Buying a Flat in Barcelona
This city has the tendency of gripping on and not letting go and if you’ve been here for a while you might consider buying a flat in Barcelona. Although the property bubble of recent years has crashed, an apartment in Barcelona remains one of the most expensive properties in Spain.
It is important to go and visit as many flats as possible within the price range you have selected. There are two ways of finding apartments and houses for sale. Firstly, you can go through an estate agent. Normally Spanish speaking, the estate agent will show you a selection of flats within your price and arrange a visit. The second method is to find a private sale, either through online real estate and classifieds portals, or small ads on notice boards or in the street. You can telephone the seller directly and arrange to go and visit the flat. The advantage of a private sale is that the estate agent doesn’t take a cut, normally 5% of the final cost. The disadvantage is that all negotiations are carried out directly between the buyer and the seller which can be stressful and sometimes unpleasant.
Putting down a deposit
When you have decided upon a flat make sure you visit twice as first time opinions can be deceptive. The next stage is to put down a deposit (pago señal) on the flat. If you go through an estate agent, a deposit constitutes about 5% of the total value; if your flat is worth 190.000€ the deposit would be around 9.500€. Once the deposit has been paid, the Estate agent will give you a contract (contrato de arras) and will reserve the flat for a specified amount of time, between one and three months. In this time period, you must secure a mortgage and if you are unable to do this you will lose the deposit.
Getting a mortgage
So far so good, next comes the hard part – getting a mortgage. Normally the estate agent will look around to find you the best mortgage loan offer. If it is a private sale, or if you have special circumstances – such as being foreign, you might have to make the mortgage arrangements yourself. This involves visiting banks and requesting a mortgage loan. Every bank gives different interest rates on mortgage repayments and it is worth shopping around as it can make a big difference on your monthly repayments. There are two figures that are important. Firstly, the TAE which is the initial interest rate for the first six months. A good TAE rate would be 2.5%. The most important figure, however, is the interest rate after the first six months. This is the Euribor, which is the set European interest rate that changes every year. Many banks offer excellent TAE rates but high individual rates that only come into effect after the first six months. You might also find that bank managers do not explain clearly what each interest rate means.
Signing the contract
Once you have been approved for a mortgage loan, the bank will set a date with the solicitor and the estate agent to sign the contract for both the property sale and the mortgage loan. On this day the buyer, the seller, the estate agent representative, the bank manager and the solicitor will be present. Be prepared for the seller to want to take a share of the total price as “black money,” or cash. This is a common, albeit illegal, practice in which the full price quoted on the contract for the property sale is less than the asking price, which is then given in cash to the seller so that they can avoid paying tax on this money.