In our last article we talked about the most up-to-date data regarding the purchase of housing without mortgage. And that is why now we want to show you step by step what steps to follow to buy a home in cash.
I know what I want, what now?
Determining the price of the house that we are going to acquire will depend on whether we have initial capital or not, the indebtedness capacity of each one, the tax advantages that the purchase of a home entails, or if we have another previous house that we are going to sell. You can also study the possibility of opening a home savings account.
Buying a second-hand home
Before formalizing the purchase of a second-hand home to a private individual, we must collect information from different institutions.
1. Registration of Property
In the Property Register you have to check that the house is in the name of who sells it; that its location, extension and other characteristics correspond to those that it actually has; which has no charges and is not rented, as well as information on expenses and community statutes.
2. Property manager
With the property manager you will check if the property is up to date with community payments.
3. Town Hall
In the City Hall if the seller is up to date on the payment of Real Estate Tax.
Financial institution, if the property is taxed with a mortgage there are two options: ask the person who sells the home to cancel the mortgage before a notary before signing the contract. Subrogate the mortgage to take care of it.
Buying a home newly built
Before signing any commitment to acquire a home already built, you should check some important aspects. To step on insurance against possible fraud, follow these steps:
1. Commercial Registry. Verify the registration data of the developer or builder (registered office, registered capital, etc.)
2. City Hall. Find out that the building license has been requested and granted.
3. Registration of Property. Check that the ownership of the plot corresponds to the developer or builder. Check also, if there is any other load on the lot (mortgages, foreclosures, etc.)
4. Promoter or builder. Request a copy of the insurance policies required by the Building Management Law depending on the various damages that may appear.
Purchase of a flat or under construction.
Before you commit any amount of money with the promoter, you must gather some information:
1. Approved technical project and building permit.
2. “Cédula Urbanística” which can obtained from the town hall, with which you will avoid surprises as to the possible inexistence of complementary equipment offered (green areas, playgrounds, etc.) or in terms of public use.
3. Certificate of the Property Registry that reflects the registration of new work and the ownership of the seller, and the situation of charges and levies on the farm.
4. The promoter must guarantee, through an insurance policy or a bank guarantee, the amounts delivered on account plus the legal interests of the money, in force until the return becomes effective.
The one million dollar question: Should I register the property?
You may be wondering if it is worth spending time and money drawing the deeds and then registering the home you have purchased.
If you have doubts, here are three good reasons to have the purchase done in a notary and then register the purchase:
• If you want to apply for a mortgage loan using your new home as collateral, it must be registered in the Property Registry. And so that you can register your home, it is first necessary that you have raised the private contract of purchase and sale to public deed.
• Once you have notarized and registered your home, you have the full assurance that the home is yours: no one else can claim it.
• You also have the assurance that the contract is fully compliant with the law.
How do you draw the deeds?
The usual practice in the purchase of a home is the signing of a private purchase agreement, and then put it into public deed. Once the private contract has been issued to a public deed, in order for it to have effects against third parties, it is necessary to register it in the Property Registry where the dwelling is located. To make the registration you must have paid the corresponding taxes.
As in all my previous articles I do strongly recommend to obtain the aid of a qualified solicitor before purchasing a property and that you only use this article as a guide line of the procedures.