How to sell a home in Spain
What are the steps that I must take to sell a home in Spain?
Preliminary recommendation: Before we start, a recommendation for all those who are considering selling a home in Spain. The sale of real estate involves a series of complex decisions and steps, which require the expert hand of a professional who will ensure that all details receive the adequate attention. Some people choose to sell their home by their own means, but we strongly recommend that the buyer of a home use the services of a real estate agency. By reading below the purchase process, we will understand why.
The first step when selling a property is to determine the price at which we are going to market it. It is obvious that every seller wants to maximize the profit obtained by what he sells, and the same could be said of the intermediary/facilitator, in this case the real estate agency, whose fees will depend on the sale price. However, both the seller and the real estate agency want to sell, so the selling price will have to be adjusted, sooner or later, to the market price. Alarcon Estates carries out a free valuation of your home. Trust in our experience and criteria, justified by the satisfaction of our clients, allows us to recommend you to request this service not to one, but to several real estate agencies, so that you can compare different valuations —if we consider only those agencies that meet the necessary professional and ethical requirements, variations in valuation cannot be enormous—. In the event that no valuation is satisfactory, you always have the option of hiring the services of an independent valuation agency, which will logically charge the corresponding fees for this service.
Choosing the real estate agency that will manage the sale of my home
The way in which real estate agencies respond in our first contacts with them and in the valuation of our home will give us some clues that will help us to decide which one is the most convenient for us. We must take into consideration that large global agencies, with offices in many countries around the world, have access to a huge number of potential buyers. Alarcon Estates is part of the Coldwell Banker* network, the world’s largest real estate company, with more than 3,100 agencies in 47 countries and 43 million visitors to its corporate web site every year.
What we do strongly recommend is that, no matter which real estate agency you choose, always sign an exclusive sales contract with it. Some people think that signing an exclusive contract with a real estate agency means limiting the possibilities of sale, by closing access to a number of potential buyers. Although it may seem paradoxical at first sight, signing an exclusive contract with a real estate agency does not limit the access to potential buyers; quite the contrary, it expands it and, moreover, has a number of decisive advantages versus the option of sharing this task between several agencies. It will be a pleasure to explain to you more details about this crucial aspect of the sale, if you are interested. Do not hesitate to consult us without any obligation.
Preparing the product: home staging
Once the price is determined, we will show our property to the world and, logically, under the best possible light. Does this mean giving an unreal image of our home, so as to attract more potential buyers? By no means. What we intend is to show all the potential of a home. Sometimes a few details make a very important difference in our experience of the place where we live. We are specialists and we know how to take advantage of all the factors that maximize the well-being that our home brings us, all aspects considered.
Once the house is ready, our professional photographers will get high quality images to display on our website and, if desired, we will get video footage with drones. All this work is performed by the real estate agency without charging any cost in advance, since the payment of our fees comes from a commission based on the sale amount, once it is done.
Organizing the visits
We accompany the potential buyers who wish to visit the property, so that the owner does not have to worry about anything. Before scheduling the visits, Alarcon Estates carefully selects potential clients, with due attention paid to their economic solvency and other criteria.
Verification of the legal and economic situation of the property
A potential buyer of our home will need guarantees that everything is in order before signing the acquisition. As at any other stage of the selling process, we will take care of everything and promptly inform our clients of all our steps. Alarcon Estates provides its clients with a list of trusted attorneys, who are specialists in real estate matters, so they can choose the one they deem most convenient. The lawyer may, if necessary, do the following:
- Obtain a certificate of the home in the Property Registry. The certificate specifies who owns the property and whether there are any charges on it, such as mortgage loans that have not yet been paid.
- Check at the town hall that the property has the corresponding building license and habitability certificate.
- Check that all housing services, such as water and electricity, municipal taxes and community expenses have been paid. He/she will obtain the corresponding certificates and/or invoices.
Reservation of my property by a potential buyer
Once a potential buyer has made the decision to acquire our home, the next step is the signing of an earnest money contract (“contrato de arras”) or placing a deposit, by which the buyer reserves the purchase of the home —logically, the property will be removed from the market at this stage—. An earnest money contract and a deposit do not have the same implications. Let’s see the difference.
- Placing a deposit: on the Costa del Sol, it is customary that the deposit to reserve a home amounts to €6,000. If the buyer changes his mind and decides not to carry out the transaction, the seller will retain the deposit, as a compensation for the damage caused by the temporary halt of the selling process. In case the seller backs out, he would be obliged to return the signal to the buyer.
- Earnest money contract (“contrato de arras”): When signing an earnest money contract, a deposit is placed as well to reserve the home, but there are two important differences. First, the amount of this deposit is usually 10% of the sale price; second, it not only obliges the buyer to complete the transaction, but also the seller. Moreover, if the seller changes his/her mind and decides not to complete the transaction, he/she will have to give the buyer twice the amount received as a deposit (that is, 20% of the value of the home).
As we can see, an earnest money contract is a more secure way to guarantee the purchase and sale of a property than the mere placing of a deposit. The seller must be sure about his/her decision to sell, so as not to suffer a serious money loss. There could normally be two types of causes whereby a seller would withdraw from a sales operation after signing an earnest money contract: force majeure issues or a buying offer that surpasses the agreed selling price plus the refunding of the deposit (an infrequent case, by all means).
Preparation of the documents for the sale
The preparation of the deed of purchase and sale that will be signed before a notary is a complex task that must be carried out by a lawyer specialized in the real estate sector. This will avoid cumbersome and costly delays at the time of signing, and even possible legal problems. As indicated above, we provide our clients with a list of lawyers of our trust, who are specialists in real estate matters, so that our customers can choose the one they consider most convenient.
Signature before notary
Alarcon Estates accompanies its clients in this decisive moment of the selling process, in which the sale of their home is substantiated. According to the law, the seller is in principle bound to pay the notary for the costs of granting the deed, while the buyer must pay the expenses of the first copy of this deed. However, the law leaves the parties the option to agree and distribute these expenses as they wish. In practice, it is customary for the buyer to take responsibility for all the expenses of the notary’s office (this is the reason why he/she usually chooses the notary). In any case, Alarcon Estates provides its clients with a list of the main notaries in the area, with a broad professional background, so that they can make their choice.
Payment of taxes
Once the deed is signed, we will still have to pay the taxes that correspond to the seller and only then we will be able to declare that the job of selling a home has been done. Alarcon Estates, through the specialized lawyers with whom it collaborates, provides its clients with all the necessary advice, so that they can rest assured that they have complied with the Spanish Treasury.
In Spain, the seller of a property pays the following taxes:
- Tax on the Increase of Value of Urban Land or “municipal surplus” (“Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana” or “plusvalía municipal”).
- Patrimonial Gains Tax or “state surplus” (“Impuesto sobre Ganancias Patrimoniales” or “plusvalía estatal”).
The details about these taxes are detailed in the section Expenses in the purchase of a home in Spain.