Purchasing property from a bank in Spain
Properties sold by bank are usually advertised by real estate agencies in the public channels (like idealista) and these real estate agencies would be in charge to show you the property and prepare you application in case you decide to purchase.
Most of the bank properties are not in a good condition, not to say that some are in terrible condition, but if you are lucky you might find some offers that are really worth the asking price. Here we will give you more information on the process, in case you've found your jewel in the crown and would like to purchase it.
Making an offer
Everything starts with making an offer. If you like the apartment or house, but it seems a little bit overpriced, you can offer your price to the bank. This offer would be placed by the real estate agent, and it will take some time for the bank to react - usually couple of week. For making an offer you need to present your ID document and NIE number -- keep in mind that later one you will need a NIE number to complete the deal. Read here how to obtain NIE.
Your real estate agent could give you a clue what offer would work for the bank. Though usually lowering more than 5% could be difficult, if you are a gambling type and you are not that much in love with the flat, go ahead and lower by 20-25% and see what happens. It is possible that the bank comes back to you with a counter offer, or give you an opportunity to offer a little bit more. Each bank works in a different way, so there is no universal guide. However almost always you can discuss the price.
Offer is accepted
Congratulations -- your offer is accepted! And now what? Now you have to deposit some amount to demonstrate that you really want the property and start the process of submitting all the desired paperwork.
Deposit amount varies from bank to bank. For example for properties sold by Solvia (Sabadell) for prices around 50,000 EURO you will be asked to make a 3,000 EURO deposit. For properties sold by Bankia for pricess less than 50,000 EURO you will be asked for 1,000 EURO deposit, and for above 50K the deposit would be 3K EURO.
In any case whatever the deposit is, it does not guarantee that you will get the property. It only shows that you are interested and ready to fulfill all requirements the bank might have to sell you the property.
From here on, there are two paths - paying the property in cash (contado) or applying infront of the bank for a loan (hipoteca). As a new citizen in Spain, I would assume that you do not have the financial background to apply for a loan and focus on the cash option. In any case the agency that has shown you the flat will gladly assist you for the documentation that you need to provide to get a loan.
Submitting the paperwork
This process could take more than 4 weeks, and during these 4 weeks you will have to submit various document to prove that you are trustworthy. Banks do not want to sell in cash to people who cannot provide justification for the origin of the money -- this is to prevent money laundering. Your agent will inform you what exactly the bank is asking for, but more or less be prepared for the following:
Identification you need to submit copy of your national ID document, together with a copy of your NIE. If you do not have a NIE yet, please go to the nearest Extranjeria and get a NIE on a white paper. Later on with the preliminary purchase contract you can get NIE on a green card.
Occupation status the bank will ask you for you work contract and payslips (nomina). Although you'll pay in cash, this is a requirement that would show that you are a trustworthy citizen, who is not drinking coffee all day long, but working hard for his bread and butter.
Extract from your Spanish bank account for the last 2 years showing all the movements. Normally when you arrive in Spain and open a local bank account, you would load it with money from your own account elsewhere. In any case if there is income in significant amount from someone else, different than you, you will need to provide justification. For example if someone has lent you the money for the purchase and there is a corresponding incoming transfer to your bank account, you might be asked to present the contract between you and the lending party. Best case scenario is when money is coming from your own account in a different country, preferably country in the EU.
Extract from your foreign bank again for 1 or 2 years, and extract and overview showing your financial status in the foreign bank that you've used and from which you've made the transfer.
Justification on the origin of the money to prove that the money is yours. This could be done by providing tax declaration, any income payslips, invoices, other. Keep in mind that everything will have to be translated - preferably in Spanish, though for some banks English might work. Translation must be by a sworn translator - the so called traduccion jurada. Translation could take some time, and if you are in a hurry you can get charged pretty high, so plan this in advance.
When you submit all of these, the bank might ask for something additional. But in general this is more than enough to move ahead. As soon as all documents are submitted, the bank will start examining them and in a short while will inform you if you are considered trustworthy.
For Bankia, you will need to choose an office that works best for you, and you will need to submit all documentation only in this office.
For Solvia/Sabadell usually your real estate agent will submit whatever they are asking for, which will save you time, as you can do everything by email.
In any case, it is highly recommended that you have a printer and scanner at home, as you will need to scan a lot of documents, and probably print a lot of documents.
Things to consider
There are other important factors, apart from the price, that you need to consider before purchasing a property. Never guide yourself only by the price, since a low price might incur significant expenses later
Gastos de comunidad this is your monthly contribution for the maintenance of the building. More advanced building, having more facilities like lift, pool, garden, security will have higher monthly contribution. For some buildings these fees might also include the charges for heating and water, or other charges. Always ask the real estate agent to provide you information about these charges. For example in Valencia, in a building without elevator it is normal not to pay more than 15 EURO/month.
El I.B.I. which is your yearly contribution for the government for the property. This will vary among the different towns, but your agent can provide you with information.
Proteccion oficial some flats have government protection on the maximum price for sale and/or rent. Be careful with this one, as it might tie your hands. Always inform yourself upfront, if the property you intend to buy has protection. In case it does, request that information in writing regarding the protection is presented to you. If you do not understand completely the conditions of the protection, consult with a lawyer. Do not underestimate that or you might end up with something that you can't properly utilize.