Costs and charges for selling property?

Hi

We paid 250,000 euro for a property, and have recently sold it for 210,000 euro.

What should the costs be to us  (not inc agents fees) ??

Many thanks for any info!

You question is not clear?

are you just referring to the costs of the sale or also costs of purchase?

if purchase also please clarify if there was a mortgage.

Sorry....!!

We bought approx 5 yrs ago.

We sold in May this year. The solicitor  hasnt given us the full amount as they are still working on our costs and charges.

What would be included in these costs for selling the property?

I have to admit we know nothing about the system for selling, as we paid an agent to handle the sale for us.

We now feel that we should look a little closer  ...as it turns out that the apartment was sold to a family member of the solicitor.

It's all cloak and dagger out here!

This matter should have beed put to bed by now with the exception of the capital gains tax refund.

Solicitors conveyancing fee should be EUR1,500 to EUR2,000 including VAT - sale is easy! At an absolute max they should not charge more than the standard 1% + VAT.

As the seller you will also have to pay plusvalia tax which is a municipal tax payable within 30 days of sale to the Town Hall. It has to do with the increase in value of the underlying land and would probably be about EUR1,000

There may also be some petty charges such as notal simple EUR10.46, fee to community for certificate EUR20 and some small bank charges etc

There may also have been some apportionment of expenses such as community & IBI/basura - depending on what had been paid at date of completion etc

As you are non resident the proceeds of sale would be subject to a 3% capital gains tax retention and your lawyer will need to prepare a capital gains tax return and seek a refund. If you are not up to date on your non-resident income tax returns then these will need to be submitted to secure the refund.

In my opinion the conveyancing fee should include the preparation and submission of the capital gains tax return but many lawyers charge in addition for this service and sadly fleece the client and more so if there are outstanding income tax returns.

Anyone buying or selling should shop around and always check what is included and what if any additional fees might be charged.

"We now feel that we should look a little closer" 

I hate to say this, but it's a bit late, isn't it? Expect the worst, because if you didn't check beforehand, you're likely to get fleeced. I'm guessing your lawyer has retained a chunk of the sale proceeds on account? I would hazard a guess that your so called costs will miraculously equal the amount retained, after the Plus Valia has been paid (which by the way is impossible to guess because it depends entirely on the property and where it is and may be much less than suggested, but the exact figure could easily have been obtained prior to the sale simply by enquiring at the local town hall)

Faro has pretty much summed up the few costs involved in selling, although you didn't actually state you are non-resident - if not, there should not be the 3% retention, but you would have had to provide a certificate of fiscal residency from Hacienda. That's free, but if you left everything to your lawyer to organise, naturally they will charge for getting all the required documentation in order. The only bit of Faro's post I don't quite agree with (although it's just my personal opinion I suppose) is "Solicitors conveyancing fee should be......" Faro follows this by saying "sale is easy!" Well, quite, and since you say you paid an agent to handle the sale for you, strictly speaking the agent should therefore have handled all this for you. After the sale, perhaps you may need a representative to pay the Plus Valia and arrange a refund of the 3% retention if applicable, but that would hardly be described as conveyancing (which I thought only applied to the buyer), and I'd be pretty miffed if a lawyer charged me 1500 - 2000 euros for that alone.

I apologise if my comments seem a bit negative, I'm just trying to be honest / realistic. Hope it works out OK for you.

Roberto

The fee I quoted is all inclusive and should include all pre-completion matters such as drafting private contract, attendance at notary and all post completion matters such as paying plus valia and preparation and submission of CGT return and chasing tax office for refund etc.

If property is in the province of Malaga then for some Town Halls it's possible to check online the amount of plusvalia due.

https://www.prpmalaga.es/web/plusval/formplus.php

But please do let us know how you get on.

I would suggest you send an email asking for a final completion statement.

