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GUIDE TO SELLING
As a seller, we will help you to represent your property in the best possible light.
Firstly we advertise your property on the major search engines, as well as with the key
local and international newspapers. Next, we give your potential buyer a greater, more
detailed overview of your property than most real estate agents, in addition to offering
information on the location and the facilities available within close proximity.
This will make the second stage easier, leaving only those who are really interested in your
property to contact you DIRECTLY. Dealing directly with your potential buyer may take up a
little bit more of your time, arranging where and when to meet, etc., but ultimately, it will
enable you to get acquainted with your potential buyer, and not have to wait for the Estate Agent
to update you on the progress of an interested party. AND of course, saving both parties a lot of money!
The following information has been compiled in order to help you understand some of the most
important aspects to think about prior to putting your property on the market here in Mallorca.
It provides an overview of the key legal requirements, the necessary
documentation and information
your buyers will require, answers some of the questions you may have about the process
of selling your own home, and offers you a few helpful tips to help you prepare your home in order to give
your potential buyers the best possible impact.
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1. NIE numbers
First and foremost, if you are a non resident who purchased your property over 10 years ago
it is quite likely you do not possess an NIE number, a personal identification and tax number.
This will be necessary for you to sell your home and can take between 3 and 6 weeks to arrive
from application. You can either apply for an NIE yourself at Department of Estranjeros
(Foreigners Department-see Mallorca/Useful Information for details) ensuring you take your
passport, or through your chosen legal advisor (please click here for some suggestions of
very good, reputable legal advisors). Alternatively, for 75 Euros you can apply through a company
called Network tel. +34 971 403703 - you will need to take along your passport and we have
recently heard you may even require a official notorised copy of your passport. Please speak with Network or your legal advisor for up to date information ( click here for a list of legal advisors).
Don't worry, this will not affect your status at home.
2. Key Information required
Prior to placing your property on the market:
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Do you have a copy of your Escritura
de Compraventa (title deed)? If applicable, is your proposed
asking price considerably higher than the stated price on the Escritura?
You need to obtain an official copy of your Escritura and discuss
this with your legal advisor to ensure you are aware of the implications.
Do remember that buyers can be put off if the differential is substantially
less than your asking price. It will also enable your advisor to
check up on planning permissions, charges against the property and
any other special conditions which may affect the property.
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Do all of your extensions or renovations have the relevant
building permissions and certification? If you are unsure
or do not have them, speak with your legal representative and enquire
what it will take to gain the relevant permissions.
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What property taxes are currently being paid?
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Do you have an existing mortgage on the property?
If yes, you will need to find the original documentation and attach
it to the Escritura. If it is a competitive rate compared to the
rates currently being offered, or equivalent to, it may be beneficial
for both you and the buyer to pass on the mortgage since there should
be fewer charges involved for both parties. We recommend you speak
with your mortgage provider to enquire what their charges, and terms
and conditions are.
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Do you pay community charges on your property
and how much? You will require a copy of the last few payments to
verify this or even an official certificate from the community.
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Utility Bills - all utility bills will be required
in order to pass on the details to the buyers representatives, to
include Telefónica and Gesa.
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What will be included in the price? It is important
to stipulate what you would specifically like to be left behind in
your new home. Key items to think about are curtain rails, light
fittings, flooring, air-conditioning units, kitchen white goods such
as dishwasher, and anything else which is important to you. These
must be negotiated with your offer.
3. Putting your property on the market
Where to advertise your property and how to market it is an important
decision. You will first and foremost decide whether to market
the property yourself or whether to use an estate agency/real estate
agent, or even both.
Deciding to market it yourself is a big step, and will be slightly more time
consuming than using an agent, however, the biggest issue is how much you'll
save, for example, based on a €250.000 property that
can be a saving of as much as €17.400 ,
or on a property of €1.5 million as much as €104.400 (based
on 6% +IVA)! That's a lot of money! Just think what you can buy for your new
house, or even extra money to spend on yourself - that world-wide holiday you've
always longed for!
Needless to say, many agents do earn their money, as you will find out if
you choose to go down this route. We at mallorcapropertydirect.com have
done our utmost to ensure the property details your potential
clients view are thorough and extremely well detailed , more so than most agency's property descriptions and "exposes" - the most exciting thing to think about is that it can take just one visit from the right person, and hey presto, you have a buyer!
Additional information follows below, and in the next sections, with the aim
of assisting you throughout the entire process of selling your home; Please
click here for the following topics: Should I Sell My
Own Home , What
Is The Right Price , Selling Your Own Home - Helpful Tips and Frequently
Asked Questions.
4. The Option Contract
Once a buyer has been found, and an offer is accepted, an Option Contract
is signed. This is normally drawn up by the buyer's legal representative.
