1.- Reservation. – It is a payment, normally made through the Real Estate, with the aim to put the property off the market until the investigation of the property is done and approved, which would mean that the property has no charges or any other objection with the legality of it. The investigation will be through the Land Registry, Town Hall and Rates department.
2.- Private contract. – The reservation contract will stay that within a period of time, the private contract must be signed by the parties (seller and buyer). The private contract will be signed after the investigation by the solicitor is done, and it is common that the buyer pays the 10% of the agreed price as a deposit. This is a very important point as the seller and purchaser will not be able to go back without any kind of damage after the signing of the private contract.
3.- Completion. – The final step, where you pay the rest of the money and get the keys of the property. It is needed to be signed before a Public Notary and it will be done on the date previously agreed in the private contract.
There are few issues that need to be taken into account whilst the sale is being prepared.
- If the buyer is a non-resident and has not bought a property in Spain before, it will be needed to apply for the NIE number (foreigners number) prior to complete the sale as it will need to be in place by completion.
- You could give a POA (Power of Attorney) where you allow your solicitor to sell or buy on your behalf if you are not here in Spain. Due to the restriction caused by COVID – 19, it is highly recommendable.
Let us advise you that the process that we explained above is NOT the law, it is just the costume of the place here in the area to purchase a property, but it can be modified by escaping any of the steps, for instance, you can always go straight to completion.
However, the reason why there is a reservation and a private contract is to assure that there will not be any problem by completion as the purchaser usually has to spend money on flights and others things to assure that the purchase will take place and if any of the parts backs out, then it will suffer the consequences stated in the private contract.