Speaking specifically about Spain in the following examples, these are real events that have occurred to myself, colleagues and family. I have drawn on this experience to hopefully inform a little more about possible surprises.

On the day of a signature, everybody is usually very happy. The new owners are about to begin a new life in their dream home, the seller has managed to get the asking price or thereabouts of their property, the bank has earned a new customer and the notary and any other representative will take their slice of the action, too. However, if you’re a first time buyer, or a newbie in a foreign land, this is where you can often come off a little red-faced.

Banks are like any other business – they’re in it to make money, no matter what. Bank managers have sets of objectives or goals that they have to reach in order to keep their quota, and raises and bonuses also often depend on these “extras”. So it’s very common when arranging a mortgage for a bank manager to slip in a few clauses to the mortgage you’re about to sign, which often only surface on the day of signing over – leaving you no time to argue and to simply have to agree upon the conditions. This is extremely common in Spain, so it pays to try and find out as much as you can about the conditions that a bank will be offering you, rather than jump at that which gives you the best starters rate, for example.

As a minimum, most banks will insist on home insurance through the bank on the property you have just acquired. This is a legal requirement so it makes sense for the bank to be first in the hypothetical door. Many banks will take this a step further, insisting that you take out life insurance for one, both or however many parties who sign the contract. Another typical condition is that you need to bring your wage from your job to that account, and more often than not, open a credit card account with the bank – both of which have an annual charge. Some banks will then also go as far to open fixed rate credit plans or deposits of short or medium term amounts – often round figures like one thousand euros, for example – again, all of which is unexpected to the happy home-seeker. Add to this the usual ten percent notary fees, and you can sometimes come away with no cash left for the decorating plans you had, so it pays wise to ask as many questions as possible ahead of the day of signing! 

David Brydon has been living in Barcelona, Spain for 10 years and writes for Luxury Barcelona Real Estate Agents Modus Vivendi, who have a wide portfolio of Long Term Rentals in Barcelona too.

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