If you have an existing example, ask your legal representative to review
it, if not ask them to compile one for you. There is no set format ,
however it should detail the specifics of the agreement, the parties
involved (you and the owner), the agreed price and
the agreed date of completion. In addition it should
state that the property is to be sold free from charges, tenants, town
hall fines and forced sale orders, and where appropriate that the water
and gas are legally connected. Any personal items you have agreed to
include in the sale should also be detailed, or a separate signed list
should be attached. Ensure you get your legal advisor to check the Option Contract before you sign to ensure that all is in order (click here for a list of recommended legal advisors).
An Option Contract will normally be signed between 2 and 10 days of
the offer being accepted. The buyer will be expected to put down a deposit
of up to 10% of the agreed price at the time of signing or within an
agreed time period, again normally this is within a week of signing the
Option. They could legally insist that the deposit sits with your legal
representative with the instruction the funds are not to be released
until completion, or alternatively is placed into an escrow account (an
account that cannot be touched until certain conditions or circumstances
are met) at your bank, or their bank - this will need to be negotiated,
but something to bare in mind. It is important to note ,
that should either party renege or back out after this
contract is signed, they will lose either the
deposit if it is the buyer, or as much as twice the deposit
amount if the seller.
5. Completion
Completion can take place on whatever date you and the buyer agree,
the agreed date to be specified in the Option Contract. This can be from
as little as one week (as long as your mortgage providers agree) up to
as much as one year if desired, from the date of signing the Option Contract.
If your property was financed by a mortgage provider, their representative
will be present in order to authorise and deal with the mortgage as you
have requested (whether you are transferring it on to the buyer, paying
it off or deferring it to another property). If you aren't able to attend
on the specified date, you can grant your solicitor/lawyer power of attorney
in order for them to complete on your behalf.
Completion will take place between the relevant parties in front of
the Notary who will witness the signing and transfer
of the title deed or Escritura de Compraventa . The
Notary acts for neither party specifically, but is a government official
responsible for the execution of public documents; He will confirm the
identity of both parties, and will check the Land Registry to verify
legal ownership and that there are no out-standing debts or orders against
the property.
The balance of the purchase price will be paid at this time, together
with any remaining fees. The Escritura will then be registered by the
lawyer in the corresponding Property Register. Once the Escritura is
signed and the keys will be given to the new owners.
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If you choose to sell your property through an estate agent you will
have to ensure you calculate the fee correctly, and to include IVA on
top of the commission. A useful calculation and example is as follows:
6% commission +IVA
| Property price: |
€700.000 |
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| The calculation: |
700.000 x 93.04% |
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| Agents' commission: |
€48.720 (inclusive of IVA) |
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| 5% commission + IVA |
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| Property price: |
€700.000 |
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| The calculation: |
700.000 x 94.02% |
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| Agents' commission: |
€41.860 (inclusive of IVA) |
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Whether 5 or 6% - that's a lot of commission!!
But if you have chosen to sell the property yourself and
are successful you won't have to worry about deducting the Estate Agent's
commission from your agreed selling price. Please do remember to notify
us if you manage to sell it through mallorcapropertydirect.com we
would love to hear from you!
Other Costs
Under Spanish law the seller should pay part of the notary fee and what
is known as the "plusvalia municipal", unless agreed otherwise. In fact
here in the Balearics it doesn't work like this since it is understood
that the BUYER pays all charges. If however the plusvalia is a substantial
amount this can be a point of negotiation. A summary of the costs are
as follows:
-Legal fees - the Notary fees and property registry
fees are paid by the buyer.
-Plusvalia Municipal - a municipal tax paid each time
a property changes hands, usually paid by the purchaser. Complicated
to calculate, it directly relates to the length of ownership by the seller
and increase in value on the land, but is usually less than 1% of the
price. If the amount is considerable this may be a negotiable factor.
-Mortgage Fees - your mortgage lender will detail their
fees for redeeming or passing on your mortgage if you have one. There
will also be a Notary fee payable related to your mortgage of approximately €800.00.
Tax - all non residents are liable for Capital
Gains Tax at a rate
of 35% on the differential between the old declared price and the new declared sale
price, and 18% for residents.
This reduces based upon the number of years you have owned the
property, and will be fixed and published by the tax office every year. If the seller originally purchased BEFORE 1987 , no
capital gains tax is due. Between 1987 and 1994 a tax reduction of approximately
11.11% is allowed for each year the Seller has owned the property.
Retention
The Spanish Government ensures it collects this tax from non-residents
by placing a compulsory deduction of 5% of the purchase price, which
is the obligation of the buyer's legal representative to collect and
pay at the local tax office, within 30 days, after the completion of
the sale . Once the seller's liability has been reconciled it is possible
to apply for a rebate on this figure should it amount to less; this can
take up to 2 years should the tax office agree on the calculations. If
however this amount is more than the 5% deposit already paid, he must
pay the additional amount direct to the tax office.
