A Buyers Guide - The important questions

Our guide answers the most important and commonly asked questions when considering purchasing a propety in Spain.

1) WHAT IS THE REAL COST OF BUYING A HOME IN SPAIN
When you purchase a home in Spain as in the UK you have several costs which you must factor in to your total budget. Property purchase taxes, notary fees and other costs are unavoidable in Spain and you must allow 8% on top of the value of you purchase to cover your puchase costs, or, 10% if you intend to arrange a mortgage in Spain to fund your purchase.

For example a villa with a purchase price of €300,000 will cost approximately €330,000 euros in total if you wish to arrange a Spanish mortgage to fund the purchase. (For a full breakdown and explanation of these costs please contact us)

2) DO I PAY ANYTHING TO YOU, THE ESTATE AGENT?
Our service to you the buyer is completely free of charge as all of our fees are covered by the commission we make when we sell a vendor´s property on their behalf. Our services, including mortgage advice and arrangement, expert rental advice and as much of our time as you require viewing properties is provided at no charge to yourself.

We also offer tailor made trips from the UK to view properties from only £99.99 per person including luxury villa accommodation for the duration of your stay.

These are not subsidised high pressure sales trips, you can stay as long as you like and we do not expect you to buy.

Frequently your accommodation whilst here will be provided by our rental division - www.directvillaholidays.com

3) IF I NEED A MORTGAGE HOW MUCH CAN I BORROW?
It is relatively simple to get a mortgage of up to 80% of the value of the property and where the bank valuation exceeds the purchase price it is frequently possible to borrow nearly 100% of the purchase price. Spanish banks offer much lower interest rates than their British counterparts and most Spanish banks do not run sophisticated credit checks. As long as you have 30% of the property's value available from the UK then Moraira Estates can definitely help you to secure a mortgage very easily whilst you are here.

9) WHAT PROJECTED RENTAL INCOME COULD I MAKE, HOW DO I GO ABOUT RENTING?
We offer a totally unique service in this respect, www.directvillaholidays.com is a subsidiary of Moraira Estates and can offer very accurate rental income projections in advance of your purchase and in some cases a guaranteed annual rental income.

Villa Holiday Direct has grown to become one of the largest villa rental companies on the Costa Blanca offering low rental comissions and excellent rental returns to property owners.

In many cases annual repayments on a 70% mortgage can be fully covered by only 12 weeks of holiday rental leaving the remaining 40 weeks free for your own use. The right choice of property is essential as rental returns are not governed by property price and the right type of property must be chosen. Please contact us for an in depth appraisal of the rental income that the type of property you intend to buy can achieve and the factors that make the ideal rental investment. For more information online see our Buy2Let examples page.

10) WHAT SIZE OF DEPOSIT DO I REQUIRE?
If you see a property you wish to purchase you first need to make an offer which must be relayed and hopefully accepted by the vendor. You must then lodge a €3,000 reservation fee with Moraira Estates which is payable to the owner, this does not obligate you to buy the property but allows us to take the property off the market whilst the private purchase agreement is arranged and surveys and mortgages performed if necessary. (N.B. This deposit is non-refundable and kept by the vendor should you later pull out of the sale.)

Later, at the time of signing the Purchase Contract (usually within 2 to 3 weeks of paying the reservation fee) a 10% deposit must be made and a completion date contractually agreed, the €3,000 euro reservation fee is deducted from the 10% deposit required.

11) DO I NEED A SOLICITOR TO PURCHASE A PROPERTY?
We can assist you with finding a good, reputable solicitor to handle the legal aspects of the purchase process. We will also assist you in finding a surveyor for a full structural survey if this is required. Legal fees for the purchase of a property are very reasonable in Spain and range from €500 to €1500 euros.

12) CAN MORAIRA ESTATES ASSIST IN THE MANAGEMENT OF MY PROPERTY?
In your absense you may wish your house to be managed. We offer a complete service through our subsidiary www.directvillaholidays.com that includes, key holding services, pool cleaning, gardening, maintenance, cleaning and linen services and regular property checks if required.

