3 tips to save on home acquisition costs, according to the Valuation Institute
To save thousands of euros in the purchase of a home, it is recommended: compare appraisal companies, sign a mortgage "without commissions" or take advantage of the real estate discount campaigns, especially on holidays such as Black Friday
After the entry into force of a Decree Law in November 2018 and the Regulatory Law of Real Estate Credit Contracts, in June 2019, several of the costs that were previously borne by the buyer - Documented Legal Act Tax, would notice, registration and management - have become the responsibility of the banking entity. In this way, there are three the number of expenses that the person who is interested in buying a home must face: appraisal, opening commission and taxes.
While it is true that the number of taxes payable has been reduced, the sum of their amounts continues to be a strong outlay for buyers, who wish to minimize spending. One of the most common ways to get real estate at the best possible price is to take advantage of the rebates, in the same way that would be done when buying any other asset ... and that is that in the brick world there are also discounts.
Thus, when purchasing a home, the buyer must bear the cost of the property as well as other expenses related to the acquisition. Valuation Institute explains how to minimize all these expenses:
Check the prices of the different appraisal entities, it can mean savings of up to 20%
One of the essential requirements to formalize a mortgage is the appraisal report. This document, prepared by a qualified technician, determines the real value of the property, considering factors such as the characteristics of the home and the market situation. For this document to be accepted by financial institutions, it is essential that it be issued by an appraiser approved by the Bank of Spain.
The rates of a mortgage appraisal are normally similar, however, they are not officially established, so each appraisal company can establish the amount and reductions it deems appropriate. It is advisable to check the prices of several companies before requesting pricing and visit their online spaces for discounts. The Valuation Institute appraiser, for example, offers a reduction of up to 20% in the online contracting of an official appraisal service.
Use online comparators to get the best mortgage loan
The opening commission on mortgage loans is one of those expenses whose application has been put on trial in recent times. At the beginning of 2019, the Supreme Court denied that it was abusive and admitted its validity, although, even so, many banks have decided not to charge it. Therefore, it is recommended that before signing the mortgage, an investigation is made to find out which banks charge the opening commission and which do not, since it can imply a percentage of up to 1.5% of the capital that is available for the acquisition.
A good way to know which mortgage loans do not involve commissions is to make a comparison study through the online comparators available. This step is highly recommended since, signing a mortgage without opening commission can save several thousand euros, depending on the total amount of the property.
In addition, the mortgages qualified “without commissions”, renounce not only the collection of the opening rate, but also the collection of some possible subsequent services such as early amortization, subrogation, novation or the change from variable to fixed.
Take advantage of special brick promotions, such as Black Friday this 29/11
Just as the times of sales are used to buy furniture or decoration for houses, in the real estate world there are also offers. Although the same trend of winter sales and summer sales is not followed, many real estate portals, agencies and even banks carry out discount campaigns in their offer of flats, garages, storage rooms, premises and even industrial warehouses at prices reduced for a specific period of time. This year, the Black Friday of the brick takes special relevance, and this is the 29th of November the annual day of the offers.
Many real estate agents have already begun to announce sales of 20%, 30% or 40% in real estate throughout Spain, so now more than ever, it's time to get good opportunities. The good thing is that in this market the offers are not limited to a single day, but generally extend for a month or a period of time around the key date.
Buy a second-hand house to reform it
Are you looking for a home to live in and would you like it to be recently built? Do not be dazzled by its shiny finishes and its new smell. Do some research and you will realize that, in spite of how wonderful it may seem, a priori, it also has its drawbacks and that, perhaps, the best option is to renovate an old house.
The first handicap of acquiring a new building is, of course, the price. Currently, the amount of these properties is registering an interannual increase of 10.4%, compared to 6.2% second-hand. That makes the price gap widen gradually.
Another disadvantage of weight is the location. If you have been exploring the market for some time, you will have observed that it is very difficult to find a new property in the area you want, especially if it is already settled districts. And, because of the scarcity of land, new developments are usually built on the outskirts or in "new born" urban developments. This is also accompanied by a lack of shops, transport and other services. Yes, the house may be very pretty, but it has nothing around.
