In this episode of the Help with my visa! Podcast we talk to travel and real estate expert Linda Richards, who tells us the 5 things you must know when selling property in the UK and Spain.
After two distinguished careers in travel and real estate, UK-based Linda retired and moved to her holiday home in Spain with her husband, which became their new place of residence. The plan was to spend a few years relaxing in the Spanish sun before selling up and returning to the UK to build a new home that would see them through their golden years.
And before you ask… Brexit has absolutely nothing to do with the decision to move back to the UK!
Top tip 1: Appointing agent(s)
The first major difference between selling property in the UK and selling property in Spain is the number of agents you appoint to help sell it.
The UK uses a Sole Seller Agreement where you appoint a single agent to market and manage the sale of your property.
Meanwhile in Spain, it’s normal to appoint two, three or more agents to advertise your property for sale. So the first thing you need to know when selling properties overseas is how many agents you should appoint to help with the sale.
And where you appoint multiple agents, you should look at their individual specialisms. Some will specialise in selling to locals, whereas others will specialise in selling to foreigners from certain countries.
As Linda was selling a property in a popular holiday resort, she appointed agents who specialise in selling to people from countries who typically holiday in that area, so agents who deal with buyers from Germany, Sweden, Belgium and of course, the UK. This increased the marketing reach of her property among the kind of potential buyers who would be interested in a holiday-style home.
Top tip 2: Price setting
Price setting when selling property in the UK and Spain also differs significantly, and is Linda’s second top tip.
You need to know the typical agent commission fees as this can significantly affect what price you need to get for your property. Linda found agent fees in Spain could be 10x the typical fees in the UK, so having to factor this into the sale price was crucial to avoid being left out of pocket.
That’s why agents in Spain will usually ask you “what price do you want to walk away with?” and then gross up the selling price by adding on the fees.
In the UK on the other hand, the agent will assess the value of your property and propose a sale price, which you can then take onboard or decide to change.
Top tip 3: Understand the legal process
The third top tip from Linda is about understanding the legal process and what registrations you need to go through when selling property.
Linda eventually sold her Spanish property to buyers from Belgium. When foreigners buy property in Spain, they need to get an official registration certificate from the Spanish authorities, known as an NIE certificate.
The government gives you an appointment – which can take 6-12 weeks to come through – and you must attend, or lose your place and apply again (with another 2-3 month wait).
And even though the buyers will have paid a deposit of up to 5% by this point, solicitors won’t start work on processing the property sale until the buyer has an NIE certificate in place.
So knowing there’s a potential 2-3 month delay in progressing the sale of your property to new foreign buyers is essential, particularly if you need the sale fees to fund another investment.
Top tip 4: Do exactly what the notaries say!
Then in Spain the notaries get involved, who absolutely dictate the rest of the sale process.
Linda’s fourth top tip is to make sure you do exactly what you’re asked when the notaries get involved.
When your notary gives you an appointment, you make sure everyone you need gets there on time!
Ultimately, Linda gave her solicitor power of attorney to sign over the property on her behalf, and it’s something she strongly recommends so that you have no hiccups getting the solicitors and any translators needed to the notary’s office when needed.
This process differs from the UK in that it’s the solicitor who guides you as a seller, and you provide them with information and signatures when asked. The process is a lot less formal.
Top tip 5: Have a currency exchange plan in place
And finally, Linda’s fifth top tip is to have a plan in place to exchange currency if the property sale takes place in a different currency to the one you need to hold.
Selling a house in Spain and moving back to the UK meant that Linda would receive her property sale proceeds in euros, but would need to exchange them for British pounds sterling to go towards building her new home in the UK.
She used a currency exchange professional recommended by her solicitor, who between them put in place a plan that got Linda exactly what she needed and it worked seamlessly.
So do make sure you check out the full interview on our podcast channels, and don’t forget to like and subscribe so that you’re notified when the next episode is published.
And if you’d like any advice on managing large currency exchanges from overseas property sales our partner Smart Currency Exchange will be happy to give you a free quotation.
You can also watch our podcast episode with Paul Harris from Smart Currency Exchange, who gives us his 5 top tips on getting the most out of making a large currency exchange transaction.