it was quite old, about 40 years, and had never been renovated, it had some flaws that we weren’t wild about, but had learned to live with. We loved being in the central part of the city, close to the main plazas, mercados, hospital, our school, and downtown.
But, the owner wanted to sell the place, and wasn’t interested in striking a deal with us. So we went looking.
So what’s different about buying in Spain?
The first thing that we discovered was that the whole business of dealing with realtors is quite different in Spain than it is in the US. There is no ‘Multiple Listing’ system. The realtors here are specialized by neighborhood, and, for the most part, do not share listings. There are some online aggregation sites that, I assume for a fee from the owner, will carry listings, but not all listings are there, and you end up trekking over to the realator anyway. Annoyingly, realators are not in the mode of finding properties for you. They are happy to show you one or two options in your first meeting, then wait for you to bring them one of their own listings you’ve found online, and ask them to show it to you. This ping-pong approach really extended the time of our search.
So,,,, then what?
Get a lawyer.
In the first serious conversation in a realator’s office, we realized we were way over our heads. We left that first meeting and hired a lawyer. Best decision we made, right off the bat.
Why a lawyer? Official duties of real estate agents in Spain, or at least our part of Spain, are not nearly as encompassing as in the US. Title research is not through a title company. There are real estate contract ‘customs’, that are common, but felt, and are, shady – such as avoiding taxes through under the table cash payments to the owner to show a lower purchase price. In the end, our lawyer handled all the official paperwork for us, identified all the experts needed to complete the deal, and with the escrow agent he hired, created the final purchase agreement. He advised us along the way, making sure all the Is were dotted and the Ts crossed.
Like a real estate agent in the US, if anyone was needed to make an inspection, etc. our lawyer identified them, negotiated a fair price, and lined up the work. Fyi, inspections of pisos in Spain are not normally done, but we wanted an inspection to make sure there were no expensive problems with the building that would come back to surprise us..
There was also a renter in the property before us. Renters have a lot of rights in Spain, and need to sign paperwork to acknowledge the end of their lease, and their date to vacate the property. The lawyer also handled this official paperwork, as well as helping us to close out the lease on our previous piso.
Cash
Everyone wanted to be paid in cash. The lawyer, the escrow agent, the 8 percent state taxes on the purchase, the deposit on the piso – a standard 5k, and the previous owner. The real estate agent holds the deposit for the property, not an escrow agent.
Before the sale, Other
Have the real estate agent identify the contact information for the President of the Community . They should also tell you if there are any outstanding community fees, or big projects planned before the purchase. In our case, we had the lawyer make sure there were no outstanding fees owed, and that our contract specify the previous owner pay all the future fees due on the new community elevator in advance of the purchase.
Specifiy the condition of the property. In our case, we wanted the place emptied of furniture. In the end we gave the sellers 5 days to clean the property out.
After the Sale.
Arrange for the old owners to take readings on all the utilities. You will need to have appointments to transfer the utilities into your name, and it helps to know the initial readings when you get your first bill.
The escrow agent will file the official paperwork with the city, after which they will provide an official copy of the signed deal to you. You will need that contract to change the utilities to your name.
There was also paperwork to be filed with the city which was done by the real estate agent, e.g. the garbage bill.
p.s. utilities include electricity, gas, water, water distribution, garbage