Rimontgó recommends the advice of a specialist, be it in legal or juridical aspects, fiscal or other matters related to the real estate sector. To this effect, our clients can contact us if they wish to request the details of professionals who can provide them with personal attention.
On this page you will find useful advice regarding the sale of any property (villa, house, flat, flat, estate, etc.). We discuss aspects such as buyer qualifications, advice, property valuations, etc., courtesy of Rimontgó, Spain’s leading real estate agency.
By working with Rimontgó, our clients receive advice on the most convenient way to approach the urbanistic, economic and legal aspects related to the sale of their home.
Rimontgó carries out a rigorous process of analysis of the economic solvency of potential buyers as well as strict compliance with the law on the prevention of money laundering.
Questions & Answers
The guarantee of payment, logically, is obtained when the seller has received in his bank account the totality of the money. If the sale takes place in a single act, with the signing of the Title Deed and the simultaneous delivery of a bank cheque, the guarantee can be considered to be satisfied. However, there may be other cases in which such security is only apparent.
At Rimontgó we have never had any contingencies with the means of payment after delivery. The buyers that Rimontgó admits have passed a previous internal control. The buyer must follow the structuring of the operation organised by Rimontgó which will lead to the signing of the Title Deed and the guaranteed payment of the price to the seller.
There are some checks to be carried out:
- The first is that the buyer complies with the Prevention of Money Laundering Act. (incluir link a resumen o texto de la ley); which basically means that the origin of your funds can be checked to ensure that they are of lawful origin. This is not a verification that must be carried out by the seller, but in our case, it is one of the tasks that Rimontgó carries out.
- If the buyer delivers a bank cheque, it is understood that the Bank has sufficient solvency to fulfil its payment obligation. If the cheque is personal, it must be endorsed by the Bank to ensure that the cheque has sufficient funds.
- If the buyer intends to make a transfer, we must ensure that it is an OMF order, made through the Bank of Spain. Transfers made by private individuals can be cancelled. We can only be sure that the transfer is irreversible if it is made with the mediation of the Bank of Spain.
A deferred payment is justified when it is necessary to attend to circumstances that may involve both the buyer and the seller. It should be borne in mind that we are talking about the moment of signing the deed of sale with or without handing over possession of the purchased property.
The circumstances, which lead the buyer to request the seller to pay part of the price at a time subsequent to the signing of the deed, can be as diverse as the persons involved, to mention a few examples we can cite:
- Lack of liquidity of the buyer at the time of signing the Title Deed. It may be that the buyer is expecting to receive money from another sale, for example.
- That the seller must fulfil certain obligations – for example, to complete some work or make some repairs to the sold property.
- The seller has transferred the property, but does not hand over possession for a period of time. The reasons may be various: the property is rented out; the owner needs to continue to live in it for a period of time; or it is impossible to hand over the property for any reason, be it for someone else’s or the seller’s own reasons.
- That certain expected events occur, which do not depend on either party. Or that such events do not occur, even if foreseeable.
In the above examples, you will have noticed that some of the causes originate in the contracting parties and others depend on third parties outside the transaction. Both circumstances must be dealt with on a case-by-case basis and the clauses of the deed must be adapted in the most appropriate way, with guarantees being granted to both parties in a certain and balanced manner.
A deferred payment has economic effects and may also have legal effects. The fulfilment of the obligations of each party, or the occurrence of events beyond the parties’ control, will bring the sale to a successful conclusion. Otherwise, however, it may happen that the contract is terminated, or that the contract, even if it has been concluded, does not take effect until a certain condition has been fulfilled.
Logically, it is preferable, for greater certainty as to what may happen, that there are no conditions to the transaction and that payment is made simultaneously with the transfer of full ownership, so that, once the deed has been signed at the Notary’s office, the parties only have to meet again to celebrate, with a dinner, the success of the transaction.
