Spain is one of the most attractive countries for real estate purchases in Europe. But to become a property owner, significant financial resources are required. What to do if there is no opportunity to fully pay for the desired object? An installment plan for real estate in Spain is the optimal solution in such cases. An installment plan is an agreement that gives the right to pay for goods in several payments over a certain period of time. Usually, a contract for this service in Spain lasts from 6 months to 2–5 years, depending on the terms of the agreement between the seller and the buyer.
Content:
- Advantages of an installment plan for real estate in Spain
- Disadvantages of an installment plan for real estate in Spain
- Scheme of buying real estate in Spain: where to start?
- Let's summarize
Advantages of an installment plan for real estate in Spain
The installment payment condition is beneficial not only to the buyer but also to the seller.
- The installment plan allows the buyer not to lay out all the money for the purchase at once. This can be especially useful for those who do not have the opportunity or desire to take out a bank loan. The future owner also saves time and money on collecting a package of documents with subsequent translation by official persons.
- Partial payment is beneficial for the seller as he can attract more buyers who are unable to pay for the property all at once. Such a payment option has become especially relevant in recent years when the real estate market is characterized by progressive growth, and the purchasing power of interested parties remains at the same level. The conditions of the installment plan are such that the seller is fully protected by law and does not risk anything.
Disadvantages of an installment plan for real estate in Spain
Acquisition of property with the division of payment into several installments has downsides related to the risks of the buyer. For example, if you can't make the scheduled payments on time, penalties and additional payments can occur, increasing the overall cost of the purchase. Also, the "price of installment" is usually included in the cost of the acquired housing. Thus, you might find a similar apartment in a neighboring development projects in Spain without the possibility of dividing payments but 10–12% cheaper. There are also risks associated with the long-term nature of the transaction. Typically, partial payment is offered at the construction stage of the object. Several years may pass before it is handed over. In the conditions of a changing market, there is some probability of reducing the profitability of such an investment. In most cases, Spanish developers hand over projects exactly on time, but sometimes there are delays. In this situation, it is important to carefully study the contract before concluding a deal, find out the exact delivery times and financial compensations from the developer in case of delay.
Scheme of buying real estate in Spain: where to start?
The algorithm for buying housing in installments may differ depending on the seller and other factors. But in general, the process looks like this:
- Search for suitable property that can be purchased in installments. This could be either a new building developed off plan in Spain or secondary housing.
- Inspection of the living space to ensure it meets all stated requirements.
- Payment of a deposit ranging from $3,200 to $5,400.
- Opening a bank account and obtaining a NIE – foreigner's identification number.
- Reservation. To reserve a property, it is usually necessary to make a payment of approximately 10% of the total cost of the chosen apartment or villas in Spain. The payment is made within 15–20 days from the moment of obtaining the NIE.
- Signing the sales contract – a document that contains records of transactions of sale. Usually, it contains information about the seller and the buyer, as well as a description of the object for sale and the conditions of the transaction, including the cost and terms. From this moment, the owner independently pays all utility bills: water supply, electricity, and housing maintenance.
- Registration in the property register.
- Payment of contributions: after signing the contract, the buyer must start making payments in accordance with the terms of the contract. This can be a monthly or quarterly payment. In the absence of payments from the buyer within 3–4 months, the court can issue a decree to return the housing to the original owner, i.e., the seller.
- Completion of the transaction. The buyer has paid the full amount under the contract, he gets full ownership of the housing. At the same time, it is necessary to make sure that all documents are drawn up correctly and there will be no legal problems in the future.
It is important to note that the plan to buy a house or apartments in Spain may have some differences depending on the conditions of the deal and the seller's requirements. That is why before starting the process of buying housing in installments, it is necessary to study all the conditions of the deal carefully.
Let's summarize
A small down payment with the rest of the amount paid in several installments over half a year to 2–5 years can be a beneficial solution for those who do not want to pay the full cost of housing at once. This decision reduces the financial burden on the buyer and leaves him with free funds that he can invest otherwise to diversify his risks.
However, before deciding on a deal, it is necessary to carefully study its conditions to avoid unpleasant surprises in the future. It is important to ensure the reliability of the seller's reputation, check project and other documents on real estate and contract terms. Keep in mind that when buying property in installments, you can face additional expenses, for example, bank fees for paperwork, expenses for bank transfers, and other payments. It is also necessary to have a stable and sufficient income to repay monthly payments on time in the future. Nevertheless, with the right approach and considering all factors, purchasing housing with split payment can be profitable and convenient for everyone who dreams of their own housing in Spain.
If you are interested in buying a house or apartment in this beautiful country, contact our experts now by phone or in online chat. They will select the optimal real estate option for you and provide detailed consultation on all issues related to specific cities and residential complexes, as well as payment methods.