7 top tips for buying a property
Buying a house is one of the biggest decisions you'll ever make. Whether it's your main home or a second property for the holidays, it's not always easy to know what steps to take, especially if you're applying for a mortgage. To make the process as stress-free as possible, we've put together a list of seven top tips we hope will come in handy.
1. If you need to apply for a mortgage, crunch the numbers before you start house hunting and see how much you can afford to pay each month without impacting your lifestyle.
Experts say that allocating up to 35% of your monthly income to your mortgage payments should allow you to live comfortably with no major shocks.
2. If you've already found a property you're interested in buying, contact your bank and find out how much you could borrow.
They'll generally be prepared to lend up to 80% of the property's value, but will not take into account costs related to deeds, notaries, registries or valuation. On average, these costs will add up to between 10 and 15% of the total property purchase price.
3. Take into account any VAT you might need to pay on the purchase.
If you're buying a new-build, you'll need to add 10% VAT to the purchase price. If the property is pre-owned, you won't need to pay VAT but you will need to pay stamp duty, or Property Transfer Tax. This tax differs by region, but is between 6% and 8% on average.
4. If the property is pre-owned, find out what condition it is in and request the legal documentation to check there are no liens against the property.
You can do this by going to the Land Registry and requesting a property registry extract (nota simple).
Visit and ask questions
5. Visit the property as many times as you need to and ask the agent or owner any questions you might have.
Find out about the general costs involved in owning the property (IBI property tax, owners' association fees, home insurance and utilities, for example) and whether there are any additional maintenance or repair charges payable. If necessary, request floor plans and building specifications.
6. Once you are sure, notify the owner that you agree to the purchase price or make an offer.
If your offer is accepted, you'll need to sign a deposit agreement (contrato de arras) and make a down payment.
7. Once you've signed the deposit agreement, all that's left is to sign your mortgage agreement and complete on your purchase.
This usually happens on the same day and is witnessed by a notary public. Once you've completed these steps, you'll be the new owner of the property and the keys will be handed over. Congratulations, it’s finally yours!
If you're interested in buying one of our properties, The Singular Space will be here to help you every step of the way.
There is a guide on our website outlining the most important steps to follow.
But still, feel free to get in touch. We’d be delighted to help.