Buying your home in Tenerife

At Cala Homes, we help you find the property you’re looking for, regardless of your budget or the type of property.

For us, it’s essential that purchasing your new home is an enjoyable process and that the property is the perfect fit for you. We offer our clients a comprehensive service, not only managing our own properties but also those of our collaborators, which allows us to cover the entire real estate market. This way, you can take advantage of our knowledge and receive advice on the best properties that meet your needs efficiently. Our sales agents become your personal agent, so you don’t have to contact multiple intermediaries or carry out all the searches on your own. Additionally, we help coordinate visits and personally show you the selected properties.

What is the property buying process in Tenerife?

1. Planning and Budget:

Before you begin your property search in Tenerife, it’s crucial to clearly define the price range in which you wish to invest. This will not only help you focus your search on properties that fit your budget but also allow you to manage your expectations realistically. In addition to the purchase price, it's important to consider all additional costs associated with acquiring a property, which can include:

Purchase Taxes: Such as the Property Transfer Tax (ITP) or the Canary Islands General Indirect Tax (IGIC), depending on whether you’re buying a resale property or a new one.
Notary Fees: For the drafting and signing of the public deed of sale.
Property Registry Fees: Costs related to registering the property in your name at the Property Registry.
Lawyer Fees: If you choose to hire a lawyer to assist with document review and the legal process. At Cala Homes, we have a specialist in Real Estate Law.
Possible Renovations and Repairs: Evaluate if the property requires additional work that could impact your final budget.

At Cala Homes, we’re here to help you understand and plan for all these associated costs. We provide detailed information on each expense so you can make informed decisions and ensure a seamless buying experience without surprises. Our goal is for you to have a clear vision of your investment and a smooth, hassle-free purchase experience.

Market Research:

A key part of the property buying process in Tenerife is familiarizing yourself with the different areas of the island to identify which best suits your needs and preferences. Tenerife offers a variety of zones, each with its own characteristics, advantages, and lifestyle. The island has a wide range of areas, from coastal and tourist spots to quiet and exclusive residential areas. It’s important to research the real estate market in each area that interests you. This includes knowing average prices, property availability, and current market trends. It’s also useful to understand the future development of areas, such as infrastructure projects and new constructions, which could affect property values. At Cala Homes, we are local experts with deep knowledge of the Tenerife real estate market. We’re here to advise you on the best areas that match your requirements and preferences. Whether you're looking for a property in a vibrant coastal area, a quiet residential neighborhood, or a location with growth potential, our team will provide detailed and personalized information to help you make informed decisions. Our goal is to ensure that you find the perfect location that fits your lifestyle and expectations, and we’re happy to offer our expertise to make your search as efficient and satisfying as possible.

Choosing a Real Estate Agent in Tenerife:

Selecting a real estate agent with experience and in-depth knowledge of the local market is crucial for finding the right property and successfully navigating the buying process. While the internet provides 24-hour access to information, researching and purchasing a property on your own can be challenging and is often a common mistake. Real estate agents exist for an important reason: their experience and specialized knowledge add significant value to the buying process. Here's why having a real estate agent is beneficial:

Research and Selection: A real estate agent handles all the research and prioritizes finding properties that match your criteria, saving you time and effort.
Identifying Important Details: Sometimes, properties can seem perfect at first glance, but an experienced agent will help you identify potential problems and important details you might overlook.
Investment Potential Evaluation: A good agent not only helps you find the ideal home but also advises on a property's investment potential, helping you make more informed decisions.
Local Knowledge: Your agent will provide valuable information about the area, including aspects such as quality of life, nearby services, and potential future developments.
Network of Contacts: Real estate agents have access to a network of contacts that may include service providers, lawyers, tax advisors, architects, and other professionals, saving you time in searching for and coordinating these services.
Negotiation and Interest Protection: Perhaps most importantly, a real estate agent acts as an expert negotiator. They’ll be present during negotiations and work to protect your interests, ensuring that you get the best possible deal.

At Cala Homes, our team of real estate agents is highly trained and ready to offer you complete assistance, from the search to the final negotiation. We are here to make the buying process as smooth and successful as possible, protecting your interests every step of the way.

