Step by step guide to purchasing property in Tenerife

It is a good idea to have a budget in mind before starting your research and you should also decide on how you wish to finance the purchase, cash sale, equity from home in UK or Spanish Mortgage as most Spanish banks will lend non-residents 65 to 70% of the property valuation.

There are numerous Estate Agents on Tenerife, many who have been in business a long time and have very good reputations. Check out their guest books to see what previous clients think of them. A good estate agent will have many varied testimonials and will be happy to supply you with references. Choose an agent you feel confident with, who responds to your initial enquiry with lots of helpful information & advice.

Then comes the fun part! Arrive in Tenerife and view the properties you and the agent have agreed upon.

Once you have settled on which property you want to purchase, you may wish to make an offer to the owner, which your agent will negotiate on your behalf. Assuming the owner accepts your offer or you re-negotiate the price, this is the time to sign a Sales Reservation Contract. These are fairly standard documents that state the terms and conditions of the purchase, including price, deposit required, and time frame for signing in the Notary etc. Usually a small deposit is asked for at this point, which will hold the property until the balance of the deposit is paid. This is normally 10% of the sales price, and generally 14 days are given for the buyer to come up with the funds.

At this point your agent will ask the current owner for paperwork relating to the property, so they can check ownership and that there are no debts levied against the property. The contract should state that if the buyer decides to pull out of the sale, the seller may keep the deposit paid and if the seller pulls out, then he has to return the deposit & usually pay the buyer compensation.

A good agent will then introduce you to a local bank and help with obtaining a non-resident account. They will also take you to the Police Station to obtain an NIE number, which is required by all non-residents for the payments of taxes here in Spain.

The next step is to arrange a date to complete the transaction at the Notary’s office, normally within 60 working days of signing the Sales Reservation Contract. The buyer should ensure that sufficient funds are lodged with their bankers here at least five days prior to signing in the Notary.

Your agent will ask the seller for receipts to show that all the utility bills, community fees and local rates are up to date.

On the big day, your agent will help you in the bank and then take you to the Notary’s office. Prior to signing the Title Deeds (Escritura) the Notary will have done a search (Nota Simple) to check the status of the property. Upon signing the Title Deeds the outstanding balance of the purchase becomes due.

After signing the costs then have to be paid. See What happens after signing?