Sun Family in Spain

So we recently bought a house and it was a long process.  We had been told that it could take a long time and it took us five months.  Getting a mortgage took the longest. We applied in December but with Christmas holidays and bank holidays we didn’t get an initial answer. This took over two months to get a straight answer and we had to resubmit a lot of documentation.  They also want work contracts which we don’t have very often in the US so that was tricky.  The mortgage company we worked with were not very good at communicating what was going on and what was needed.  The mortgage broker is owned by an English person and our initial contact was with someone who is a native English speaker but a very poor communicator. My biggest complaint wasn’t the language, it was they did a poor job of telling us all the steps involved.  Although it isn’t too different from the US it is different enough that we didn’t even have final figures until the day before we closed. I needed a spreadsheet with known figures as well as approximate figures so we would have known a ballpark figure of our immediate costs. We were given rough numbers by our lawyer but they were off by about 40k. The bank gave us the final numbers two days before we closed and the mortgage company didn’t tell us what was going on at all. Because we were putting 36% down on the apartment but this didn’t include the garage that apparently is paid for in cash not the mortgage and taxes we were told were between 10% and 7% plus notary, lawyer and community fees that we didn’t understand we had no real idea what our final costs would be. It was very stressful because a huge chunk of our savings went to this and we had no idea what would be left. 

We had gotten an initial prequalification from the mortgage company so we started looking for a house. We found one then we started the formal mortgage application.  In Spain you often, but not always, write a reservation contract with some initial provisions and earnest money.  This takes it off the market but it isn’t the final contract.  The earnest money is usually 1% of the purchase price but it is important to specifically state what you need to do to get the earnest money back if something doesn’t work out.  In the US and especially in Colorado these safeguards are written into a standard contract and it is very straightforward it also heavily favors the buyer.  Our reservation contract stated that we needed to get approved for a mortgage first. After that is complete then you work with a lawyer to complete a formal contract. This is scary because it requires 10% down and it is non-refundable. If the buyer pulls out then they lose 10% if the seller pulls out they lose 10% plus pay an additional 10% fee. The lawyer pulled the community paperwork and the city documents about the property to insure that there were no stipulations that we didn’t like and that the building was legally built and there were no problems with the building or the previous owners ownership. My parents bought a house in Spain in the early 2000 and they got scammed because the owners didn’t actually own the house they wrote fraudulent documents.  It took ten years of litigation to get any damages back. That was a rare case but I caused us to be very cautious.  Because we bought an apartment in a building and we got a mortgage we were at a much lower risk of fraud.  

After the second contract was signed and we paid the 10% directly to the seller, it didn’t go to an earnest account which was also very strange for us. Then we set up the time to close. The owner needed more time to remove the remainder of his things so this delayed our closing almost a month.  We had to go to the notary to sign documents related to our loan and that we understood the terms of the loan. Then we paid 10%. A month later we went back to the notary with the sellers, our lawyer, the real estate agents and the bank representatives and signed the closing documents and paid 34% down plus taxes, and fees to everyone.  Instead of paying taxes on your mortgage payment every month like you do in the US you pay most of them up front when you buy. The annual taxes on Spanish housing is pretty low. We also have a very low interest rate so our monthly expenses are reasonable. 

We didn’t understand why we had to go to the Notary twice and it wasn’t well communicated by the mortgage company or our lawyer.  I had to ask a few times to get clarification of what each step required.  We also didn’t know who or how we needed to pay everything until the day before closing. The bank finally sent us a document with the exact figures and we put that money into our bank account and they withdrew the funds.  The whole process was pretty messy. 

We are very happy with the house we bought. It is a one level apartment on the first floor of a building but the building sits above a commercial space so we are actually at about third floor level.  We have a huge terrace that has expansive views of La Concha, a big mountain that towers above Marbella and we can see the sea from our terrace although the view is a little obstructed by a building.   The apartment was very ugly with yellow walls, red ceilings, orange and slate walls, wood beams, orange oak cabinets, brown granite counters and a terracotta floor. He also had red curtains and furniture with heavy oak built in cabinets all over the apartment.  Initially we had planned to hire someone to do a renovation but we had some financial changes and had to shift to do what we can ourselves on a limited budget and we will have to wait to do the other changes. 

We spent the first few days removing built in cabinets. We still have two huge built-in closets that I am not sure if we will keep or not but for now they provide very good storage.  Then we tackled the walls and kitchen.  I removed all the kitchen cabinet doors. Sanded them and sanded all the cabinet boxes then I did a paint wash treatment on them. The kitchen is solid and all wood. New kitchens in Spain are often made with poor construction and plastic, laminate cupboards.  The kitchen in this house was ugly but very well constructed so we decided to paint it and live with the counters for now.  Now that it is painted I don’t notice the cathedral door panels as much and the fresh turquoise cabinets give a nice beachy feel to the house. The rest of the walls are being painted white because we only have windows on one side of the house and it is a little dark. Eventually we will replace the windows with a wall of windows to let in more light.