Next to these, you also have the problem of waiting time if it is not yet finished. Regardless of the forecast period, you risk delays or defaults in construction. In fact, the Organization of Consumers and Users (OCU) is currently advising not to acquire on the plane - especially if they do not yet have a building permit - given the possibility of a new real estate crisis. Recommends that future buyers opt for a house that has already been built and can be inspected in person.
But don't be discouraged, you have an excellent option that you might not have seriously considered: renovating an old house. You probably think it's complicated or too laborious, but it has interesting advantages. The Casaktua team explains the most important:
Reform an old house in your favorite area
You can decide on already consolidated areas, where you will find what you need without the obligation to go by car. Since making the purchase in the
market and take the children to school, until they go to train to the sports center, choose a book in the library or take the subway to move to another part of the city. You will get everywhere just taking a walk.
Find the ideal home and negotiate its price
You will have a more complete offer - from a studio to a large detached house - and a much wider price range. In addition, the older the property is and the worse it is, the easier it will be to negotiate a rebate with the seller. In many cases they are homes that are already fully paid (there is no mortgage to pay off) or that are part of an inheritance, so that the heirs are willing to get rid of it. In both situations, sellers will be more willing to negotiate and what you get "scratched" you can invest in the work.
Superficial renovation vs. integral
A reform is expensive and annoying. That is the first thing that everyone thinks when talking about constructive renovations. However, not all are equal. It will depend on many factors: the real state of the property, the budget you have or your personal preferences.
A renovation can be superficial or integral. The superficial ones focus on giving a “face lift” to the houses and, if you are somewhat tricky, you can do them yourself, spending a few euros. These are "pirate" reforms, which offer visible results using minimal effort.
However, if the house is older than 30 years, it is absolutely advisable to undertake an integral work that updates critical equipment such as pipes or electrical installation and improves acoustic and climatic insulation.
Benefits of comprehensive reform
If you can afford it, one of the virtues of integral renovation is that - after the initial demolition - you will find a “blank canvas” to draw the home of your dreams. From redesigning the distribution to achieve an open concept, opening new points of light (windows, skylights ...) or leaving old structural elements in sight as a decorative resource (brick or stone walls, high beamed ceilings ...), to choose the bathroom tiles or kitchen furniture. All elections will pass by your criteria, to ensure that the final result satisfies you completely.
The cost is one of the conditions that most often discourage you to undertake a renewal. In general, it will depend on the dimensions, the materials used and the qualities selected, but it is estimated that, on average, it ranges between € 400 and € 600 per square meter.
And regarding the duration, the most common is that it takes about three months to complete the reform; Although both this and the budget, it is something that you will have to define with the contractor before starting the work.
Buy a new one or renovate an old house? Decant for a superficial work or an integral one? ... If you still have doubts about constructive renovations, continue reading .......
If you are also considering starting a reform, you will know that the two main initial doubts are: how long will it take? And how much money will it cost?
Well, according to the data of the Global Projects reform company, the Spaniards spend an average of 100 days in the integral reform of their house. The projects of integral reform of an average house have a duration of between 84 and 130 days, depending on the initial state of the house, its particularities and the requirements of the owner regarding materials, aesthetic factors and decoration.
Each phase of the work entails a specific time of realization - demolition (20-25 days), construction of new partitions (10-20 days), installations (20-25 days), false ceilings, plasters and tiling (20 -25 days), pavements (5-10 days), carpentry (10-20 days) and paint (10-15 days) - and are carried out by experts in different construction areas: electricians, masons, plumbers, carpenters ... According The difficulty and size of the project can involve between 16 and 40 professionals.
To the question about the cost of the reform, it will always depend on the qualities and materials chosen, but, from Habitissimo they affirm that, for example, a reform in a 70m2 apartment can cost about € 45,000 while, in a building of about 100m2, the price would rise to € 65,000
It seems a lot of money but do not forget that, apart from the obvious improvements that come with a reform, the market price of a renovated home increases between 15% and 25% and its chances of being acquired multiply.
How does the rental with purchase option work?