13) WHAT ARE THE PROSPECTS FOR CAPITAL GROWTH ON THE COSTA BLANCA?
The towns of Moraira and Javea now offer an attractive alternative for sophisticated customers looking for quality beaches, restaurants, shops and infrastructure at a lower price than the Costa Del Sol, Mallorca and other more established expensive parts of Spain.

Property prices in Moraira and Javea are still low in comparison to their more established couterparts and this bodes very well for continuing future property price rises that buck current the national trend of stagnant or declining values.

This is particularly true at the higher end of the market.

14) IF I SELL MY PROPERTY WILL I PAY CAPITAL GAINS TAX?
The simple asnwer is yes, if the price rises the tax equates to 18% of the gain you have made, this equates to approximately 3% to 4% of the value of your property at the time of sale. Please ask us for further details about Capital Gains tax and how it can be reduced or avoided.

15) WHY SHOULD I CHOOSE MORAIRA ESTATES?
We believe we are the best alternative for an investor looking for a Spanish rental investment or for someone considering purchasing a permanent move or holiday home on the Costa Blanca. We offer the widest selection of properties and outstanding personal service before, during and after your purchase.

We look forward to meeting you!

4) CAN I MAKE AN OFFER ON A PROPERTY I LIKE?
In exactly the same manner as in the UK you can make an offer for a property and we relay this offer to the property owner, who can choose to accept or reject this offer.

In the current market it is not uncommon for a Vendor to accept between 10% & 20% lower than their asking price depending on the property and the urgency with which a sale is required.

5) HOW LONG DOES IT TAKE TO COMPLETE MY PURCHASE?
The time it takes to purchase in Spain is generally shorter than in the UK as very rarely are chains involved. Mostly the time the buying process takes is dependent on you the buyer - it can be as short as 2 weeks or as long as 3 months for an existing property or up to 2 years for a property in the process of being built on a new development.

6) WHAT IS THE BEST STRATEGY FOR BUYING AN INVESTMENT?
The European property market is in a period of fairly stable prices and our region has not been affected by the negative press surrounding other less desirable parts of Spain. Rapid short-term capital growth is unlikely unless you are buying a new construction or renovation, although the overall increase in your property's value is likely to average 4 to 5% per annum over the longer term. We advise all buyers looking for an investment to opt for the Buy2Let route and sit on their investment for at least 5 years.

The towns of Moraira and Javea are the most popular villa rental resorts in Europe and yet property prices are still much lower than property prices in for example the Costa Del Sol or in Mallorca. Villas with private pools in this area offer the highest ratio of rental income to property value and buy2let is an ideal, safe strategy for long term gain.

In essence our goal is to find you a property that generates sufficient rental income to pay the annual mortgage payment and running costs, that way you own an appreciating asset that is slowly paying itself off without cost to yourself, leaving you with a substantial sum of equity at the end of the mortgage term. Please see our buy2let page for full details.

7) I HAVE READ HORROR STORIES ABOUT LAND GRAB, COULD THIS AFFECT MY PURCHASE?
This is much less common these days since EU intervention has begun and has only ever affected properties built on land classified as rural or that have previously been built illegally unbeknown to the new purchaser. 95% of of the properties we sell are built on land classified as 'urban' so unaffected by the much hyped land grab laws. If you are buying a rural finca then more care must be taken to ensure: a) that the build is legal and recognised as such by the local town hall b) that there are no plans in place to develop the surrounding area. If you really have your heart set on a country finca on a large plot or wish to purchase a house in a rural location we strongly recommend Title Deeds Insurance which will protect you with monetary compensation should a land grab scenario arise although with changes in the current law underway this is highly unlikely.

8) WHAT ARE THE ONGOING COSTS OF OWNING A PROPERTY IN SPAIN?
The costs of running a home in Spain are lower than in the UK but your monthly outgoings need to be considered (of course rental income can be used to off-set these costs using our Buy2Let Schemes).

Suma (Council tax) - €250 to €1000 per annum
Swimming pool cleaning - €700 per annum (only necessary for homes with private pools)
Utilities (water, gas, electricity) & Insurance - €200 to €1000 per annum depending on usage and size of home
House insurance - Between €150 and €400 per annum