Mallorca Property prices have not dropped as expected by many potential buyers given the current market conditions.  The worldwide economic crisis has definitelely slowed sales as would have been expected but the subsequent price drop across the board has not.

Yes, asking prices are less than they were 3 years ago but they have not decreased by nearly as much as would be expected or has been seen in other regions of Spain.  Many property owners are not in a position where they “need to sell” which is what would ulitimately cause an overall price deflation however, that is not to say that prices are not negotiable.  In fact property prices are very much negotiable and the decrease at bidding is often where a significant price decrease will be seen, although this is not true of all owners.

So, if you are thinking of buying property in Mallorca you should do so with all the information available.  Choosing the right estate agent for one, they will help you to understand the individual situation of every property and property owner and therefore to negotiate the best possible price.

In terms of the procedures of buying real estate in Mallorca, they have not changed although the costs have decreased somewhat for certain properties they have remained unchanged for resale properties.  In general terms, upon reaching an agreement to buy it is important to to reserve the property so that any necessary checks can be done.  Normally this is done by lodging a 1% reservation fee with the estate agent handling the sale.

Once this is done, it is important to use a lawyer in Mallorca to do the necessary conveyancing of the property.  This includes checking the property for ownership, and debts or liens and embargoes, outstanding mortgages and the general legal status of the property and its grounds.  This is extremely important as the laws in Spain are “caveat emptor” meaning Let the Buyer Beware:

[Latin, Let the buyer beware.] A warning that notifies a buyer that the goods he or she is buying are “as is,” or subject to all defects. definition courtesy of TheFreeDictionary

Once the conveyancing of the property has been completed, the next stage is to sign an “opción de compra” which, translate literaly is an “option to purchase”.  The option must include ALL the items that have been agreed as part of the sale such as price, dates, furniture, mortgage cancellation and any other factor that is pertinent to the purchase and subsequent occupancy of the property.

The Option is normally for 10% of the agreed purchase price and this is not refundable in case the terms of the agreement are not met.  For example, do not sign an Option if you are awaiting mortgage approval, if your mortgage is not approved, you will loose the Option price.  Inversely, if the seller does not meet the terms of the Option, they must refund the 10% and pay a further 10% in damages.

Please follow this link to find out more about the costs of buying property in Mallorca.

Please contact cskMallorca if you require any further information.