Disclaimer - This information has been provided merely as a guide and not as a substitute for professional advice; we highly recommend you contact a mortgage provider or an independent legal advisor for more detailed information - click here for a list of recommended legal advisors.
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So you're considering selling your home yourself?
That's a big decision. We all want to save money ,
but what do you need to do to get the best results and how much effort
will it take?
We at mallorcapropertydirect.com have compiled some helpful
hints to help you sell your home, and have tried to demonstrate
that with a similar amount of effort you would have to give to selling
your home with an estate agent you could actually do it yourself:
Are You Priced to Sell?
1. Determine your home's market value - the highest price that you,
if you were a potential buyer would be ready, willing and able to pay.
Be realistic.
2. Remember that a home being sold by the owner often attracts
bargain hunters who may expect you to lower your price since they also
are looking to save on commissions. Be prepared. For further information
see What
is the right price ?
Advertise - Let Potential Buyers Know You're Ready to Sell
1. Research has shown that up to 50% of properties are sold with For
Sale Signs outside - we highly recommend using a For Sale sign. Click here to ask
about the mallorcapropertydirect.com sign board.
2. Place an advert
in your local newspapers,
3. The Internet is fast catching up with the success
of sign boards so make sure you place your advertisement with mallorcapropertydirect.com as
soon as possible.
4. Talk to people you know within your community,
at work, professional organisations or even church groups; spread the
word about your home.
Preparing Your Home to Sell (See Selling Your Home - Helpful Tips)
1. Make sure your home is clean and organised . Clear
your clutter , organize your cupboards and tidy up your garden,
balconies or terraces.
2. Keep your home in good repair , fix loose doorknobs,
stuck windows, warped cabinet doors and leaky taps
3. Create a friendly
atmosphere with fresh flowers ,
a drop of perfumed oil on a light bulb to add fragrance, lots of sunlight,
a fire in the fireplace in winter and open windows in summer.
Tips For Showing Your Home
1. Always make appointments with potential buyers before showing
your home,
2. Try to distinguish between the "buyers" and the just "lookers".
3.
Pre-qualify your potential buyers to ensure that they can afford to buy
your home - See Frequently Asked Questions - for
an outline of some key questions you can ask prior to a viewing.
Negotiation - Be Prepared
1. Try to resolve your buyer's doubts and keep interest. Don't
delay with your answers.
2. Once an offer is made, agree on the price and
terms, respond to objections and try to be open to your buyer's concerns.
Draw Up the Option Contract
1. Have your lawyer review or draw up your Option
Contract . Include a list of those items you want written into the
Option Contract, to include personal property which has been included in
the negotiations by the buyer to remain with the house (click here for a list of legal advisors).
2. Agree on a mutually
acceptable closing/completion date (this is normally between 3 and 4 weeks
of signing the Option Contract, but can be any date which is mutually acceptable).
3.REMEMBER: as the seller you are obliged by law to disclose any
major defects to the purchaser pertaining to the building or your
land, to include any major reforms which have no formal planning/building
permissions. If the buyer accepts any alterations made without the
required legal documentation, that is a matter between you, but do ensure
an agreement is made in writing. Otherwise you could be liable to
lose up to twice the amount of the buyers deposit!
Save!! NOT Cents but THOUSANDS!
Yes, you will be bound to save a little more time using an Estate Agent,
but just think of those extra thousands of Euros you will save - this could amount to a new car, or a brand new kitchen with all new high quality appliances
you've only ever dreamed about or a fantastic world holiday for over a month!!!!
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Be realistic
Essentially there is no exact "right price". No estate agent, friend or individual can give you the 100% right price for your property, but what you have to remember is that no other factor is greater in the sale of a property than price. Although set by you, the Seller, the value of your home is inevitably determined by the Buyer and what they are willing to pay. Don't allow over enthusiasm to warp your judgment and lead to overpricing - a mistake you can't afford to make.
Here are some key factors to consider to help you sell your home:
What affects your asking price ?
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Urgency - how quickly do you want to sell?
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Competition - how many other homes are available
in your price category and area?
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Available financing -is your current home loan competitive
and can it be passed on to a suitable buyer? (This can be very attractive
with fewer charges to be absorbed by both parties)
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Competitive Market Analysis - have you done your
research? Are you aware of other similar properties that have sold in the last 6 months?
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Expenses - what are your selling costs?
What doesn't affect your asking price?
- Original cost - this bares no relation to today's
market value.
- Investment - this can be purely based upon your
own personal tastes and may have no reflection on the perceived value
to the Buyer. In fact it may even devalue your property in the purchasers
mind.
