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View Full Version : Any tips on buying a property in Tenerife?



tenerifeslaps
01-07-2012, 11:49
Can anyone explain in simple terms the stages of how to buy a property over here please?
We are looking at houses now and need to know at what stage should you officially apply for a mortgage and which solicitor is best to use. Also the approx cost involved in a porperty selling at 170,000 euros.
We have asked about borring money from our bank and in principle is ok.
How much tax do you pay? and does the bank arrange everything ie checks for debts etc...?
Once the sale has gone through, who changes the name of the elec and water??
Just need a bit of guidance from someone that has recently gone through the situation..
Many thanks

Rickiebear
01-07-2012, 12:08
Hi, we had a very good English estate agent who did all the transfers for us. The bank, (Solbank) were also very good arranged checks and payment of taxs etc. We allowed 20% in charges and tax. It all took 2 weeks from start to finish.

tenerifeslaps
01-07-2012, 12:25
hi, thanks for that... did you need the 20% ??? seems a lot to pay out !

CIM
01-07-2012, 13:05
20% is far too high. Max with a mortgage should be closer to 12%. I hope you got a lot back after the sale!
TenerifeSlaps - do you not have an estate agent who should be answering all of these questions? If you are going to be using a lawyer/gestor then they should also be able to go through all of this with you too.

tenerifeslaps
01-07-2012, 13:20
Thanks CIM... thought it was a bit high... yes we will be getting a lawyer soon, just making a few inquiries first... need to know the plan of attack!

Suej
01-07-2012, 13:23
Hi, we had a very good English estate agent who did all the transfers for us. The bank, (Solbank) were also very good arranged checks and payment of taxs etc. We allowed 20% in charges and tax. It all took 2 weeks from start to finish.

We also paid approx 20% on top but that was selling one property and buying another! no Agents involved in either case.:)

CIM
01-07-2012, 13:31
Well my advice would be to get your mortgage sorted before you do anything else. You need to know first and foremost what your budget is based on the deposit you have got. So either speak to a mortgage broker who knows the market or get an approval in principle from your bank (a real approval....)

Do not rely on your bank saying in principle its OK unless you have submitted an application which has been backed up by documentation and actually underwritten (underwriting will very likely no longer take place in Tenerife as most bank have centralised this process.)

Failing to secure a mortgage correctly could mean you end up paying a reservation and/or deposit of up to 17,000€ which you could then end up losing if you have not had the correct clauses inserted into the purchase agreement (subject to mortgage of X amount / subject to valuation of X amount etc.)

I came across this yet again 3 weeks ago - a salesman for a big well known, well spoken of agency pushing a potential non-resident buyer for a non-refundable deposit on a property for 115,000€ when they only had a 36,000€ deposit. No chance of them obtaining the required mortgage as their max budget with 36,000€ and a 70% mortgage is only around 86,000€. This is something that takes literally seconds to ascertain and calculate yet they were still being asked for a non-refundable deposit....

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We also paid approx 20% on top but that was selling one property and buying another! no Agents involved in either case.:)
No idea why you have paid so much either - nowhere near that amount by my reckoning unless you paid a lot of capital gains tax but if you were resident here and selling and then buying your main residence CGT would not have been applicable. Even cancelling one mortgage and taking another I cant see how it would have been more than 16% and it could have been as low as 12% all in for both transactions.

Suej
01-07-2012, 13:39
Well my advice would be to get your mortgage sorted before you do anything else. You need to know first and foremost what your budget is based on the deposit you have got. So either speak to a mortgage broker who knows the market or get an approval in principle from your bank (a real approval....)

Do not rely on your bank saying in principle its OK unless you have submitted an application which has been backed up by documentation and actually underwritten (underwriting will very likely no longer take place in Tenerife as most bank have centralised this process.)

Failing to secure a mortgage correctly could mean you end up paying a reservation and/or deposit of up to 17,000€ which you could then end up losing if you have not had the correct clauses inserted into the purchase agreement (subject to mortgage of X amount / subject to valuation of X amount etc.)

I came across this yet again 3 weeks ago - a salesman for a big well known, well spoken of agency pushing a potential non-resident buyer for a non-refundable deposit on a property for 115,000€ when they only had a 36,000€ deposit. No chance of them obtaining the required mortgage as their max budget with 36,000€ and a 70% mortgage is only around 86,000€. This is something that takes literally seconds to ascertain and calculate yet they were still being asked for a non-refundable deposit....

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No idea why you have paid so much either - nowhere near that amount by my reckoning unless you paid a lot of capital gains tax but if you were resident here and selling and then buying your main residence CGT would not have been applicable. Even cancelling one mortgage and taking another I cant see how it would have been more than 16% and it could have been as low as 12% all in for both transactions.

Ah! I wasn't a resident at the time CIM! both transactions were in 2005 and were completed together.

Rickiebear
01-07-2012, 15:14
Hi, I said we allowed 20%, I think the charges worked out at about 12% plus an interpreter and one or two other things. We received a discount from Solbank as the was an introduction through HSBC our bankers in the UK. They obtained a valuation and 'search' which we paid for. They also accompanied us to the Notary.