and what about fees?
“The clerk held in front of him a scroll with a red wax seal affixed, the kind of thing believed to make a document official – or at least expensive and difficult to understand, which, in fact, amounts to the same thing.” Terry Pratchett
Usually when people buy a house they look for the best property for the cheapest price. Negotiations take place, offers are made and accepted. Especially with private sales no house is sold for the asking price.
But what about the legal assistance? Many real estate agents will tell you they can take care of the complete procedure. Of course I will not underrate the professional capacity of the real estate agents, but personally I believe in contracting the right people for specific professional jobs. Also most people are not aware that ANYONE can open a real estate office in Spain. No diplomas or other titles are needed.
The notary in Spain does not have the same function as in your own country. In Spain the notary just signs and certifies signatures and documents but he has a very limited responsability as far as the contents of the deed is concerned.
Buying a real estate is an important decision, you pay a lot of money for your dreamhouse, there’s a lot of legal investigation involved, and it does not seem logical that you spend € 300.000 on the purchase of a property but in order to save a couple of thousand euros trust the real estate agent to look after the legal side.
Please be aware that the real estate agent is the interested party. They want to sell and they know if the sale does not go through you may go to another agent. So if there is some important legal problem, can you really rely on them telling you this?? Apart from this they usually also represent the seller…
Just last month I assisted in the purchase of a property. A nice villa in Denia, on a 800 m2 plot. Total price € 325.000,- All paper work seemed to be in order, but when I went to the town hall they told me the town hall planned to widen the street and make a roundabout. Having in account the form of the plot (long and narrow) and the situation of the villa this meant almost 250 m2 would be taken of the plot and the house would be situated at the edge of the plot. The real estate agent and the seller knew about this but choose not to tell the buyer…
Now, how much is this legal assistance worth? Shopping around you probably will find “professionals” willing to assist you for 500 – 750 € for the whole procedure. People often believe it’s just a matter of checking a couple of documents and little more. But before you take any decision you should be aware of the work, knowledge, time, energy and responsibility involved.
It could be compared with a visit to a cardiologist. You go to the medical consultation because you don’t feel well and worry something is seriously wrong; he will ask you some questions, will probably run some tests, even if he takes his time normally in 30 minutes he’s ready, he tells you you’re fine and you leave his consultation feeling great. You pay € 300 and you leave. It would never occur to you to question his fees, after all he’s a professional… His work is also invisible in the sense that he charges you whatever he wants without giving you anything in exchange… NOT TRUE, the cardiologist will give you peace of mind and tranquility, and that is worth much more than that.
Also the lawyer is a professional. It takes a minimum of 5 years to become a lawyer, and after that the lawyer has to keep up as laws change all the time. What for you may seem like just checking a couple of documents requires a lot of preparation, experience and knowledge. And also the lawyer will give you peace of mind and tranquility.
Our work starts at the moment a price is agreed. At this point a reservation document is signed and a first amount is paid (usually between the real estate agent and the buyer). Usually € 3000 or € 5000. The house is taken off the market. Normally this is the moment most buyers start looking for an attorney to help them (unless they trust their real estate agent to do this).
This is when usually a first meeting takes place between attorney and buyers. The attorney explains the whole procedure and the exact way he works. He will make sure he has all the necessary documents from the buyer, copies of passports/NIE, bank information, contact details, and in case a mortgage is needed all the financial information.
Then he will contact the agent. The agent should give him all the required information, title deeds, proof of payment local rates, electricity and water bills, certificate of inhabitability, energy certificate, all necessary information of the sellers and whatever other information he feels necessary.
He will then start the legal investigation, he’ll go to the town hall to check the urbanistic situation, to the property register to check if there’s any debt or other legal charge on the property, to the light and water company to check all is up to date, and to the tax office to see if tax has been paid. Also very important is to find out if the description in both the property register and the tax office coincide with reality. If not, the attorney will make sure the seller updates the situation. This work is not always “visible” but extremely important. After all if something goes wrong the lawyer will be blamed…
Once all this is done the lawyer will approve the purchase. You can go ahead! The contract is made up (by the lawyer), and he will have your interest in mind. A date is fixed for the signature in the notary office and the way of payments are established as well as all other conditions.
All other preparations are made. You may have to apply for your NIE number, open a bank account, and if necessary sign a Power of attorney so the lawyer can sign the deed in your name.
The deed is signed, the keys handed over, and the lawyer will present within the established period the document of the transfer tax and the deed in the property register. Also he’ll take care of the changes of all services on name of the new owner.
As you can see there’s much more work involved than just “checking a couple of documents”.
Now let’s have a look at the financial picture:
Imagine you buy a house of € 300.000 (In the Comunidad Valenciana).
In the purchase price 5% commission is included for the agent = € 15.000
You pay 10% transfer tax, and approximately 1,5% for the notary and register
The price of the house therefore is € 285.000 and the costs are € 49.500!!
Paying 1% (or € 3.000) to the lawyer who will make sure all is correct and will give you peace of mind does not seem so much now, does it? He can save you a lot of money and he will tell you when it’s not a good idea to buy a certain property.
“I rest my case”