Important Documentation:

Foreigner Identification Number (NIE) The NIE (Foreigner Identification Number) is a sequential identification number assigned to foreigners, necessary for personal identification and to carry out virtually any transaction in Spain: opening a bank account, obtaining a phone number, working, studying, etc. If you’re planning everything from abroad, you can apply for a NIE through the Spanish consulate. If you’re already in Spain, you can do it in person at a police station. In Tenerife, the necessary documentation to apply for a NIE includes:

EX-15 Form: You must fill out and sign the application form, which can be obtained from the Ministry of Inclusion, Social Security, and Migration’s website or at the police station.
Passport: A valid and up-to-date passport. In some cases, you may also need to provide a photocopy.
Identity Document: If you're in Spain, you may need to present your ID if you're a citizen of an EU country.
Reason for the NIE: You must explain why you’re applying for the NIE, such as for working, buying a property, opening a bank account, etc.
Proof of Payment of the Fee: You’ll need to pay an administrative fee (model 790, code 012) and present the payment receipt. The fee may vary, so it’s advisable to check the current amount on the official website.
Recent Photo: In some cases, a recent ID-type photo will be required.

It’s important to plan ahead, as it can be difficult to get an appointment at the police station in Tenerife during certain times of the year. In Spain, there are two types of NIE:

White NIE: This is the identification number assigned to foreigners who are not residents of Spain but need to carry out transactions such as purchasing a property. It’s sufficient for buying a property and for other related transactions.
Green NIE: This is granted to residents of Spain. It’s necessary for those living permanently in the country and for carrying out transactions such as working, accessing social security, among others.

Bank Account in Tenerife: In Tenerife, opening a bank account is not always necessary to purchase a property. In some cases, the transaction can be done through an escrow account managed by a notary. This method ensures that the money is securely held until the property transfer is complete. If you do decide to open a bank account in Tenerife, it can be done once you have your NIE. Remember that in Spain, you are required to be physically present at a bank branch to open an account. Requirements to open a bank account:

Identity document (e.g., passport or ID).
NIE.
Proof of funds / Tax declaration.
Any other documents the bank may require.

In addition to the standard documentation, some additional documents may be requested. The documents may need to be officially translated into Spanish and, if from abroad, may require an apostille. Most banks won’t charge a fee for opening an account, but there may be an administrative fee (annual, monthly, or quarterly). At Cala Homes, we assist you in both processes, from obtaining your NIE to opening your bank account. Our team is here to facilitate every step along the way. Don’t hesitate to contact us for personalized assistance and ensure that all processes are handled efficiently and smoothly.

Visits and Selection:

Once you’ve defined your criteria and budget, the next step is to visit the properties that interest you. It’s essential to evaluate each one in detail, considering aspects like location, features, and overall condition. Here are some tips to optimize this process:

Advance Planning: We recommend planning ahead and pre-selecting the properties that interest you. Last-minute visits may not be effective, so coordinate with your agent to schedule visits well in advance.
Visit Organization: Once you’ve chosen your real estate agent, allow them to organize several visits throughout the day. This will help you better understand the market without wasting time on unnecessary travel.
Number of Properties: Ideally, visit around five properties a day. Seeing more can be overwhelming and affect your ability to make an objective decision. If your visit is short, you can consider seeing up to ten properties in one day.
Night Visits: If you like a property during the day, we suggest revisiting it at night. Homes can change significantly with night-time lighting, and this additional perspective will help you make a more informed decision.
Open Communication: Don’t hesitate to express your opinion about each property. If you like it, let your agent know; if you don’t, say so too. This will help your agent adjust their search and suggest other properties that

better suit your needs.

Trust Your Agent: Keep your agent informed about your impressions and feelings. The more your agent knows about your preferences and concerns, the better they’ll be able to tailor their search and offer options aligned with what you’re truly looking for.

At Cala Homes, our goal is to make the process of selecting your property in Tenerife as smooth and satisfying as possible. We are here to guide you through each visit, ensuring you consider all important aspects, and helping you find the ideal property that meets your expectations.

Offer and Negotiation:

Once you’ve found the ideal property, the next step is to submit a formal offer. In this process, your real estate agent will be key, assisting you in negotiating the price and purchase conditions, always protecting your interests.

Submitting the Offer: After evaluating the property and determining that it meets your expectations, it’s time to make an offer. At Cala Homes, we always advise submitting your offer in writing (usually in a letter of intent) through your agent. This letter should include the offered price, proposed payment terms, and the transaction timeline. Make sure you also understand what will be included in the sale, such as furniture or fixtures, to avoid any later misunderstandings.

It’s important to make a reasonable and serious offer, as the more formal and well-structured your proposal is, the greater the chance of reaching a favorable agreement.

