First step: the NIE

Obtainingyour NIE is the first step on the road to becoming a homeowner in Spain. At the same time, you can launch step 2, the search for financing, which can be carried out simultaneously, and also takes an average of 2 months.

What is NIE?

This is the Foreign National Identification Number. It's a personal, unique number assigned to each foreigner by the Spanish authorities.

This number is indispensable for many administrative procedures, including opening a bank account or telephone line, renting or buying a home, and a thousand other things.

How much does it cost to obtain an NIE?

From a few euros to several hundred euros, depending on the option you choose.

How long does it take?

The average delay is often 2 to 3 months. That's why it's important to start the process as soon as possible.

Complete guide

To find out more, consult our complete guide to the NIEwhich details how and where to obtain it, as well as the documents and forms required.

Second step: the mortgage

Is it necessary to make an offer to purchase before starting your search for financing?

No, it's the worst mistake you could make. 

Take care of your financing first, in parallel with obtaining your NIE.

Only then can you move ahead with your property purchase in Spain.

Why? 

Because you run the risk of underestimating the amount of capital you'll need to buy in Spain. You run the risk of making an offer for a property that you won't be able to buy for lack of funds. Spanish banks will only lend you an average of 70% of the price of the property, so your downpayment will have to be 30% of the price of the property, plus all additional costs. Of the total cost of the project, you can often count on 50% being financed by a Spanish bank, and 50% by your own funds.

Beware of this mistake, it can cost you dearly!

Not having your financing and budget validated before making an offer to purchase is a mistake that can cost you dearly. In fact, in Spain, sellers very often refuse to accept no-credit clauses, and you could lose up to 10% of the price of the property if you fail to finance the purchase. This corresponds to the 10% of the price of the property that you will have paid as a deposit ("Arras" in Spanish), which the seller is legally entitled to keep if you do not go through with the sale, after signing the compromis de vente. 

To find out more, consult our complete guide which explains how to obtain a mortgage for your property purchase in Spain.

Key points to remember : 

• Financing by a Spanish bank
  • can finance up to 70% of the property price
  • does not usually include work or furniture.
  • equity required: 30% of property price, notary fees, estate agent fees, works.
• Financing by a bank in your country of tax residence :
  • can finance up to 100% of the total cost of the operation
  • is available to you only if you can mortgage a debt-free asset in your country of tax residence, or bring other assets that the bank can pledge: life insurance, shares, inheritance. 

Conclusion: to avoid unpleasant surprises, you should plan to have equity of 50% of the property price, or 50% of the total project cost.

Step 3: Define your project precisely

Personal contribution, purpose of purchase, and incompatibility triangle

To avoid wasting your time, it's essential to determine your criteria very precisely.

Here are the three questions you need to answer before starting your search.

1. What personal contribution?
2. What is the purpose of the purchase?
3. Criteria that are important to you

1. Your downpayment determines the price of the property you can buy 

If you have a personal contribution of €100,000, you can buy an apartment with a selling price of :

• 200,000 € if you carry out no work and do not furnish the apartment
• 150,000 if you carry out €25,000 of work and furnishings.

Conclusion: as the Spanish bank will only finance 70% of the price of the property, your personal contribution will determine your budget. So don't start looking at real estate ads before you've accurately determined your budget.

2. Purpose of purchase

A rental investment or the purchase of a second home?

Are you counting on passive income or positive cash flow to supplement your income?

How much do you need to earn each month from your rental income to retire early?

Many of our customers have bought several apartments with our help, so that they could retire before the official retirement age. If we know what you're aiming for, we can put our work to work for you.

3. Criteria that are important to you

Here are a few questions to ask yourself to determine your project:

• Rental profitability is often inversely proportional to neighborhood glamour.
• Rental profitability is often inversely proportional to the increase in land value (higher property prices on sale).
• Is it important for you to buy close to universities? Beaches? Public transport?

Fourth step: buying right

Determine exactly which criteria are important to you

New home or renovation? 

Buying a home to renovate has many advantages:

• Larger negotiating margin
• Significant added value after renovation
• Making your property more attractive
• Finding quality tenants
• Adapting your home to your needs

The incompatibility triangle

You have to know how to sacrifice one of the three following criteria:

• Rental yield
• Location
• Aesthetics

A profitable, well-placed, attractive property would be ideal. In reality, you need to know how to buy a fairly attractive, profitable property in an up-and-coming neighborhood. Or an attractive property in the heart of the city center, but inevitably less profitable. 

Know thyself, as Socrates said. What are your two most important criteria?

The search for the perfect property

Buying an apartment in Spain means knowing what to look for yourself, and being accompanied to take action. 

The classic route is to follow these two steps:  

1. internet research: idealista.com and all the other real estate sites. After a few months wasting my time looking at ads and making no progress, 
2.  support from a real estate professional : enlist the help of an expert to save time, receive valuable advice, check compliance and avoid unpleasant surprises. 

Buyers often want to do without the services of a hunter, to avoid paying fees. After several months wasted looking at idealista ads without making any progress, it's best to move on to step 2, and get some support.

Every month that goes by without buying, is a month without receiving rental income. Just think: after 6 months of wandering around on the Internet, you'll already have lost several thousand euros in uncollected rental income. Not to mention the fact that a good property hunter will help you aggressively negotiate sale prices, sometimes more than reimbursing the buyer for the cost of his fees. 

Fifth step: the offer to purchase

Three stages, each of which we accompany our customers through step by step.

1. Formulating a purchase offer
2. Sign the sales agreement ("Contrato de arras" in Spanish)
3. Signature of the deed ("escritura" in Spanish)

Let's take a closer look at these three steps:

1. Formulate an offer

• Writing the offer to purchase
• Bank transfer of the "señal" in the order of €1,000 to €5,000 in general, to signal the seriousness of the purchase offer.
• If the offer is accepted, the sum will be deducted from the sale price.
• If the offer is refused, the amount will be refunded immediately.

2. Sign the sales agreement - "contrato de arras

• Contract between seller and buyer defining the terms of the agreement
• Complement the financial advance up to 10% of the value of the property.
• "Arras penitenciales:
  • If the buyer withdraws, he will lose the amounts advanced. 
  • If the seller withdraws, he will have to reimburse the buyer twice the amount advanced.

3. Signing the deed of sale - "escritura

• Payment of balance
• Handing over the keys

Sixth step: your checklist once the sale is completed at the notary's office

Once you're a homeowner, you're not done yet. There are still a few steps to take:  

• Put energy contracts in your name: electricity, water, gas, etc.
• Informing the condominium manager of the change of owner
• Pay taxes related to the transaction
• Register the purchase in the property register
• Start renovating your home, then decorate or furnish it
• Offer your property for rent if you wish to generate rental income.