GUIDE FOR THE PURCHASE OF A SECOND-HAND HOUSE

1. INDICATIVE PRICE

The first step before buying a house is to decide on an indicative budget.

The amount that should be allocated monthly for the purchase of the property should not exceed 40% of the monthly net income.

1. Divide your annual net income by 12.
2. Calculate 40% of that monthly income (multiply by 0.4): this would be your “ideal monthly mortgage payment”.

From this monthly payment, you now know the amount of the mortgage you can apply for.

You can add to the mortgage the money you have saved.

You must also consider the initial costs of purchasing your home, which can be calculated between 10% and 12% of the price.

These expenses have to be paid upfront and therefore, should be added to the selling price, considering it a higher acquisition cost.

The amount of the mortgage, plus your savings, would be the price of the home you should look for (which will include the expenses).

2. EVALUATING THE AREA

The second step is to decide on the area where you want to buy your house. This choice will be influenced by emotional factors (proximity to parents, family, friends, the neighborhood “of a lifetime”...) and objective factors (area prices, transport, parking, green areas, shopping centers, urban services...). Both are important and taking them into account will help you make an informed decision.

1. Accessibility and the nearest transport options to and from work. This can save significant time and money.
2. The stores, food services, and leisure centers.
3. Health services.
4. Schools, high schools, and nurseries if you have children.
5. Parking situation.
6. Leisure areas, outdoor activities, and sports facilities.
7. Urban plans or construction of public works in the area can benefit or harm the home and its surroundings. The municipality will provide this information.

3. DECIDING THE AREA

If you have decided on the area and have an indicative price of the home you want to buy, you can search with more assurance of success. The options are numerous: specialized real estate press, classified ads, real estate supplements of newspapers, municipal or regional services, online real estate portals, scouting the area, or going to a Real Estate Agency.

A very good option is to go to a Real Estate Agency, which can inform you of the real offer in the area, with the desired characteristics in order to advise you on the convenience of the operation as well as all the necessary procedures to ensure that it is carried out with all guarantees.

The intervention of an agency does not increase the purchase cost since it is the seller who hires its services, so it is the seller who will pay their fees.

Keep in mind that the Real Estate Agent can save you many trips and unnecessary management, as well as disappointments since a prestigious Real Estate Agency cannot risk participating in an operation in which one of the parties may be disadvantaged. If you can clearly communicate your needs and the type of housing you are looking for, the intervention of a good professional ensures success.

4. AREA OF THE HOME

The area of the home is one of the most important features, although it is useful to clarify the terminology used most frequently.

Built area (constructed meters): is the area of the home including all elements, such as walls, beams, partitions, and terraces. Normally, this is the data reflected in the plans of the home.

Usable area (usable meters): is the total area minus the thickness of the walls, beams, partitions... It is normally about 15% less than the built area. In the case of terraces, if they are open, half of their area is considered in the calculation of the usable area.

Total or computable area: is the built area to which the proportional part of the common elements is added. Common elements refer to spaces shared by all neighbors, such as the portal, staircase, gardens... The built area relative to the total area of the building, including these common areas, is what normally defines the share of participation of the home in the community expenses of a flat and is the basis for the appraisal of the home.

5. CHARACTERISTICS OF THE HOME

When you are in front of what could be your future home, consider among other aspects:

The space and general distribution of the house: number of rooms and bathrooms, external windows in the rooms, hallways, foyers, pass-through rooms, built-in wardrobes, storage rooms, and other storage spaces.

The orientation of the home: External ones usually receive more natural light, the internals are often quieter. Those oriented towards the interior of a block are usually quiet. Homes facing south are often valued more for the quality and quantity of natural light.

The quality of the construction and finishes are guarantees of safety, solidity, and quality. Observe the paint, tiles, parquet, skirting boards, moldings...

The state of conservation of the own and common elements: structure of the building and possible cracks or dampness.

Water circuit: it is necessary to check that the faucets can be opened simultaneously without losing water flow. And that the hot water system adapts to what you need.

The gas installation: whether it is natural gas, city gas or butane and if the installation complies with official regulations. If not correct, the company will require you to make the necessary changes.

Electricity: check outlets for appliances, heating, air conditioning, and ensure they have a ground connection.

The type of heating: if there is and what type, electric, central, air, or individual.