However, transactions are not always simple. Indeed, some transactions are so complicated that, were it not for the expertise and experience of the agent, they would never happen. There are transactions that may seem impossible to execute. A veces, hasta los mismos propietarios abandonan después de intentar vender algo que nadie les compra porque existen circunstancias que dificultan una operación simple.
Cuando en Rimontgó abordamos una de estas operaciones complejas, la diseñamos con un principio inmovible: que el negocio esté equilibrado y sea justo para todas las partes implicadas.
Es más fácil diseñar operaciones complicadas sobre la base de que las personas de buena voluntad actuarán, en la forma esperada. En cualquier caso, siempre se toman las medidas de precaución imprescindibles para asegurar que el negocio se materializa como estaba previsto; o que, en caso contrario, todas las partes tienen sus garantías de compensación aseguradas.
The way to ensure that each party is satisfied, even if the sale does not come to a successful conclusion, is to foresee all possible situations, their causes and consequences. If everything has been foreseen and everything has been previously agreed, there will be no surprises and the effects, although undesired, will be known beforehand.
In order to ensure a neutral result, it will be necessary to draft, negotiate and incorporate into the contract:
- Booking documents for a short period of time, with or without money. If money is handed over and not purchased, at Rimontgó, on the basis of contractual good faith, we suggest that money is always returned without penalty in the case of a reservation document.
- Contract of sale with delivery of deposit -whether confirmatory or penitential-, with delivery of money, on account of the price; with other specific conditions adapted to the object and the specific business.
- Call option contracts with delivery of a premium – or option price – on account, or otherwise, of the purchase price in the event that the call option is exercised on time.
- Contracts or deeds containing termination clauses, which allow the contract to be terminated with certain consequences for the person who proves to be in breach or for the person who unilaterally decides to terminate the contract.
- Contracts or Deeds in which suspensive clauses are included, whereby the effects agreed in the contract depend on something that is going to happen – even something concrete that does not happen – in a more or less distant future. Until that condition is fulfilled – in the sense in which it has been agreed, positive or negative – contracts are not effective and obligations are not enforceable. However, once the condition precedent has been fulfilled, its effects go back to the time when the contract was agreed.
In the latter case, let us imagine that a Deed of Sale is signed, with delivery of possession and full payment of the price, conditional upon the condition that none of the members of the purchasing family have died – for whatever reason – within one year. If, once the year has elapsed, the condition is fulfilled, i.e., no one in the family has died, the sale is final and definitive, the seller can take possession of the money received and the buyer can take possession of the property purchased. The effects of this sale and purchase are retroactive to the date on which the document was signed, with the tax consequences of payment of taxes and any other consequences that may have been agreed.
But, let us imagine that one of the family members dies of natural causes. The condition precedent would not have been fulfilled and the contract would not have taken effect. The buyer would have to return possession of the property and the seller would be obliged to return the money received.
Having gone to the rare extreme of signing such a contract, the seller would ensure that the house is kept in perfect condition during that year; moreover, the contract of sale not having taken effect, he would ensure that the would-be buyer pays a fair rent to the would-be seller. For his part, the buyer will ask the seller for sufficient guarantees of the return of the money paid.
The question of who is the beneficiary of the interest that may be generated by this money during one year is associated with the fact that the buyer enjoys the property during the same period of time. These concepts can be offset against each other in a way that is reasonable and agreed between the two parties.
Although this is a strange operation, it is one of the most curious operations that Rimontgó has carried out. The purchase price was 3.6 million euros and, happily, 10 years on, all members of the family are still alive and happy.
This way of ensuring that a transaction does not go through must always be balanced and fair to both parties, bearing in mind that we are dealing with honest people and that everyone is always acting in good faith. We have fond memories of the transaction: the seller behaved like a gentleman, redoing all the installations, painting the house, slashing the parquet and leaving the house as if it were new; and the buyer and his family, of Swiss nationality, with an exquisite education and a generosity as great as that of the seller. It is a pleasure to do complicated transactions like this.
