How to buy a property step by step: from search to completion at the notary

Step 1: Financial analysis and calculating your real budget

Before starting an active property search, it is essential to determine your actual purchasing power. This initial calculation prevents wasted time on properties beyond your financial reach or those that could compromise your family's financial stability. The overall budget comprises three fundamental elements:

• Required upfront savings: Banks in Spain generally lend up to 80% of the purchase price or appraisal value (whichever is lower). Consequently, the buyer must provide the remaining 20% from their own funds.
• Transaction fees and taxes: An additional 10% to 12% over the property price should be set aside to cover taxes and administrative costs (notary fees, Land Registry fees and administrative agency fees/gestoría).
• Monthly borrowing limit: The resulting mortgage payment should not exceed 30% to 35% of the household's net monthly income.

When structuring your loan, working with registered professionals acting as an Intermediario de Crédito Inmobiliario (code ICI D-286 with the Banco de España) facilitates the credit feasibility assessment and the negotiation of transparent conditions tailored to the buyer's financial profile.

Step 2: Defining criteria and strategic search

With the budget established, priority requirements must be defined versus secondary preferences. Factors such as location, floor area, internal layout, orientation, energy efficiency and proximity to amenities or public transport dictate both daily comfort and future property appreciation.

The search should not be limited solely to conventional real estate portals. Rigorous market analysis also involves tracking direct private sales, private portfolios and opportunities outside the public market (off-market properties).

Step 3: Technical, administrative and legal verification

Once a suitable property has been selected, conducting a meticulous review before handing over any deposit is crucial. Technical and documentary checks prevent subsequent surprises regarding special levies, encumbrances or planning irregularities.

Essential documentary checks

• Nota Simple from the Land Registry: Confirms who holds true legal title to the property and verifies the existence of encumbrances, such as active mortgages, liens, easements or tax liabilities.
• Community of owners certificate: A document issued by the building administrator confirming whether the seller is up to date with service charges and whether any pending special levies have been approved by the board.
• Local property tax receipt (IBI): Used to confirm up-to-date payment of this municipal tax and verify the property's cadastral value.
• Technical Building Inspection (ITE / IEE): In older buildings, checking the rating in the technical report is essential to rule out structural issues in common areas.
• Energy Performance Certificate: Mandatory for the seller, detailing the property's energy consumption and emissions.

Special considerations for Official Protection Housing (VPO) in the Comunidad de Madrid

When purchasing protected housing in the Comunidad de Madrid, the process requires additional checks subject to regional regulations. It is necessary to verify that the offered price does not exceed the maximum sales price established by the authority for the relevant module. Furthermore, if disqualification (descalificación) of the property is intended for subsequent resale on the open market, compliance with elapsed statutory protection periods must be verified and administrative authorization processed with the competent regional department of the Comunidad de Madrid.

Step 4: Offer negotiation and deposit contract (contrato de arras)

Once legal checks prove satisfactory, a formal offer is made. After agreeing on price and transaction terms, the parties sign the preliminary deposit contract (contrato de arras), securing the sale commitment.

The most common format is the penitential deposit contract (arras penitenciales), governed by Article 1454 of the Civil Code. Under this agreement, the buyer pays a percentage of the final price (often 10%) as a deposit. If the buyer subsequently withdraws from the purchase, they forfeit the deposit; if the seller defaults on the agreement, they must return double the deposit amount.

The deposit contract must comprehensively outline the details of the participating parties, the registry description of the property, the total agreed price, the deadline set for signing the public deed, and the legal allocation of notary and registry fees.

Step 5: Mortgage application and pre-notarial phase

Once the deposit contract is signed, the formal mortgage application begins. The Real Estate Credit Law establishes a procedure designed to ensure transparency in mortgage loans:

1. Official appraisal: The bank requests a property valuation from an accredited appraisal company to establish the property's collateral value.
2. Issuance of FEIN and FIA: The bank provides the European Standardised Information Sheet (FEIN), which acts as a binding offer, alongside the Standardised Warnings Sheet (FIA).
3. Mandatory pre-notarial act: The buyer must attend their chosen notary at least 10 days prior to the final signing date. The notary conducts a comprehension test, provides free, impartial advice regarding the contractual clauses and drafts the mandatory pre-notarial instrument.

Step 6: Signing the public deed at the notary

The culmination of the purchase takes place at the notary's office. The seller, buyer and representatives from the bank (if mortgage financing is involved) attend this meeting.

The notary verifies the identity of the parties, conducts a real-time online check of encumbrances at the Land Registry, and reads the public title deed of sale and mortgage in full. Following execution, payment instruments (via registered bank drafts) and physical possession of the keys are handed over.

Step 7: Post-completion procedures and tax settlement

Following completion at the notary, the transaction is not yet final; administrative tasks remain that must be completed within statutory deadlines:

Tax payment: A maximum period of 30 working days from the signing date is allowed to settle applicable taxes. For resale properties, Transfer Tax (ITP) is payable, with tax rates depending on the autonomous community where the property is located. For new-build properties, VAT (10% standard rate) is payable alongside Stamp Duty (AJD).

Land Registry registration: The title deed must be lodged with the Land Registry to formalise the change of ownership. Registration provides full legal protection against third parties.

Utilities and community fees: The purchase must be notified to the community of owners for ongoing fee billing, and utility contracts (water, electricity, gas and property services) must be transferred into the new owner's name.

Professional guidance throughout the buying process

Successfully navigating every step to buying a home demands dedication, analysis of complex legal documentation and sound negotiation skills. In the traditional real estate market, estate agencies typically represent the seller's interests, with the primary objective of securing the highest possible price for the property.

In contrast to this model, a Personal Shopper Inmobiliario (PSI) works exclusively for the buyer. At Sky Real Estate, we provide a comprehensive representation service spanning objective property searching through to completion at the notary. Our team combines financial expertise, backed by our registration as an Intermediario de Crédito Inmobiliario (ICI D-286 with the Banco de España), with the legal expertise of the Sky Law department, recognised in the European Legal Awards in the period 2023-2025.

Having an expert to analyse the property's technical and registry status, assess whether the price reflects market value, and negotiate the best terms in the deposit contract provides legal certainty at every turn. To discover in detail how to safeguard your investment and streamline the search for your next home, you can read more about the benefits of hiring our Personal Shopper Inmobiliario service.