The difficulty in accessing credit and the current economic and employment situation mean that many people who planned to buy a property end up living on rent. And it is that for many of them the rent with option to buy is an increasingly common exit, since it allows to invest the money destined to the rent to a possible purchase. But what exactly is it and how does it work?
What is the rent with option to purchase?
The rental with the right to purchase is a double or mixed contract consisting of two subcontracts, one for rent and the other for sale. This modality allows the tenant to live leased in the house for a certain time. At the end of the term, you will have the right to buy it for an agreed price and from which the rental income paid so far will be deducted.
According to the Supreme Court, it is "a pre-contract - in principle unilateral -, under which, one party grants the other the exclusive power to decide on the conclusion or not of the main contract of sale, which must be carried out within a certain period of time and under certain conditions, and may also be accompanied by the payment of a premium by the opting party » .
It is, therefore, a type of contract that can be beneficial for both parties: for the lessee because he can live on rent while investing in a possible purchase; for the landlord because, while the tenant does not buy, he has his rental home with the premium as insurance.
These types of agreements do not have to mean a higher or lower rental fee than in a normal contract, but it does imply a higher initial disbursement by having to contribute a premium for the option to purchase, which is usually much greater than the amount provided in a bond. In addition, in the case of the premium and contrary to what happens with the bonds, if in the end the tenant does not decide on the purchase of the house, he would lose all of it.
For this reason, it is very important to ensure that, when the time comes, you will be able to pay the purchase price or qualify for a loan. Likewise, if it is clear that this is the most appropriate option, before making or signing the contract you must verify that the house is free of charge.
How should the rental contract with option to purchase be?
The rent with purchase option is an atypical contract, not contemplated by the Law and that is not expressly regulated in the Civil Code, although it is accepted and recognized in the Mortgage Regulations and the Urban Leases Law (LAU). For this reason, it is very important that all conditions are very well specified in the contract.
For this to be in force and according to the Supreme Court, it is mandatory that, at least, two essential conditions of the sale are stipulated therein: the object of the contract and the price. This means that the decision of acquire the property from the tenant after the marked years of rent and the stipulated sale price for the residence at the time of signing the contract, in addition to the amount of the rental fees and the percentage to be deducted from the lease rent in case of that the sale is made. If an initial premium is provided, which is usual, the agreed amount of it must also appear.
Since it is a double contract, it is convenient that it clearly reflects all the conditions related to the lease and purchase. In this sense, these are the data that should be included in both the rental agreement and the sale contract:
Term during which the tenant can be leased in the home
Term during which the tenant can exercise his right to the Purchase
Amount of the monthly rental income
Who is responsible for the expenses of the community or of a possible reform
Purchase and sale contract
The will of the lessor will sell the property to the lessee if he is interested in his purchase.
Sale price of the house.
Percentage (fixed or variable by years) of the rental fees made until the time of purchase to be deducted from the sale price.
Amount of the initial premium contributed by the lessee (if any) for the right to purchase, normally set based on a percentage of the agreed sale price
Rental conditions with option to purchase
At the time of making the contract, it is not essential to set an initial premium for the right to the option to purchase. However, it is advisable for the landlord, as it is a way to ensure that the tenant is interested in acquiring the home. It should be clear that the premium and the fees invested in the rent will be lost if, when the time comes, the tenant does not exercise the option to purchase.
The tenant has the right to remain leased in the house during the years that the rental contract lasts, whatever the term established to exercise the right to purchase, since this subcontract is regulated by the LAU.
The tenant can extend, if the owner so consents, the rental contract, but, in that case, the purchase option will expire because it is two different contracts.
The owner has the obligation to keep the contract and not assign, rent or sell the apartment to third parties for the duration East.
The tenant has exclusivity in the purchase of the home within the term established in the contract to exercise their right to the option.
The purchase of the home can take place long before the deadline. In fact, it is usual for the tenant to decide on the purchase before two years, which is beneficial for both parties: the tenant does not suffer much fluctuation in prices and the owner manages to get rid of the house.
The price of the sale cannot be modified by owner or by tenant. The rental price, however, can vary depending on the CPI if the owner demands it.
If the tenant is late in paying the rent more than two months he will lose the option to buy and, therefore, the premium paid.