I appreciate that Faro, but a private contract should have been drawn up by the estate agent, or by the buyer's lawyer. Attendance at notary I can understand if the lawyer has POA to sign in your absense or if you need a translator / hand-holder, but this should only be a couple of hours with nothing much for the lawyer to actually do - what's the going hourly rate these days?

Paying Plus Valia if absent or unable to go to the town hall yourself for some reason, and dealing with CGT I accept - but a couple of grand? Ouch!

I know you can wipe out August, but even so, it's been four months since the sale. Time to push for a conclusion to the matter. Best of luck!

I don't think you will get a Spanish lawyer to represent you on sale and so an all in job for much less that EUR1,500

Part of the problem is the inefficiencies in the system and that so much needs to be done on foot whereas in UK all can be done desk based.

You are probably right. I have sold several properties, and never used a lawyer, so I really wouldn't know, but perhaps if you need representation, a gestor will do the job for considerably less?

You're right absolutely no need for a lawyer on sale and you could easily engage a gestoria for plusvalia or cgt work.

Also if vendor has no lawyer then buyer's lawyer  has to do more work and maybe retain funds to pay plusvalia etc. which also happens quite a bit.

But problem is most extranjero's don't know the steps and in any event they would need a translator to appear before the notary.

The other problem is completion day is rather casual and depends on the weather which is one of the reasons you could not have a chain like in the UK which relies heavily on solicitors undertakings and we all know the word of a Spanish lawyer would seem to have little meaning - that was discussed at a recent event in malaga organised jointly by the colegio de abogados de malaga and the law society of england and wales.

 Even when it can sound on my benefit, the sale process has its own work:

deposit or option to purchase?,

what if the buyer fails tro buy finally? what do I do with the deposit?

Prevention against future actions by the buyer ( hidden defects)

Payment and certification of related expenses being paid by seller prior to sale

Cancellation of existing mortgage,

Claims if utilities bills keep coming to your address

Payment of plusvalia and income tax.

It is not a so simple matter in many occassions

 Thank you all for your helpful replies!

I'm sorry that I havnt posted thanks before....I thought I had!!

It was kind of you to reply.....and have been a great help.

We are still waiting to get things finalized with the solisitor..... The original sale fell thru-so the solicitor transferred the sale to a relative of theirs (without our knowledge). We dont care who brought it in the end....but it ended up being a rent to buy ....and we are now several thousand euro down on the original price we were getting.

All very complicated....and doesnt help when your solicitors loyalty is with the other party....!!

Any way...your posts have helped us- Thanks.

That's a Spanish solicitor for you!

Please just help me out here 0210 because i am confused.

You said in September 2010 that you hadnt got all the money for the sale.

And then the sale turns out to not be a sale but a rent to buy.

How long is the new `buyer` allowed to rent it before they buy?

Are you getting this rent actually paid to you?

Have you actually recived any money yet?

I ask because i get a bad feeling about whats going on and it has some tell tale signs.

0201 - you do need to be very careful especially when you lawyer decides to also become an estate agent and rental agent and probably also acting for tenant/buyer. Basically they will butter their bread on all sides!

Furthermore if the property is now in the hands of a family member they will chisel away at the price until they take the property from you for next to nothing.

Have you executed a power of attorney? do you know what contracts have been signed in your name under this POA? If you have given a POA and your lawyer has signed contracts then you have to live with those!!!! Iwould suggest you go to a notary and immediately revoke POA.

I would suggest you ask your lawyer to put in writing exactly what has happened (ie what contracts have been signed/deposits taken etc) and who he or she is representing and then get yourself another lawyer ASAP.

Don't make the mistake of thinking a Spanish lawyer will act in your best interests!

 Was there an initial commitment ( deposit contract or similar)? If so, a goods interpretation of this by an independent trustable lawyer ( there are many around), will put you in a safe place.

Kindest,

Maria

 You're a good lot to be showing an interest ......should have come on here for advice years ago!!!!