A non-resident foreign individual or company, when selling a property in Spain, may naturally have a capital gain derived from the Non-Resident Income Tax. This gain is subject to taxation.
As it is natural for non-residents to have their capital in another country, and the tax authorities find it difficult to demand payment of this tax, the purchaser is obliged to withhold part of the purchase price, on account of the result of the tax settlement – for this supposed profit derived from the sale.
It is the buyer’s obligation to pay this withholding to the tax authorities. Nowadays, the amount of the withholding is 3% of the sale price, without taking into account the amount actually paid because there is third-party financing or subrogation in a loan with a pre-existing mortgage guarantee.
Once the corresponding declaration has been filed, the seller must, in each case, make the complementary payment, or receive the difference, for the excess withheld, by means of a bank transfer made by the Spanish Tax Administration.
The withholding of 3% of the sale price, on account of the Capital Gain derived from Non-Resident Income Tax, must be made by all purchasers, whether Spanish or foreign, resident or non-resident in Spain, provided that they are buying from a foreigner subject to Non-Resident Income Tax.
Well, no, it is not that simple. It should be remembered that the taxation required is derived from the capital gains of non-residents.
In some cases, it will be necessary to withhold this tax from a non-resident Spaniard, for the same reasons as those set out above.
In other cases, the foreigner may not be subject to non-resident income tax. This will happen when the foreigner -or the non-resident Spaniard- is subject to other taxes, such as personal income tax or corporate income tax. In these cases, the non-resident seller must provide a document issued by the Tax Administration certifying that the seller “is not subject to Non-Resident Income Tax”, in which case, it will be attached to the deed of sale, exempting the buyer from the obligation to withhold tax.
Tax precautions must always be taken.
Having already withheld 3% of the sale price, is there anything else to withhold? Yes: it is also the seller’s obligation, whether he is a tax resident in Spain or not, to pay the tax on the increase in value of urban land between the time of purchase and the time of sale.
The tax authorities, in order to ensure the payment of the taxes that may correspond to the vendor, oblige the purchaser to become a substitute taxpayer and to pay the amount of the liquidation of the aforementioned tax to the Spanish Treasury. Naturally, the buyer has the right to deduct this amount from the purchase price payable to the seller.
In the case of Non-Residents we must ensure that all payment obligations corresponding to the seller are satisfied before the seller leaves Spain. This is not to be wary in case the seller is not going to meet his tax or administrative obligations, as he can always pay his debts from abroad. But communication or payments from abroad can, of course, be delayed. An administration in Spain at the time of the sale facilitates this process.
For this reason, the buyer becomes the “tax collector”, even if only for a short period of time.
It is up to the owner to pay the Property Tax (IBI), or the administration and repair costs of the building – or urbanisation – where the property is located.
At Rimontgó we ask the Administrator of the Community of owners for a certificate of the approved and pending payments, both for current expenses as well as for approved repairs, even if they have not yet been paid.
We also ask the Town Hall for a certificate of the state of the Property Tax account for the current year and the four previous years.
The necessary adjustment in the liquidation is carried out by Rimontgó, taking into account these and other elements subject to liquidation or compensation between the parties.
To facilitate the sale of your home and make Rimontgó’s work easier, you can follow the following tips:
- The first impression made on a buyer when visiting your home is decisive.
- Invest a little in decoration for a quicker sale. With a little finishing work on walls, carpentry, etc., you can even get a better price.
- Allow light into the house. Open curtains and ventilate the house before a visit.
- Small details make a difference and mean a lot. Check, conceal and repair all apparent minor defects on handles, windows, hinges, doors and drawers.
- Make your home’s storage capacity stand out: tidy up and clear out as much as possible in fitted wardrobes, storage rooms, cellars, attics, etc.
- Show the house as open-plan as possible, clear it of furniture, furnishings and decorative items that may distort the existing space.
- The bathroom and kitchen are key: keep them clean and shiny.