- The cost to build your home today - a replacement
value is determined for insurance purposes only.
- What your friend's say - don't take much notice
as to what your friend's or neighbours tell you is a fair market value
for your home. Other homes in your neighbourhood may not be as similar
as you think, with the prices achieved including varying terms and numerous
different inclusions.
What Happens if you do overprice your home?
- You'll help sell your competition - most buyers
are competitive shoppers.
- Your home will take longer to sell - other properties,
more reasonably priced will tend to go first. If your property stays
on the market too long people will wonder whether there is something
wrong with it.
- You'll lose market interest and qualified buyers -
serious buyers will compare the value, quality and price of similar properties
as deciding factors.
- You may lose money - you will probably have to make
extra mortgage payments as well as incur more taxes, insurance and unplanned
maintenance costs.
- You may have to accept less money-quite often the
longer a house is on the market, the greater the discount requested,
off the list price! Often a seller will accept less than fair market
value in order to sell because of an approaching deadline.
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Thinking of selling your home? There are a number of things you can
do to improve the impact and feel of your home so sit
back and try looking through the eyes of the buyer. Many changes can
provide the prospective buyer with enhanced feelings about your home.
Feelings of more space, more light, more rooms, greater privacy, warmth
and security. Basic, simple and inexpensive
improvements can provide an improved emotional response in
a potential buyer.
An example could be something as small as a crack in the paint on a
wall. Simply by applying some plaster and touch up paint,
you may have eliminated what may be an unvoiced concern that your home has
been poorly maintained. Though the feeling may be unconscious, it's just
as important that the potential buyer feel an overall desire for your home.
If you are working with a small budget these simple
techniques will work absolute wonders:
Inside:
1. Open the windows and let the sunshine in ;
windows and shutters should be clean - you won't believe the difference!
2. Turn on all lights - day or night. Clean all light
bulbs, light fixtures and chandeliers. The higher the wattage the brighter
your home will look.
3. Clear the clutter - each room
will visually enlarge. Remove unnecessary furniture, personal knick-knacks,
and children's toys to improve traffic flow and create a feeling of spaciousness.
Anyone really interested in your property will probably be looking in
cupboards and wardrobes - organise them and remove unnecessary items.
Rent a storage area if needed, or pack it in the garage or trastero.
You're planning on moving anyway - start now!
4. Keep your home dusted and vacuumed.
5. Light up your
fireplace during the winter.
6. Remove all odours - both
smoke and pet odours can be offensive; Open the windows for a little
fresh air and lightly spray a little room air freshener so that it has
a chance to diffuse before the potential buyer arrives.
7. Make sure that
beds are made and clothes are put away.
8. Bathrooms - It's
a fact, Bathrooms do help to sell homes. Check and repair caulking in
baths and shower. Repair or replace broken tiles on walls, floors or
in showers/tubs. Fix dripping taps. Keep them kept clean and clutter
free, toilet lids down, no hair in the sink. Do not leave dirty towels
out; wipe down the shower areas after each use. Put out fresh towels
and decorative soap for showings and spray a light fragrance prior to
viewing.
9. Keep the kitchen clean and tidy. Remove all grease
from oven hoods, ovens, hobs and walls, etc. Remove any clutter and
unnecessary appliances - everything except those items used on a daily
basis.
10. Vacuum carpets and rugs, spot clean where necessary.
11. First impressions : does the doorbell work?. Make
sure the front door opens easily and is clean. If necessary, paint all
entrance doors. Clean and shine all accessories - door knobs, knockers,
lamps, address numbers, etc.
12. Create the feeling of a spacious entry
area by using decorating accents, mirrors, rugs, etc. and clear the clutter.
13.
Remove any excess extension cords and exposed wires.
14. An investment
in painting your home can make a big difference-paint inside walls with
a neutral coloured paint. This will brighten the home and make it look
bigger and cleaner. Fill any holes resulting from nails or other mishaps.
Outside:
Keep the garden and driveway neat and tidy -
remove any dying plants. Trees, shrubs and bushes should be pruned and
trimmed. Use plants and flowers on terraces and the front entranceway.
Hoses and garden equipment should be kept neatly out of sight. Remove
all toys, bicycles, tools, unattractive terrace furniture, rubbish, etc.
from the garden. Outdoor furniture should be kept clean.
Steps, terraces, balconies, patios and other extensions of the house
should be kept uncluttered , swept and in good condition.
Keep dustbins deodorized, covered and out of sight.
Highlight your pool area, water garden, etc. with lighting, benches,
planters, flowering plants, etc.
For any additional unanswered questions you may have, please click on FAQs (Frequently Asked Questions)
For Testimonials from our Members and visitors please click here
Back to Guides
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