Buying a home can be a high effort and time consuming activity, but in this post we present you the 10 steps guide to buy a property in Spain to make the home buying process easier and make the best possible decisions. Buying a home is one of the most important choices!
Step 1: Start a research with time
As soon as possible, start visiting websites, newspapers and magazines that have listings of homes. Write down those that interest you and check how long they remain in the market. Also, keep in mind any changes in the prices that are presented. This will give you an idea of housing trends in specific areas.
Step 2: Establish the operation budget
Multiply by four the gross annual income of your home. That is the money that you should allocate to buy a house, neither more nor less. Thus, for example, a family with a gross annual income of 40,000 euros should discard homes of more than 160,000. «No individual or family should allocate the income of more than four years to pay a house.»
Calculate your buying expenses now with our online calculator
Step 3: Ask yourself… What is the maximum mortgage that I can afford?
The maximum amount to which any applicant for a mortgage can aspire reaches 33% of his monthly income. However banks prefer to opt for percentages closer to 25% to avoid future problems in any operation.
It is very important that you analyze carefully your economic situation and see if you meet a series of non-negotiable points. Without them you should not buy a house.
- Have saved at least 30% of the price of the home.
- The mortgage fee should not exceed 33% of your monthly income. But you should go one step further add to the mortgage fee all the expenses of the house. Make sure this amount is not greater than 33%.
- The price of your home can’t be more than 5 times your net annual salary, that is, what you get every year, after taxes.
Step 4: Find the right real estate agent
A real estate agent is the key when you are immersed in a home buying process. He can provide you with useful information about homes and neighborhoods that is not easily accessible to the public. His or her knowledge of the buying process, negotiation skills, and familiarity with the area is essential information you won’t get on your own.
Step 5: It’s time for «the test»
Start visiting those properties that fit your price range. It could be useful to take notes (using the checklist below) in every home you visit. You may arrive a lot of houses! It can be hard to remember everything about it, so you may want to take pictures or make videos to help you remember each home.
Make sure you check the small details of each house. For example:
- Test the plumbing by running the shower to check the water pressure and see how long it takes for the hot water to start flowing.
- Test the electrical system by turning switches on and off.
- Open and close the windows and doors to see if they work properly
It is also important to evaluate the neighborhood and take note of things like:
- Are there other well maintained houses in the building?
- How much traffic does the street have?
- Is it conveniently located near places of interest for you: schools, shopping centers, restaurants, parks and public transportation?
- Is there easy parking?
Take all the time you need to find the right home. Next, work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood.
Once you and the seller have agreed on a price, the house will go into escrow, which is the period of time it takes to complete all the remaining steps in the purchase process of that home.
Step 6: Demand a home inspection
Purchase offers are subject to an inspection of the property to check for signs of structural damage or things that may need to be reviewed. If you decide to proceed with the inspection, your real estate agent will help you to have it carried out within the days prior to the acceptance of the offer by the seller. This contingency protects you by giving you the opportunity to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
Step 7: Choose your mortgage now
There are many different mortgages and banks, and therefore, now is the time to choose the one that best suits your needs. Fixed or variable fees, number of years, or the monthly amount to pay are the main variables that you should check.
Step 8: Order an appraisal on the property
If you need a mortgage, the bank will require an appraisal to provide an estimate of the value of the house you are buying. The appraiser is a member of a third-party company and is not directly associated with the entity that issues the loan. This appraisal will allow you to know you are paying a fair price for the home as well.
Step 9: Coordinate the paperwork
As you can imagine, there is a lot of paperwork involved in the process of buying a house. Your real estate agent together with the banks and the registration office will handle all the procedures and ensure that the seller is the rightful owner of the house you are buying. If you want to know more about the documents needed before buying a property click on the previous link.
Step 10: Closing the sale
When closing, you will sign all the required documents and procedures to complete the purchase, including the documents of your loan. Once the check is delivered to the seller, you are ready to move into your new home!
Jose Carlos Carrasquet at Agoramls.com