(SEARCH INVESTMENT AND CONTRACT SIGNATURE)
When buying a house there are five essential things we have to keep in mind: the search for adequate housing for our needs, the signing of the sales contract and paying the price of the property, the payment of taxes associated with the sale, registration of the property in the Land Registry, and the analysis and management of costs associated with the purchase of such housing and maintenance.
In this first part we will analyze a little deeper the first two aspects.
SEARCH FOR INVESTMENT
Probably the most important time of an investment is to know where we will invest our money, and will therefore be essential to make a thorough selection process that allows us to obtain the property that best suits our needs.
First we have to find out what the needs we want to cover with the purchase of a property, since for example, the characteristics of a building for the lease are not the same as a building intended to establish a permanent residence.
Once we have identified what the needs we want to cover our investment, we set the most important parameters that must be in investments to meet the requirements, and thus proceed with a search and selection of those properties that meet the minimum requirements and analyze in depth the details in order to choose the best of the options.
Among the highlights aspects that should be taken into mind when deciding between a property and another are: the physical features of the property and the legal status of same.
Check these two aspects becomes more complex when shopping on properties have not yet been developed, such as in the purchase off plan are made, so that prior to the delivery of any amount or signing any contract you should check that: the natural or legal person that we will carry out the purchase exists and is authorized to perform the operation, and in the case concerned a legal person, also the person acting on its behalf is adequate, and we can find this information in the Commercial Register; the primary property on which will make the object of the investment is owned by the person who signed the contract (or its duly authorized representative), and we can find this information in the Land Registry; and finally, that the property investment object has the authorizations and licenses required for the project implementation, which we find in the Land Registry or the corresponding City Council.
Once the developer has completed the property subject of the investment, and before signing the deed, we must ensure that the work has been completed according to the description set forth in the initial contract and have established the insurances to cover possible defects in construction, which is able to find in the Land Registry.
We will develop the two main aspects to consider (mentioned above) that we do before buying a property that already exists:
The physical features of the property
It is essential carry out a physical visit to the property to check that its features correspond to those offered (quality, facilities, condition, etc …), and also its accessibility, environment and services of Interest.
The legal status of the property
It is essential to know who owns the property and whether there are charges or encumbrances (mortgages, liens, etc …) on it. Parallel must be checked whether there are tenants, rights of third parties, or a special scheme that limits their availability and ensure that the property has insurance in force when this is stipulated or that are current in the payment of expenses and taxes.
All this information is essential to have prior to the delivery of any amount or signing any contract basis. To know these circumstances we must address both the seller (authorized copy of the deed of sale, receipt of taxes, certificates of current payment, etc …) itself, such as the Land Registry where the property is registered (description housing, administrative regime, mortgages, etc …), and may request such information the buyer himself, the seller, a real estate agency, an administrative manager or Notary Public.
SIGNING THE CONTRACT
The signing of the purchase contract involves the formal submission of consent, and thus delivering on the one hand the building, and on the other payment of the price, which means that from that point we can no longer turn back, therefore we must give the greatest possible formality, depending on the time when we meet.
Usually the purchase of property shall be formalized in a public document, a public document authorized by the notary, which reflects the will of the parties and ensure that it complies with the law. The involvement of a notary give authenticity to the document content and serve as proof to third parties for its fulfilment, without any of the parties to deny statements in writing.
It is possible to formalize the sales contract in a private document between the buyer and seller without the intervention of a notary. In the case of the sale property that have not yet been developed (purchase off plan) is often used private contract to formalize the delivery of amounts on account of the price and the obligation to build and deliver. You know that whenever there is a private document, either party may require the other to proceed to turn it into a public document, which usually occurs once proceeds to satisfy the remaining payment upon delivery the property stated in the contract.
In the event that the purchase is financed by mortgage shall be mandatory notary intervention, since in this case it is legally required the inscription in the Land Registry, and it is a necessary requirement for the granting of the deed. Normally the signing of the deed will be done simultaneously with the purchase the property, since it is necessary to have the property registered in the name of the borrower to grant mortgage financing, and obviously the seller will accept not to register until he has received the cash consideration.
Whatever the form of conclusion of the contract, the seller is bound by the hidden defects of the property, even if he was unaware that they exist, the buyer can choose between withdrawing from the contract or reduce a proportionate amount of the price.
In this first part of the post we can conclude that when making an investment the first step will be the « Search of the Property », which will require a process of thorough selection that allows us to get those properties that best suits our requirements being the main aspects to consider: the physical characteristics of the property and the legal status of same, although in the case of buying off plan and due to the difficulty of assessing these aspects, we require additional information.
Once we have identified the properties on which we will make the investment the next step will be the « Signature of sale and purchase contract » with the involvement of a notary, which will give authenticity to the content of the document and will proof the realization of this. Under certain circumstances, especially before buying « off plan » and « earnest money contract, » you can make a private contract between the parties until the actual buying and selling, time when payment is done for the rest of the price against the delivery of the property, with the possibility for either party to raise it to the public at any time if deemed appropriate.