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Tips on Buying property in Mallorca
When you’re buying residential property in Mallorca, it’s vital to know you’re going about things in the right way.
Following our step by step guide will help you make sure there are no nasty surprises on the way to securing your dream home. Please remember that this is no substitute for professional or legal advice from a qualified expert.
We would be happy to introduce you to the right people, including an English speaking lawyer we’ve worked with for many years, or to work with a professional you choose. Don´t forget to factor in approximately 10% additional costs on top the of the property price, this cost cover local taxation, notary fees, registration fees and in certain circumstances legal costs as well.
Step 1 – property viewing and negotiation
You’ll view properties in your chosen location and, once you’ve seen the property you want, Imperial Properties will negotiate your offer.
Be prepared to proceed with the transaction more rapidly than in other countries, mainly because there is no local authority search in Mallorca. Your lawyer conducts all the searches.
Step 2 – Lawyers searches and roles
It´s true that here in Mallorca you do not legally need to use a lawyer to buy or sell a property, however we recommend that the costs of the lawyer are money very well spent, your lawyer will check and approve the contract of sale or prepare a new one. He or she will then:
Check the property belongs to the seller
Make sure the property is completely free from debt
Check the property has the correct building permissions
Give you an estimate at this time of the taxes you can expect to pay on the purchase
Acquire and confirm the stated price on the deeds.
Step 3 – Signing
Once your lawyer is completely satisfied, the option contract stating your intention to purchase will be signed and 10% of the purchase price will be released from your funds.
You and the seller are now committed to the purchase.
Step 4 – Completion
A Notary formally completes all residential property sales. Your lawyer will set a Notary date which must be attended by at least:
The purchaser (you can give Power of Attorney if you need to and most people select their lawyer), the seller and the Notary, the public official whose duty it is to see the final legal transaction is carried out.
Step 5 – The notary and the public record
The Notary puts on public record that the title deed recording the sale/purchase has been signed in their presence and understood by both parties.
Step 6 – The deeds
You will be given a copy of the title deeds, the original will be presented to the appropriate land registry by your lawyer and registration will be completed.
Financing your property
If you require a mortgage for a purchase in Mallorca, and you’re a non-resident you’re normally allowed to borrow 60% – 70% of the purchase price or valuation, whichever is greater.
A resident of Mallorca can borrow up to 80%.
We have a very good relationship with an English speaking mortgage broker who can offer many deals that otherwise the banks would not provide. Send us an email and we would be delighted to introduce you.
At the moment (2017) rates are very low and there are some great deals available, it is not uncommon to see rates around 2% being fixed for as long as 25 years, these of course vary regularly so we suggest that you take advice before popping into see your bank manager, it could save a fortune over the life of the loan.