The contract can be registered in the property registry to be enforceable to third parties, as long as both parties agree and meet the basic requirements (as specified the purchase price, the premium price and the term to exercise the option).
Being subject to the Onerosa Property Transfer Tax, these contracts may give rise to different tax situations:
If only the term and the price of the house is specified, during the lease, the tenant may deduct the rent and the landlord must declare the perceived by this. In addition, when the sale is made, the owner will have to declare that capital gain and, if applicable, the buyer deduct it.
If the tenant pays the owner the premium for the right of the option, the latter must declare that gain, although the former cannot deduct it.
Be that as it may, it is important to keep in mind that the price of the purchase option and the part of the rents that are deducted from the final price when the purchase option is exercised, can be deducted in the IRPF for the acquisition of habitual purchase.
Why hire a professional to sell your house?
When it comes to putting a property for sale, there are many who think they can do it on their own. The process seems simple: four photos, write an ad, choose the price they want and sit and wait for calls. The reality is usually very different, but still the price of a commission remains a mental obstacle when it comes to contacting a professional.
What are the main reasons why you should hire a real estate agent? Is it really worth it? Can professional help mean savings at the end? We have spoken with a couple of experts in the field and these are the advantages of having the help of a professional.
A real estate agency is not limited to publishing an ad, but "makes a marketing plan for each home and invests decidedly to highlight it through the most appropriate media, with the aim of finding the best buyer for that property," says Jesus Duke, vice president of Alfa Inmobiliaria. "The agencies have various marketing tools: their own websites, virtual visits, professional videos and a strong presence in real estate portals and specialized media."
They know how to do their job.
Real estate agents know their work and are up to date with everything that involves a real estate sales process, which goes far beyond the advertisement and visits. “The professional can help with tax issues, such as knowing if with the current regulations that sale will be exempt or not from the municipal capital gains tax,” explains Mayka Delgado, trainer and sales coach and collaborator of Academy by Fotocasa. “It is also important to be able to make the proper documentation at home step.
For example, when drafting a contract or signal contract that complies with all guarantees, both for the seller and the buyer, which clearly stipulates the consequences if either party backs down at some point. The consequences go even beyond the economic: if a contract has not been properly resolved and the house is put back on sale, a double sale crime may be committed. ”
Knowledge of All factors is a fundamental point. “A professional real estate agent is constantly trained and updated on the different aspects surrounding the sector and can advise with a high level of specialization in issues: legal, tax, marketing, how to present the home, can help you in the search for financing and even in all those subjects after the contract of earnest, such as notarial issues, the registration of housing, and all the legal procedures that must be carried out in its final phase, ”says Duque.
They know the market
Real estate professionals "know each area well, have databases with real sales prices and know how to differentiate perfectly between sale and sale prices," they say from Alfa Inmobiliaria. "In many cases, it is they who document in detail about why they put a market price and advise the owner not to lose a sale."
That is, real estate agents help to mark a realistic price according to the market situation, beyond what the seller thinks his property may be worth, what he paid at the time or for how much something similar was sold a few years ago. You have to know how the market is working here and now.
The real estate agencies not only expect direct response to the advertisements they have published, but also have buyer databases: very favorable information to find the perfect buyer. In addition, they can also get customers by crossing this data with those of other offices in the same network.
MLS (association of several real estate agencies at your service)
There are real estate partners under the Multiple Listing Service (MLS) system which increases the number of buyers because the client only has to deal with a single real estate agent but he is in charge of dealing with the rest of the associates and thus increase the possibilities for more people to get to know your property in the case of selling and expanding the number of homes that meet the requirements of a buyer. All this without increasing the fees for work done between all real estate to sell or compare a home.
They filter the curious visits
"The real estate agent prevents us from wasting time with visits from curious people or people who cannot afford the house we have for sale," says Delgado. The visits that arrive to the house have been previously filtered to guarantee that they are really interested in a property of these characteristics, and always accompanied by the professional. "We must be aware of the risks involved in letting complete strangers into our home," adds the trainer.
And concludes: "Sell your house without risk, hire a real estate agent and do not play it."
Go to News →