The sales process
The process of buying or selling a property in Sitges is typically a two-stage affair.
The first contract commits both parties and the purchaser typically hands over 10 per cent of the official sales price to the vendor.
The form of contract can vary and be a Contrato de compraventa; or a Contrato Privado. Both commit each party to a deal with financial obligations or repercussions for non-fulfilment. Essentially the major difference is that the “compraventa” agreement entitles a purchaser to on-sell the property before completion of the purchase, although this can be varied.
By agreement the deposit monies can be held by a third party or held in escrow. If the purchaser subsequently withdraws then the 10 per cent is forfeited and paid to the vendor. Should the vendor withdraw then he is contractually committed to return double the deposit - this can require court action to secure. This contract is signed simply between the 2 parties.
You can appoint someone with Power of Attorney to act on your behalf. Should you so choose we recommend a limited Power of Attorney for this transaction only. This needs to be signed in front of a Notary and there will be a charge.
An appointment is then made with the Notary, which can be the next day but generally works about two to six weeks hence for completion of the transaction.
At the Notary the balance of the purchase monies are paid over (official and black and taxes will be handed over or accounted for with the bank being present but the Notary conveniently steps out to wash his hands for the exchange of black monies!) and the keys handed over. The property becomes yours with official registration happening generally within 4 to 6 weeks. The Notary is responsible for ensuring this and will issue a copy on the day of the Nota Simpla pending the fuller documentation.
For budget purposes you need to look at least 30 per cent of purchase price being in your own funds/actual cash to cover the equity not covered by the mortgage and 10 per cent for charges - 7 per cent IVA on the declared value and the bank and notary and registration and lawyer charges.
As long as the black monies are not excessive (and within the valuation figure) the bank will finance these as a part of the mortgage advance but it becomes unhappy to do so if you breach the above guideline by much, otherwise you may have to finance additionally.
We hope this explains the process. If you have any questions let us know. We can arrange for meetings with the banks and lawyers and the vendor/agent (if there is one).
Often the Estate Agent will try to induce you to make a reservation payment of, say, €500 to €3,000 or more to "stop the property being further marketed to other prospective purchasers" and this can be useful to show good faith.
However, this can sometimes be a risky business as the estate agent sometimes holds these monies and abandons the prospective purchaser. We can offer advice at this point.
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