Buying a property is a very important and exciting moment in life. It is a moment of illusion and future projection. At Prime Invest we know that the buying process can be tedious for the average person. That's why we want to help you understand the milestones that take place and the steps you need to follow from the time the last brick is laid until you finally take delivery of your new home. During this period, certain formalities must be carried out.
Firstly, once the work is finished, the Construction Management of the construction company issues the Certificate of Completion of the Work (CFO) and gives it to the promoter, this document is also endorsed by the Architects' Association. With this certificate in hand, the promoter goes to the Town Hall and presents the Responsible Declaration.
The Responsible Declaration has simplified the application process for the First Occupancy Licence (LPO) both in terms of procedures and time. The responsible declaration is presented to the corresponding Town Hall and is a declaration by the interested party to initiate an activity under their own responsibility, ensuring compliance with all the legally applicable requirements. This declaration has the same validity as the LPO, for the purposes of granting public deeds of sale or declarations of new construction for subsequent registration in the Land Registry.
Once these formalities have been completed, the developer gathers all the necessary documentation and presents it to the Notary. At this point, the "Acta de Final de Obra (AFO)" is signed, which certifies that the works and constructions have been executed and finished in accordance with the project and the licences previously granted. This act is registered in the Land Registry and means that the individual properties are no longer listed as "work in progress" but as "finished work". Normally there is a period of 3 weeks from the moment it is presented until the inscription is published in the Register and therefore reflected in the nota simple of the property of your home.
It is at this point that the process of deeds and handover of the property begins and when your private contract can be converted into a public deed, in order to complete the legal business of the sale and purchase.
graphic procedures
Now that you know, broadly speaking, the procedures that must be carried out before the handover of a property takes place, let's learn about the steps that you, as the buyer, must follow.
Imagine that you arrive at a development whose construction is finished, you see the house of your dreams and you decide to buy. When buying off-plan, the usual process is to sign the reservation contract, which blocks the property from the market in your favour, then the private purchase contract, and finally the deed before a Notary.
When the work is finished, it is usual to dispense with the private contract, and only sign a reservation with a reduced amount and to sign the deed within 30 to 90 days. If the buyer is a foreigner, it is essential to provide a Foreigner's Identity Number (NIE) and a Spanish bank account.
Prior to the formalisation of the sale and purchase before the Notary, the buyer must pass a process of Prevention of Money Laundering (PBC), in which the objective is to verify that the client has obtained the funds for the acquisition of the property in a legal way, this can be demonstrated, for example, by providing the last 3 payslips, the tax declaration, the deed of sale of another property, etc. It is compulsory to obtain the approval of the PBC Audit before going to the Notary.
During this process, if you have not seen your completed property, you can make a courtesy visit. The courtesy visit is not to be confused with the post-signing visit, where the checklist is made.
With the PBC process approved, the documentation in order and the courtesy visit carried out, the big moment arrives: the Formalisation of the Sale and Purchase before a Notary.
graphic doc
Before starting the whole process, you will have had to fill in a form, often called Know Your Costumer (KYC) in which you indicate whether you are buying with your own funds or with mortgage financing. Let's look at both cases:
Own funds.
At the risk of being obvious, if you buy with your own funds you do not need to contact a bank. You only need to be able to provide the necessary economic documentation that can support that these funds have been obtained legally.
Remember that there is a period of 3 weeks from the moment the promoter presents the AFO until the inscription in the Land Registry is made and finally published. Within this 3 week period, it is common practice that the buyer, if he so wishes, decides to formalise the deed before a Notary Public.
Subrogation or third party mortgage financing.
If we opt for financing, there are two options:
Subrogation to the developer's loan. The buyer has the possibility of taking the place of the seller and becoming the new debtor of the loan that the developer requested for the construction of the property. Normally the conditions of this type of financing are usually more advantageous for the buyer. It should be borne in mind that, by opting for this type of financing, our mortgage will be with the bank that has financed the developer and therefore we would save on expenses such as the appraisal.
Mortgage loan with other entities: The other option would be to apply for a new mortgage with the financial entity of our choice.
Once you have decided which financial entity is going to manage your mortgage, it is time to move forward with the processing of your mortgage.
To do this, you will have to present documentation on your personal, employment and tax situation, which will be essential to carry out the feasibility study and risk assessment. As a general rule, a bank usually takes between 15 and 45 days to give you an answer.
Once you are informed if the mortgage is approved, we move on to the appraisal, registry verification and, finally, final approval. But before signing the mortgage, the current law aims to ensure that the interested parties understand what they are going to sign. To this end, a process has been implemented:
Delivery of the FEIN (European Standardised Information Sheet) and the FiAE (Standardised Warning Sheet).
Delivery of the draft contract, with all costs broken down.
Complete information on the costs of the operation, and to whom they correspond.
Delivery in writing of the conditions and guarantees of the possible insurances contracted.
A signed statement from the borrower. This signature will ensure that you have received all the above information and that it has been explained to you.
Mandatory and free advice before a notary to be chosen by the borrower. This last advice before a notary will corroborate that you have fully understood the contracts, products, interests, bonuses, and other obligations and rights that you have as a borrower.
You are now ready to sign the purchase and mortgage deeds and become the owner of your new home!
Find your perfect Property