- Avoid crowds of people during the viewing of your home, it may make a potential buyer uncomfortable.
- Silence is golden. When the agent is showing your home, turn down the volume or turn off radios and televisions.
- If you have a pet, try to ensure that it is not inside the property when you show it to a client.
- Stay in the background. The sales agent knows what clients are looking for, and can describe and highlight the best qualities of your home. Don’t follow them from behind. Be polite and friendly, but don’t try to force a conversation with clients. If there are questions or doubts, the sales agent will ask for the information.
- This is a home sale, not a furniture sale. Do not try to sell customers any furniture that they do not want to take with them.
- Let the professional do his or her job. Let the seller talk to the client about price, conditions, terms and other factors. If you decide to change the terms, tell the agent when the buyer is not present.
- Ask for an appointment in advance to show your home, that the Agent gives you advance notice of a visit, especially if you live in the property.
The price of your home is whatever a potential buyer is willing to pay for it. Determining its value is not an exact science. Your home is compared with previous sales and databases of similar properties, adjusted for differences in qualities and features, and the result is an estimated value.
The criteria to determine the value of your home are mainly:
- State of conservation of your property (to renovate, to update, to enter).
- Market prices of comparable homes for sale.
- Local market conditions.
- The price and conditions under which your house will be offered for sale.
Make sure that your house is in the best possible condition, both from the point of view of the property and the internal fittings and appearance.
Prices should be:
- Real enough to encourage the buyer to formalise a purchase intention.
- Setting a very high price can delay the sale. It is advisable to resort to Rimontgó to carry out a written valuation report or appraisal, in which an estimated value of the property is established, through a detailed study of comparable sales and the current property portfolio.
- Put yourself in the shoes of a potential buyer who is likely to compare your house with others for sale of similar characteristics, and make sure your price is competitive.
If you are thinking of selling your house there are two important factors to consider: how much you are willing to accept for your house and how soon you need to sell it. The price of your house will have a decisive influence on how quickly the sale goes through. Therefore, it is important to set a price for your house based on its real market value. Rimontgó will help you stipulate a fair price, both for you and for the buyer.
In principle, your Real Estate Advisor should present you with all counter-offers, regardless of the amount of the same, unless you have set a minimum price below which you cannot negotiate. Treat all counter-offers seriously and do not be offended by low counter-offers. It is always you, as the owner, who has the final say in accepting or rejecting a counteroffer.
When a potential buyer makes a counteroffer, they may include a condition; for example: they will buy your house when yours is sold, deferred purchase and sale, etc. If you have several counter-offers, do not just look at the price, but evaluate the conditions imposed to make sure which is the most advantageous.
Are you ready to buy or sell a house, and do you want to do both in succession? If you have decided to have an agent to advise you during this process, this section may be useful to assist you in the important task of choosing an agent to represent you.
- The first condition that the candidate agent must fulfil is that he/she is an expert in the area in which he/she intends to buy the property: he/she must be up to date with past and current transactions of all types of properties (flats, townhouses, villas, etc.) in a specific area (centre, suburbs, etc.) as well as being well informed of all the public and transport services (schools, banks, hospitals, gardens, etc.) existing or to be built in the future, in the area you are interested in.
- A competent agent knows the housing market in your area/city well. They know the market selling price for a property like yours. They know how much a property with the characteristics you are looking for is usually valued at.
- Another key to an expert agent’s ability to give you a good service is based on his or her communication skills. Good communication should be two-way. You must be sincere with the agent in relation to your needs with regard to the sale of your property: if the sale is urgent, or if you want to delay it over a period of time, or if you are willing to accept a counter-offer, etc. All this is very useful for the agent to try to adapt the price and conditions of sale to your real needs.
- Another key consideration when choosing an estate agent is their integrity. Do not choose an agent based solely on the price they claim to be able to obtain for your property, but on their ability to prove that claim and, in any case, value their ability to manage your property effectively.