At the moment all the news you read is about COVID-19 and its impact on our health or economy. This can of course be paralyzing, but fortunately we see the number of infections decrease week after week. That is good news and Spain is slowly emerging from the lockdown and with that new prospects arise for the future. After all, buying a house in Spain remains a dream for many people. Spring is usually the time to orientate yourself on a purchase and financing for a second home in Spain. With the arrival of COVID-19, the world suddenly is different. We cannot travel, so viewing is not that easy now. Fortunately, inventive solutions such as viewing virtual houses and conducting advisory conversations via video or telephone are often possible. A purchase or application for a Spain mortgage can therefore simply take place remotely.
During this pandemic, many realize that life cannot be taken for granted, which is why we receive a lot of questions from our customers. We have selected the top questions below.
The COVID 19 pandemic has made all of us much more aware than ever of the value of our home. As millions of people around the world were forced to stay indoors, the worth of ‘home sweet home' came to the forefront. We have now discovered how important our home is and also the outdoor living space. Most people have found that their home wasn't quite what they need or that they would like a larger terrace or garden and wish to upgrade as a result. At the other hand others, driven perhaps by economic necessity, want to sell. But what is buying or selling a home in COVID 19 like? In this article, I offer my top tips based on what we have seen as an Estate agent over the last nine months.
No, that is not (yet) possible at the moment. I expect this to be allowed again soon, depending on the development of the virus. I would therefore like to advise my clients to issue a power of attorney to their lawyer. With that power of attorney, your Lawyercan just act for you, provided you are in possession of a NIE. You do not have to travel to Spain yourself. Your purchase will then be made entirely from your home from your easy chair.
Whether you're buying or selling a property in COVID 19, you may be surprised to find a competitive market. The Real Estate sector in Spain, in common with many other countries, has shown strong signs of activity since early April. Even in lockdown, sales continued to take place, and on balance, the market did not fare that badly. In year-onyear terms, sales dropped by 19.46%, a surprisingly low figure considering that Spain was in lockdown until well into June. For buyers, this means being clear on what you're looking for and keeping a close eye on the market. That way, you'll be able to make an offer on the right property when it comes along. For sellers, a busy marketplace translates to making sure you show your property in its best possible light to stand out from the competition.
Bottom line: it's a competitive market, so both buyers and sellers need to be super prepared.
Marquanthouses goes virtual as far as possible. This tip applies whether you're buying or selling a home in COVID 19. Because health and safety regulations mean that it isn't always possible to visit a property physically. For sellers, this means showing your house in the best possible light to compel prospective buyers to view your property. Use our Home Stager to help you to declutter and display each room to its best advantage. Our professional photographer will take pictures of your property. You can even hire the photographer to get a 3D walk-through and/or video so that buyers have a real idea of your home. For buyers, this means choosing an agent whose listings have professional photos, videos and/or 3D walk-throughs. Who do thorough research beforehand to narrow down your preferred list of possible must-sees.
Bottom line: choose an agent whose website shows properties in as much detail as possible. This includes photos, videos and the description. Buyers will save time, and sellers will attract more potential buyers for their property.
Apart from the very occasional exception, prices are maintaining a more or less even keel. Figures from Tinsa for August revealed that prices rose in the month by 0.1% in Spain and were 1.8% lower than March. All in all, prices for New Build went up by 0.9% in the year 2020 !
If you're buying a home in COVID 19, don't expect to come across that many bargains. You may be disappointed to find that prices have fallen very little. Most analysts point to Resale decreases of between 5 to 10% in December 2020 compared to prices in February 2020. As always, a lot will depend on the reasons behind a sale. Price adjustments depend mainly on the individual necessities of each one and the urgency to sell”. The more quickly a vendor needs to sell, the bigger the price adjustment.
Bottom line: I think that unless you're an investor, it's more a case of finding a property to suit you within your budget and take advantage that it is a buyers' market at present than waiting for significant price drops.
For sellers, the slight shifts in property prices do not necessarily mean your property is worth more than its market value. Take advice from a Real Estate agent in your area and set the right price. Remember that in all markets – with or without COVID 19 – your home is only worth what someone is prepared to pay you for it.
Being squeaky clean is paramount when you're buying or selling a home in COVID 19. Masks are of course, obligatory for both parties during viewings, and you must practice social distancing. Hygiene is paramount when viewing a home in COVID times Sellers need to make sure their home is as clean as possible – I recommend a thorough clean before each viewing taking extra care to disinfect door handles and surfaces. Marquanthouses will have hand sanitizer available for both parties and you may wish to give potential buyers gloves when they arrive.
Bottom line: be a respectful and safe seller or buyer to ensure the best impression. It may stand you in good stead in negotiations.
