Are you thinking of selling your home on your own, and do not know what steps to follow, or the paperwork to perform? In this article we explain the process of the sale of a home between individuals.
Steps for the sale of a home between individuals:
Signature of the deposit contract:
For the sale of a house between individuals, the first step usually is the signing of the deposit contract. The deposit contract is an agreement between the seller and buyer that collects the will of both to sell and buy, respectively. This will is demonstrated by delivering an amount as payment on account or deposit.
Usually, those who are about to buy a house do not usually have the full price to acquire it in cash, for what you may need apply for a mortgage, thus delaying the moment of signing the purchase deed. In this case, the deposit serves as a signal to ensure that the sale of the home between individuals will continue if the loan is granted.
The earnest money can be of two types: penitential or confirmatory. In a penitential earnest money contract, either party can give up their intention to buy or sell, with the assumption of a penalty. If the seller is the one who gives up, the buyer must return the double of the amount received as a deposit. If it is the buyer who revokes his decision to buy, he will lose the earnest money delivered.
The confirmatory deposit constitutes an advance or payment on account of the property price. This type of deposit does not allow the agreement to be withdrawn and in the event that one of the parties do it, the other party, will have the right to demand for the accomplishment of the contract or a compensation for the damages suffered.
⭐ We solve the most frequent questions of our clients about the deposit contract in this link .
Signature before a notary
In the deposit contract, a date is usually stipulated for the signing before a notary of the sell-purchase deed.
That day, the purchase will be finalized. For this, all the parties involved must be present, namely: the buyer, the seller, the notary, and the person in charge of the bank that granted the mortgage for the purchase, if he case.
Likewise, for this event, a series of documents must be provided to the notary. Namely:
- Identity documents of the parties involved.
- Original deed of sale.
- Simple Informative Note, which can be obtained from the Property Registry, with the characteristics of the home, and which shows also if there are any pending charges.
- Certificate of Habitability . Document that certifies that the home meets the minimum conditions, required by law, to live in it.
- Energy Efficiency Certificate.
- Community Owners Certificate, indicating whether or not there are outstanding debts.
- Building Technical Inspection Certification (ITE), for homes over 45 years old, to ensure that the building is in perfect condition or, failing that, to point out the deficiencies in the property.
- Certificate of payment of IBI (Local Real Estate Tax).
Ultimately, the notary will be in charge of reviewing the veracity of the documents provided, as well as drafting the deed, which will be signed by all the parties involved.
In addition to the expenses that will have to be paid for the procedures and services involved in the sale of a home, the payment of a series of mandatory taxes must also be assumed.
For recently built new homes there is the Value Added Tax (VAT), which is 10%. For second hand houses, buyer must take charge of the Tax on Patrimonial Transmissions (ITP), which varies according to the autonomous communities.
On the other hand, the seller must also pay the Municipal Capital Gain Tax , also called the Tax on the Increase in Value of Urban Land (IIVTNU).
⭐ If you want more information about management fees and taxes when buying and selling a home, you can find it all in this guide .
Registration in the Property Registry
This step is not mandatory, but it is highly recommended since, only then, will the buyer be legitimately registered as a new owner, having total legal security before third parties.
In order to register, the payment of all taxes must be satisfied.
Subsequent steps in the sale of a home between individuals
Once the transfer of the house has been carried out, it is also advisable to manage a series of issues. For example, it is convenient to notify the Community of Owners of the building, to formalize the transfer of the account for the collection of community expenses, as well as the change of ownership of the electricity, gas and water supplies.
If you have come this far, we want to thank you for trusting VBB Abogados to find out about the sale of a home between individuals. And, the truth is that, we want to take the opportunity to make a recommendation.
Even if you want to sell the house on your own, if you do not have the skills or knowledge necessary to take the steps correctly and efficiently, it is best for you to contact a professional, an expert lawyer in real estate law, who helps you in the process and knows how to advise you on the steps to follow.
From our firm we can help you sell your house, or buy your new home. We will accompany you throughout the process, and we will advise you on everything you need. Please contact us to assist you with further.