Price Negotiation: The initial price of the property is not always the final one. This is where your agent’s negotiation skills come into play. Rather than engaging in direct negotiations with the seller, which can become personal and unmanageable, it’s better to do so through an agent. This process is more gradual and better managed, and we have found that negotiating through an agent is usually more beneficial for the buyer. With their market knowledge and negotiation experience, the agent knows how to handle discussions to achieve the best possible price.
Offer Conditions: Besides the price, it’s essential to negotiate other conditions, such as payment timelines, possible repairs before delivery, or the inclusion of certain furniture or accessories. If you have any special requirements or conditions, such as the need for renovations or additional deadlines, these contingencies should be clearly stated in the original offer. Your agent will help structure an attractive proposal for both parties, ensuring that all your needs are reflected in the agreement.
Response and Adjustments: Once you submit the offer, the seller can accept, reject, or make a counteroffer. At this point, your agent will continue the negotiations to reach a satisfactory agreement for both parties. During this process, price or condition adjustments may be needed, and it’s crucial to have an expert handle these dialogues professionally.
Protecting Your Interests: A good real estate agent will always focus on protecting your interests, ensuring that you get the best possible deal without compromising the quality of the transaction.

At Cala Homes, our agents are trained to conduct successful negotiations, ensuring you get the property of your dreams under the best possible conditions. We will accompany you at every step, ensuring that the process is transparent, efficient, and that your interests are always protected.

Legal Process:

The legal process is essential to ensure that the purchase of your property is carried out without problems or complications. To this end, it is essential to have the assistance of a lawyer specializing in Real Estate Law, who will oversee all legal aspects and protect your interests. At Cala Homes, we carefully review the simple notes of each property before putting it up for sale, ensuring everything is in order. Alongside our specialist lawyer, we also verify that the property has no outstanding debts or encumbrances. In the event we find any, we work to locate and settle them before the property transfer, preventing any future inconveniences. Our lawyer will handle the following key areas:

Debt and Encumbrance Verification: We ensure that the property is free of mortgages, liens, or other encumbrances that may affect the transaction. If any are detected, we take care of resolving them before the purchase.
Contract Preparation: Once the offer and purchase conditions have been accepted, a private sale contract (Arras Contract) is drawn up, where all the agreed terms are established. At this time, the buyer makes an initial payment, generally 10% of the property's value.
Coordination with the Notary: Additionally, we coordinate with the notary for the signing of the public deed of sale, ensuring that the entire process is legally secure and transparent.

By working with Cala Homes, you can be confident that the legal and financial aspects of your property purchase are fully under control, ensuring a smooth and hassle-free purchase.

Finalizing the Purchase:

The final step in purchasing a property is the formalization of the transaction, which takes place with the signing of the sales contract and the transfer of the agreed funds. It’s crucial that at this point, all documents are in order, and the property transfer is completed without issues. At Cala Homes, we accompany our clients on the day of the notary to ensure everything runs smoothly and correctly. We ensure that all legal and financial aspects are properly managed, from signing the deed to the official transfer of the property. Our services include:

Document Review: We verify that all the necessary documents are complete and in order, including the sales contract, simple notes, and other legal documents.
Signing with the Notary: We’ll be by your side at the notary to facilitate the signing of the public deed and ensure that everything is correctly formalized.
Fund Transfer: We coordinate with all the involved parties to ensure the transfer of funds is carried out smoothly, guaranteeing a secure and trouble-free purchase.

At Cala Homes, we ensure that the final process of acquiring your property is as smooth and uncomplicated as the rest of the experience. Your peace of mind is our priority!

Post-Purchase:

After the purchase, it’s important to conduct a final inspection of the property and coordinate the necessary services for your move. This step ensures that your new home is ready to be enjoyed without any issues. At Cala Homes, our commitment doesn’t end at the notary. We continue to support our clients and provide assistance in anything they need after the purchase, offering a wide range of post-purchase services:

Agreements with Renovation and Decoration Companies: We have agreements with construction companies, interior designers, and kitchen furniture suppliers. We accompany you throughout the renovation and decoration process, ensuring that the final result reflects your style and needs.
Holiday Rental Management in Tenerife: If you wish to rent your property as a holiday home, we handle everything from management to promotion, ensuring it complies with regulations and maximizing its profitability.
Transfer of Utility Bills and Taxes: We take care of transferring the ownership of services such as water, electricity, and local taxes, so you don’t have to deal with administrative formalities.
Relocation Assistance for Foreigners: For international clients, we offer relocation services, assisting with the move, legal formalities, and adaptation to your new life in Tenerife.
Any Other Needs: At Cala Homes, we’re committed to helping you with anything else you need, ensuring your post-purchase experience is as comfortable and satisfying as possible.

We take care of every detail so that you can enjoy your property in Tenerife without any complications. Your peace of mind is our priority!

Timeline of the Property Purchase Process in Tenerife:

In Tenerife, there are several types of private contracts that you can sign when purchasing a property. Below are the most common ones:

1. Reservation Contract

This document, signed by both the buyer and seller, allows the property to be reserved for a set period, usually between 7 and 14 days, or longer, depending on what has been agreed upon. During this period, the buyer must pay a reservation fee, which usually ranges from €5,000 to €20,000, or 1% of the purchase price, depending on what has been agreed between the parties. This fee guarantees that the property will be taken off the market. If the buyer decides not to proceed with the purchase, they will forfeit the reservation fee as compensation for having withdrawn the property from the market, unless the contract includes specific clauses allowing them to back out without losing the money.