Our story is complicated...but it goes something like this---

We had a fantastic apartment for holidays and maybe to move to live in later on. .....but it was draining us financially so had to sell.

We needed to sell it quickly as each month meant big mortgage payments and property value decreasing. 

We finally got a buyer.( using an agent).

They put a deposit down.....but time went by. They kept saying there were delays with the mortgage.

They finally came back with the fact they couldnt get the mortgage in one payment.....so our solisitor arranged a contract where they would rent to buy. ie They paid us the mortgage and community as rent each month....and paid us the money for buying in stages.

As we were pleased to have a buyer we agreed- and a contract that we were happy with was drawn up.

We were happy enough as they had paid the first instalment up front....which meant that if they didnt pay the second one we kept all money already paid. They also weren't to have access to the property until all money was paid.

Any way....the inevitable happened....they didnt think they could raise the second stage payment. Our solisitor said it would be ok tho as his relative would take over the contract and continue where the others left off. We realised that the relative would be getting a good deal as the first stage payment was already paid....but we just wanted to have the property off our hands.....so the name on the contract was changed to the solicitors relative- who then paid the second stage payment. It was agreed hat any extra solicitor costs would be covered by the relative.

Our solicitor then contacted us to say the third ( last) stage payment had been made and he had been to the notary to complete the sale. The apartment was now sold and the buyers were living in it. All finished at last!!.

But... not all the money owed us had been paid. ie a months rent short (nearly 1000 euro) and the final stage payment was not fully paid. (approx 8000 euro short).....so we contacted our solicitor... didnt get any help from him....so we finally managed to contacted the relative direct. The relative was very suprised that I had found their phone number ( turns out they were a solicitor too!). They told us that they had not been able to raise the 3rd stage payment, so the apartment had been sold on again to someone else- by our solicitor.

The solicitor never informed us of this.....when we confronted him he said it was to help us. Thats well and good....but he should have informed us. We could have terminated the contract and kept the 2 stage payments.... then sold it again ourselves. Someone had a very cheap apartment as the 2 stage payments were already paid.

I wonder how our solicitor managed to complete the sale of the house when the buyer was a different person than the one on the contract...but as he has p/a I supose he could do that ok.

Any way....we bit our lips...and just focused on the fact it was at last sold....ok someone made a lot of money....but we were still getting what we originally asked for.

But.....we still havn't had all our money. Its over a year now. The solicitor insists the  buyer isnt responsible for the missed payments by the other ones.....yet we have emails from solicitor to say his relative (buyer number 2) would take over the contract and pay all monies owed. The contract was clear that completion would only be if all payments were made.

On top of that  our solicitor has sent us a bill which includes 5000 euro for selling the property for us...!!

So thats our story..... according to us we are owed about 10,000 euro. Our solicitor says that the buyer wasnt liable for the shortfall. And according to our solicitor we owe him 5000 euro- ontop of the huge bill he sent us for handling the sale. 

......but life goes on...  with lessons learned!!!!!

um yeah

um

WOW

at least you got 200k for your property?

I (as a bloke in the pub with an opinion on things i know nothing about) would send an invoice to the solicitor for the missing moneyz.
So he gives you a bill for 5000 and you give in an invoice for 10`000 or whatever is missing + interest and ask him to pay immediatly so you can settle up his bill.

but i have 0 legal experience at all.

You have been well and truly stitched up by a rogue lawyer and I'm would bet your lawyer made money of each little side deal.

Your case is typical of many I have come across.

I'm guessing your solicitor held a POA and he will argue that allowed him to do anything he wanted and that he did not need your agreement or permission.

Of course you could argue that he should have acted in your best interests and that he did not.

You could try bring a complaint before the colegio de abogados but they are a somewhat spineless bunch.

FARO,

Do you mind if I ask how you developed such a profound knowledge of the Spanish judicial & administrative system, despite your UK background ?

Your response would certainly assist those of us planning to move to Spain & hoping to get on top of the system. Many thanks.

Cheers,

Jon