You can receive full mortgage advice, receive a quote and open a bank account if you reside within the EU. However, it is important that you already have a NIE number. That is actually the only condition. A NIE application is the only thing that is currently not (yet) possible but is necessary for a transfer and Spanish mortgage. You will have to pay IVA (VAT) for new construction or transfer Tax (for existing construction) on your home, so you need a tax number. In Spain this is called a NIE number.
A “NIE”, acronym of “Número de Identificación de Extranjero (Foreign Identification Number)” in Spain, is a unique and permanent number (lifelong) and identifies you as a registered foreigner –resident or non- resident - before any public or private body. In general, you will need a NIE for conducting operations in relationship with public or private procedures: contracts, banking, property sale, access to any educational, commercial or administrative services, notaries, etc. Normally we would arrange this in Spain but when you are not traveling to Spain (yet):
*You are also able to request a NIE number at the Consular Section of the Embassy of Spain in your home country. For NIE application, prior appointment is required.
*EX -15 Form (provided/admitted only in Spanish language version) in order to apply for a N.I.E. English Instructions to complete EX-15 Form here. Please note these are only instructions and is NOT the application form. Applications will only be accepted in the Spanish version.
*790/012 Form (only available in spanish language) in order to pay fee.
When entering website, it offers to you one option (left document on the screen). Clicking on "Rellenar formulario y descargar" you will get the form for filling in (click here for help) and follow the instructions in order to get a printed/registered copy of the form (with bar-code) and bring it to the Embassy. The printed form is only valid for one NIE applicant. If there are several applicants, you need to restart the process again and print a new bar-coded document.
*Fee: Spanish Government fee (Less than € 15,00), which you should pay at the bank using above mentioned 790 NIE form.
*Two small photos
*Accompanying documents: along with your application form you have to present your passport (original and photocopy).
This takes 1 day to up to 2 months depending on the way you do it. So plan accordingly!
Nowadays the bank will check whether COVID-19 has an impact on your disposable income as an entrepreneur or when you are employed. Ultimately, if the income is sufficient, there are no objections or adjustments to the conditions. Interest has risen slightly in the past 11 weeks, but we expect this to be only temporary. Some banks lower the maximum advance payment for residents from 80% to 70% of the value of the home. For non-residents, 70% is the maximum anyway.
Mortgage interest rates in Spain have never been lower, and competition for your business from banks has never been higher. The transactions are taking longer than usual, and banks are generally more cautious about who they lend to.
If you're serious about buying a home during COVID 19, get a preapproval for your mortgage right at the start of the process. Under the revised mortgage law from 2019, you have to allow a minimum of 10 days between a mortgage offer from a bank and your acceptance of it. Add this to the time to get approval, and you're looking at a period of several weeks.
Bottom line: the sooner you get preapproval, the sooner you can act on getting the property of your dreams. Do expect things to take longer, over the last few months, we've all discovered how simple things such as going to the post office and getting your car serviced take more time than they did pre-pandemic.
The same applies to buying and selling a home in COVID 19. While Notaries and Land Registries continued to operate during the lockdown, there was scope for far fewer transactions, and those that did take place took longer. Over six months later and although the situation has improved, COVID 19 restrictions mean you still need plenty of patience!
Bottom line: Please make sure your purchase contract allows flexibility for things to take longer. Before fixing a deadline for completion, take advice from your property agent and lawyer on a realistic date.
This is is not (yet) possible at the moment. We expect this to be allowed again from mid-June, depending on the development of the virus. We therefore advise clients to issue a power of attorney to their lawyer. With that power of attorney, you can simply pass, provided you are in possession of a NIE. You do not have to travel to Spain yourself. Your purchase will then be made entirely from your "easy chair".
Do you want to buy a holiday home in Spain and do you expect a bargain? At the moment we see little change in price. Opportunities will of course come along and in some cases we see a slight price drop. However they are more individual in nature, it is not a market movement in a general sense. Now that it seems that we have passed the peak of COVID-19, we do not expect that decline to continue.
Our opinion is that at all times it should feel good. Buying a home abroad is a big step. However with the proper guidance of the right Real Estate Agent, such as MARQUANTHOUSES it will become simple for you. With Marquanthouses a Lawyer and a Mortgage broker and Notary in Spain a purchase and financing even from a distance is easy to do in 2021. Once you have made the decision, you will be amazed how easy the process is if you engage the right professionals for it.
At MARQUANTHOUSES, I specialize in helping buyers to find their Dream Home and in assisting vendors in finding the their buyer. After 25 years focused on property sales on the Mediterranean Coast, Spain, I have a long track record of buying and selling property. And best of all, I love doing it. I think actually it is A SPANISH PROPERTY AND LIFESTYLE PASSION.
I hope you will find my article useful, please contact me for any question you might have. Let me help you to find your ideal home or sell your current one.
Angelique Van Walsum
Real Estate Agent
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