Air conditioning or heat pump: whether it is pre-installation or installation and whether the system is autonomous or centralized. If the power is adequate for the m2 and the orientation of the room to be air-conditioned.

Doors and windows: that provide light, ventilation, visibility, and thermal and acoustic insulation for your comfort and for energy savings.

6. THE GARAGE

The garage space is another important aspect that may condition the choice of the home.

Keep in mind:

1. The ease of access to the garage: entrance, opening system...

2. Dimensions of the space and ease of use.

3. Direct access from the garage to the home.

The garage is also a property, that is, it is an urban space and a property for the purposes of the Property Registry. The garage space can be in two legal situations:

1. It can be an inseparable annex to the home. In this case, by being the owner of the home you will be the owner of the garage space. Normally, in this case, we will find in the Property Registry a single entry referred to the home and the garage space.
2. The other option is that it is an independent cadastral property and whose purchase, therefore, must be made separately. However, to save expenses, the same notarial document of the purchase of the home can be used, specifying on one hand the purchase of the home and on the other that of the garage. In the Registry, on the other hand, there will be two entries, one for each property.

Note: If the purchase is being made through a Real Estate Agent he will be able to inform you about the situation of the home, the procedures, and the documentation that you must provide or they must provide you. Otherwise, you should know the essential prior checks for the successful completion of the operation.

7. THE CITY HALL

One of the prior pieces of information is to check the situation of the home in urban planning terms. This involves consulting whether future urban plans pending approval, in the public consultation phase or execution, may affect the home or its environment by altering the circumstances that influence your decision.

8. THE PROPERTY REGISTRY

It is a public and official archive where all acts and contracts relating to property and other rights over real estate are registered.

The Registry identifies who is the current holder and if the property is encumbered with a mortgage or any other right, such as seizure annotations, resolutory conditions, rights of usufruct, leases, purchase options, etc.

You must ensure that the home is free of encumbrances, that is, up to date with the payments of taxes, fees, censuses, judicial seizures, etc.

If the home is encumbered with a mortgage in which you do not want to subrogate or with any other charge, the seller must cancel it economically and registry-wise before signing.

9. COMMUNITY OF OWNERS

You must request through the administrator of the building or the community of owners the certificate that certifies that the home is up to date with the community payments.

The Notary must record that such certificate is provided. In this way, it is avoided that delinquent owners with the community sell without canceling these debts.

Find out if there is a planned special levy for extraordinary expenses, some work or rehabilitation, elevator, facade, etc. that will incur future expenses that are an obligation of which the home responds regardless of who is the owner.

You should also take into account the monthly community expense and the number of neighbors.

10. TAXES AND THE HOME

Homes pay taxes, or rather, their owners do. It is important to know the payment situation of the Property Tax (IBI). Check that it is up to date with payments since the home is liable for the last two immediate annual payments. The cadastral reference must be recorded in the deed and is necessary for registration in the Registry.

In a transfer of a home, taxes are collected by the State Administration, the Autonomous Administration, and the Local Administration. Therefore, it is necessary to seek advice from a professional who can inform you of the costs that, in this case, this transfer would entail. Remember that an error in the settlement of these taxes considerably increases the cost of the operation.

11. OTHER DOCUMENTATION THAT THE REAL ESTATE AGENCY REVIEWS BEFORE FORMALIZING THE SALE

If the home you want to buy is second-hand before buying you will have to review, among other issues, the following documentation:

1. Title of property of the transferor.

2. Situation regarding the IBI (Property Tax or Urban Contribution).

3. Community of owners that certifies that the seller is up to date with the payment of community expenses, as well as the rest of the co-owners.

4. Ownership and state of encumbrances of the home.

5. Situation regarding utility services.

6. ITE, Technical Building Inspection, regulates the conservation of buildings. Mandatory in some Autonomous Communities.

If you buy a home in development, the available information varies a bit since there is no community of owners, which is usually constituted once all the homes are delivered. There is also no IBI, and in the Registry may appear only the parent estate, without identifying each of the homes since the developer has not yet carried out the Horizontal Division.

1. Name or corporate name of the developer, and situation in the Commercial Registry.

2. Plans of the location of the property and the home.

3. Description of the home: usable area, services and supplies, common areas, security measures, etc.

4. Quality report.

5. Registration data of the property in the Property Registry.

6. Contract with its general and special conditions (price, payment method, delivery time...).