Steps to take when buying a property in Menorca

Moving to, or buying a new home, is one of the most important moments in life. Without professional guidance the process can be confusing, lengthy, tiresome and stressful. Following stipulated guidelines, and with the help of a knowledgeable agent, the process should be an exciting and enjoyable one.

The transfer of a property is not difficult and must be done correctly. Having the necessary information is crucial to avoid feeling overwhelmed by what, at first, might seem like a large quantity of paperwork. Portal Menorca will guide and help you gather documentation and general paperwork and make sure you fully understand the process. This way your experience will be trouble free, comprehensive and as smooth and stressless as possible. Below we have compiled a useful guide to the purchase process and are sure this will enable you to follow and understand the step by step process of buying a property in Menorca.

Before starting the search for an ideal property, it is important and recommended that an honest assessment of what ones realistic maximum budget is. This will effectively narrow down the search and ensure you are only considering properties that are in line with your possibilities. If you are not a cash buyer, the first step should be to pay a visit to your bank and ascertain the loan or mortgage capital they would consider when investing in such a property.

Establishing your budget is essential in order to maintain a realistic focus during the purchase process as this will avoid upset and disappointments. Viewing properties above ones realistic and set price bracket often results in disenchantment and sadness when the possibility of being able to buy a superior property is not a reality. The professionals often share the opinion that one should look at properties and an initial expenditure when purchasing that is never superior to 35% of one’s net monthly income.

Once you have established what your budget is, you can begin searching for a house. Portal Menorca will be happy to help you find the right home or property for you. We are a team of experienced, professionals who are able to communicate easily in a variety of languages and who will take you through the decision process helping you establish which kind of property fits your needs always taking into account your ideas and wishes. We have six offices in Menorca (located in Mahón, San Luís, Es Mercadal and Ciutadella de Menorca) and more than 20 agents ready to help you the process of purchasing in Menorca and make your dream come true!

The first important question is What kind of property would you like? A detached house, a villa with uninterrupted sea views or maybe a harbour view from Cala Llonga, close to the beach, a country house, maybe even a farmhouse with land, a front line plot along the south coast, or an ever more popular option – an apartment or house in town just a few minutes’ walk from shops and restaurants. We recommend you dedicate some time in establishing what is the right property is for you and what are the main features the property must have before starting the search or viewings. One of the main things to have in mind is whether this property is for all year round living, a summer holiday home or maybe an investment property for rental. Also it is helpful to have clear how large the property is to be and how the distribution needs to be. The options are many and preferences vary. The variety on offer will be large and floor distributions will include classically divided living/dining rooms, open plan living spaces, one should be able to advise the agent of preferences like how many double bedrooms are needed, do you need a utility room, is a large garden and swimming pool and any other requisites important to you. When visiting the properties it is wise to pay attention to the distribution, analyze if it will work for you, check whether it is north, or south facing so that your preference for morning and evening sun is taken into consideration, what the ventilation is like in bathrooms, bedrooms and kitchen, check the state of the electric installations, ask about the neighbours, and the smooth running of an owners association if the property forms part of a complex and so making sure that the property for sale is not in arrears with community dues etc.,

Although it is important to know what main features are important to you, you should also know that the emotional side of buying a new home is also an important factor and a catalyst in the decision process. Often a house will not meet all the “must haves” but it has a good feel to it and you quickly feel at home. You will be happy to make small compromises as you realize it is the house you were looking for.

Once you have found the house that meets your needs, the negotiation process begins. The estate agency will mediate in order to reach an agreement between both parties, and will verify important details such as; check for any pending charges on the property and confirm rightful ownership, check the Land Registry details, calculate the extra costs (taxes, notary fees, etc). Once both parties have agreed to go ahead, a private contract of sale will be drafted either by the agent or an appointed lawyer, and signed by both vendor and purchaser.

In the event of needing a bank loan, after making the all-important choice of property, the bank or mortgage broker you have chosen will send a property surveyor to obtain an official appraisal and valuation of the property. We recommend clients do not to sign a private contract of purchase, which is a commitment to buying the property, or make any deposits or down payments before the bank has confirmed the loan is going to be forthcoming.
Portal Menorca’s lawyer will draft a private document where all details will be specified. Details such as: agreed sale price; payment conditions, completion date, fees and taxes corresponding to each party, energy efficiency certificate (compulsory by law), Land Registry details, etc. will be noted. The aim of this contract is, on one hand, to confirm the sale, and thereby remove the property from the open market, and on the other hand, safeguard both parties’ rights.

Upon signature of the private contract, the buyers will make a down payment of, in general, 10% of the sale price. If a bank loan is being negotiated to complete the operation, it is important that enough time is allowed for the bank to formally grant the loan when setting the completion date. We recommend a sensible period of not less than two 2 months should be allowed before signing the deeds before the Notary Public.

During this period of time (approximately two 2 months), there will have been time for all necessary documents to have been gathered in preparation for the signature before the Notary Public and the transfer of the title deed. Portal Menorca will organize the process in coordination with the bank and will set a time and date suitable for all parties. By signing the deeds, buyer and seller express their will to buy and sell, and the essential conditions & obligations are established.

The public notary will assess the legal capacity of all those signing the title deed. In this official document, the Title Deed (escritura) an accurate description of the property will be made together with an exact and official geographical position of the property and a record describing ownership of the properties sharing the boundaries. The deeds must establish the description of the property, any pending charges on the property, sale price, payment method, applicable taxes, breakdown and distribution of the costs. Once the deeds have been signed by both parties the transaction is complete and the handover of the keys may take place. This is the moment of celebration when the property has finally changed hands and the process of transfer is over.

It is worth mentioning that, when establishing a maximum budget, it is essential to take into account, and make provision for, the various fees and taxes that must be paid, which may sum up to 10% of the sale price.

• Legal fees; between 1% and 1,5%
• Stamp duty; 8%
• Notary and property registration fees; 1% approx.

To completely finalize the process, Portal Menorca will continue to act for the purchaser and will be happy to assist with the name changes of the services to the property i.e. electricity, gas, water etc.