There are many advantages in buying a modern resale home, which may include better value for money, an established development with a range of local services and facilities in operation, more individual design and style, the eradication of ‘teething troubles’, furniture and other extras included in the price, a mature garden and trees, and a larger plot of land.
With a resale property you can see exactly what you will get for your money (unlike when buying off plan), most problems will have been resolved, and the previous owners may have made improvements or added extras such as a swimming pool, which may not be fully reflected in the asking price. Another advantage of buying a resale property is that you will save on the cost of installing water and electricity meters and telephone lines, or the cost of extending these services to a property.
Modern resale properties often represent good value, particularly in resort areas, where many apartments and townhouses are sold fully furnished, although the quality of furnishings varies considerably (from luxurious to junk) and may not be to your taste. It’s increasingly common for luxury properties and villas, e.g. costing upwards of around e500,000, to be sold furnished. When buying a resale property in a development, it’s advisable to ask the neighbours about any problems, community fees, planned developments and anything else that may affect your enjoyment of the property. Most residents are usually happy to tell you, unless of course they’re trying to sell you their own property!
‘Old’ properties in Spain
If you want a property with abundant charm and character, a building for renovation or conversion, outbuildings, or a large plot of land, then you must usually buy an ‘old’ property, i.e. a property that’s 50 or more years old. However, there’s a relatively small market for old country homes such as farmhouses in Spain, particularly inexpensive properties requiring renovation, as the prices are usually too low to interest most agents. Most old homes purchased by foreigners are in the hinterland of Andalusia and Costa Blanca, the foothills of the Pyrenees and the Balearics. In many rural areas (including villages close to the coast) it’s possible to buy old properties from as little as e50,000, although you will need to carry out major renovation and modernisation, which usually trebles the price.
Many old homes lack basic services such as electricity, a reliable water supply and sanitation. Because the purchase price is usually low, many foreign buyers are lulled into a false sense of security and believe they’re getting a wonderful bargain, without fully investigating the renovation costs. If you aren’t into do-it-yourself in a big way, you may be better off buying a new or recently built property.
Buying a property that need renovation
If you’re planning to buy a property that needs restoration or renovation and you won’t be doing the work yourself, obtain an accurate estimate of the costs before signing a contract. You should consider having a survey done on a resale property as major problems can even be found in properties less than five years old. Note that some old properties have no deeds ( escritura) and ownership may be proved by a document issued by a court called an expediente de dominio.
If you buy and restore a property with the intention of selling it for a profit, you must take into account not only the initial price and the restoration costs, but also the fees and taxes included in the purchase, plus capital gains tax if it’s a second home. It’s often difficult to sell an old renovated property at a higher than average market price, irrespective of its added value. The Spanish have little interest in old restored properties, which is an important point if you need to sell an old home quickly in an area that isn’t popular with foreign buyers. If you’re buying for investment, you’re usually better off buying a new home.
Owners often advertise properties in the Spanish and expatriate press or by simply putting a ‘for sale’ ( se vende) sign in the window. Although you can save money by buying direct from an owner, particularly when he’s forced to sell, you should always employ a lawyer to carry out the necessary checks. If you’re unsure of the value, you should obtain a professional valuation.
This article is an extract from Buying a home in Spain. Click here to get a copy now.