Once you have decided which property to buy and we have reached an agreement with the seller on the price and other conditions, you should sign a Reservation Agreement and pay a deposit (typically not less than EUR 6000). This effectively takes the property off the market and freezes the price. The deposit is non-refundable should you decide not to proceed with the acquisition (except for when there is a written agreement defining otherwise, like for example if a mortgage is required but not granted, or the outcome of a legal due diligence process advises against the purchase).
After confirming the reservation, we advice that you contract a local lawyer, specialized in Real Estate transactions. A lawyer may help you to set up a Spanish bank account and obtain a N.I.E. (Número de Identidad de Extranjero - the required Spanish tax identification number, assigned to any foreigner that acquires a property in Spain). More importantly, a competent lawyer will perform a complete Due Diligence on the property you intend to buy as well as on the Seller. This process will include fundamental verifications of whether the land and building are duly recorded at the local Real Estate Registries, whether first-occupation licenses and construction licenses are valid, whether the Property Title is valid, whether there are no debts, liens, claims or other limitations affecting the property or the seller, whether the property fulfils Town Hall and General Urban Planning requirements, etc…
When the Due Diligence process indicates that there are no insurmountable risks to the transaction, the lawyer will prepare a Private Purchase Agreement (PPA). This is a contract signed between buyer and seller, legally binding both to proceed with the transaction. At this point, a payment of 10% of the total price is required in case of a property resale, and 25% to 40% in case of a new build or an off-plan acquisition. The PPA is generally signed between 2 to 4 weeks after the Reservation Agreement/Deposit.
Within 2 to 3 weeks after signing the PPA, the transaction will be completed by signing the permanent Public Title Deed (Escritura), in front of a Notary. By this moment, all the debts and other impediments to the sale are cleared by the seller and the buyer must pay the remaining balance of the purchase price. The notary will register the new ownership in the public Property Registers and you will now receive the keys of your new property.
Now, your lawyer will still have some follow up to do: get the locks changed, transfer water & electricity supply into the buyer's name, submit the new owner to the community and pay its fees, contract an insurance and telephone and internet connections, register and pay annual real estate tax returns, etc..