2. Private Contract with 10% Payment

Once the reservation contract is signed, the next step is to formalize a private contract in which a payment equivalent to 10% of the purchase price is made, including the reservation fee already paid. If 1% was paid during the reservation, the remaining 9% will be paid at this stage. In some cases, this step may be skipped, especially with high-value properties. There are three types of private contracts that you can sign when making this payment: a. Earnest Money Contract (Arras Contract): This contract allows the seller to withdraw from the sale if they return double the amount paid by the buyer. However, if the buyer withdraws, they forfeit the 10% paid. Although it penalizes the seller, it gives them the option to back out of the deal. b. Private Sales Contract: This contract is less common because it obligates both the buyer and seller to follow through with the transaction. If either party decides not to comply, the other can legally compel them to do so. Therefore, it is a more binding and rigorous contract. c. Purchase Option Contract: In this contract, the seller cannot back out once it’s signed, while the buyer has the option to decide whether they want to proceed with the purchase. If the buyer does not exercise the option, they lose the 10% paid, but there is no penalty for the seller.

3. Mortgage

If you wish to finance the purchase with a mortgage, it’s advisable to begin the process as early as possible, as approval can take up to two months. Banks in Spain generally require documentation proving regular income. The general conditions of a mortgage in Spain may vary depending on the bank, the client’s profile, and the type of mortgage, but overall, the main aspects are as follows: Financing Percentage:

Residents: Banks usually finance between 70% and 80% of the appraised value or the purchase price (whichever is lower).
Non-residents: For non-residents, the financing percentage is generally lower, between 50% and 70%.

Mortgage Term:

Terms typically range from 15 to 30 years, depending on the applicant’s age and the bank’s policies.
Some institutions allow terms of up to 40 years, although this is less common and usually available for younger applicants.

Early Repayment Fee:

For variable-rate mortgages, the early repayment fee is usually 0.25% for the first few years and may disappear after a certain period.
For fixed-rate mortgages, the early repayment fee can range between 0.5% and 2%, depending on when the repayment is made and the contract conditions.

Additional Requirements:

Life Insurance: In many cases, banks require the buyer to take out life insurance linked to the mortgage as an additional guarantee. Often, the bank offers its own insurance, but the customer has the option to take it out externally.
Home Insurance: It is mandatory to take out damage insurance covering at least the property’s reconstruction value.
Additional Linking: Banks often offer better conditions in exchange for contracting additional products such as insurance, pension plans, or payroll direct deposits.

Average Interest Rates:

Variable-rate mortgage: The interest rate is linked to the EURIBOR (the European benchmark index) plus a differential, and current interest rates are typically between 1% and 2.5%. The EURIBOR fluctuates, so the interest rate may change over time.
Fixed-rate mortgage: The average interest rates for fixed-rate mortgages are between 2.5% and 4%, depending on the term and market conditions. Although typically higher than the variable rate, it offers stability in monthly payments.

Other Related Expenses:

Formalization Costs: In Spain, many of the costs associated with setting up the mortgage (notary, registry, management, etc.) are borne by the bank, although the buyer is still responsible for the cost of the property appraisal.

These conditions may vary, and it’s advisable to review the current offers from various financial institutions to find the most suitable one for your situation.

4. Sales Deed

The process of finalizing the purchase is carried out at the notary, where all the involved parties must be present: buyers, sellers, their legal representatives, and bank representatives if a mortgage is involved. Once the deed is signed, the property is immediately transferred to the buyer, who assumes full responsibility. Payment for the property can be made by bank checks or OMF transfers (Funds Movement Orders) through the Bank of Spain, ensuring security for both parties during the transaction.

Bank Checks: A secure form of payment, as the check must be presented and validated by the bank before the transaction is completed.
OMF Transfers: OMF Transfers, or Funds Movement Orders, are transfers made through the Bank of Spain. This method ensures that the funds are transferred securely and efficiently, providing an additional guarantee in the payment process.
Escrow Account: Alternatively, the money can be deposited into the notary’s escrow account. This method eliminates the need to open a bank account in Spain, as the money is held in the notary’s account until the transaction is completed, offering a high degree of security and peace of mind for both parties.

These methods ensure that the transaction is handled transparently and securely, protecting both the buyer’s and seller’s interests. Afterward, the deed is registered with the Property Registry, a process that can take up to three months. With a simple copy of the sales deed, you’ll be able to transfer the ownership of services like water, electricity, gas, and homeowner association fees into your name.