21 essential tips buying property lanzarote real estate

21 Essential Tips when Buying Property in Lanzarote



Buying a property in Lanzarote

Lanzarote, a beautiful Spanish island where nature and year-round warm weather prevail. It’s a majestic place for several reasons - the people, the spectacular view, the unearthly landscapes, and the food among many others. It offers some of the best climates in Europe with an average daily temperature of up to 25°C.

You have all the reasons for wanting to have a piece of this place for yourself. And if you are one of the many who’s looking for a property on this Island, we’ve got you covered with everything you need to know! We’ve created a comprehensive buying guide that you should be familiar with and listed 21 expert tips that could be helpful to you!

The Buying Process in Lanzarote

The buying process in Lanzarote may be different from many other European countries but it shouldn’t be difficult. Here’s an easy step-by-step guide you can follow.

  1. Drafting a List of Your Property Requirements

  2. Before getting too excited about contacting an agent, make sure you already have a list of requirements or characteristics of the property you’re looking forward to buying. Part of this list includes the location, area size, budget, and other personal factors you can compromise on and those you won’t. This will help you save time in visiting properties that you would never consider.

  3. Preparing for your Purchase: Currency Exchange & NIE Number

  4. If your funds aren’t in euro, make sure you research where to get the best rate for currency exchange as currencies can fluctuate over time, and your local bank is rarely your best option. It’s better to get quotes from different companies, such as Smart Currency.

    Get your NIE number (Número de Identidad de Extranjero)

    Anyone who’s buying a property in Spain and is not a Spanish citizen needs to have an NIE (personal identification) number. This can be applied for from your own country through the Spanish Embassy. If you need help with getting the administration done or are struggling with translations, refer to our guide on paperwork in Spain.

  5. Finding and Viewing Properties

  6. Perhaps the most exciting part of the entire buying process is viewing properties. This is where you’ll get the feel and imagine yourself owning a certain property. You’ll need the assistance of a trusted real estate agent in this step. First, you’ll have to start finding properties to view. It’s better to start searching online on real estate portals like Your Property Abroad. We list different properties in Lanzarote from various trusted agents. The most popular areas for buyers include Puerto del Carmen, Playa Blanca and Costa Teguise. You can simply create a property alert based on your requirements (via the orange button in the search area) and you'll never miss your dream property! We’ll gladly assist you with whatever questions you have about buying property in Lanzarote.

  7. Making An Offer

  8. After finding and viewing a property that you really like and taking the time to consider everything (not too long though!), it’s time to put in a respectful offer. With over 15 years of experience, we can help you negotiate a deal as we do not represent the seller, unlike the agents. Our priority is that you are happy with your new property purchase.

  9. Pay The Holding Deposit or the Reservation Fee

  10. When you are absolutely sure about the property that you want to purchase, pay the holding deposit as soon as possible. Most Lanzarote properties actually require you to pay the holding deposit at the onset of the process. A holding deposit is a certain amount of money that a buyer initially pays to the seller to reserve a property and ensure that nobody else gets to view it. Make sure you understand and agree with the terms of the holding deposit before making a payment. Sometimes the holding deposit is refundable, sometimes it’s not.

  11. Sign The Deposit Contract

  12. When you’re sure about going ahead with your property purchase, the next step is to sign the deposit contract (arras agreement). This commits you to buy the property and commits the seller to sell it to you. More information about the arras agreement and what is needed for the paperwork can be found here.

    This contract sets out the details of the property, what is included, the location, and the owner. It also includes the payment terms, method, and amount. Usually, this involves the payment of 10% of the property price. If the buyer breaches this contract at this stage, they will lose out on their deposit. The deposit should be kept separate by the lawyer and shouldn’t be passed on until the final agreement.

    We highly suggest employing an independent lawyer at this step to discuss the entire Lanzarote property sales contract and documentation. It also makes the entire process smooth and stress-free since there’s someone who will assist you in understanding the technical terms and jargon within the contract.

  13. Valuation and survey

  14. If you’re paying the property in cash (no mortgage), you can skip this step. For others, it is more common to secure a local mortgage from the bank. Before they lend you the money, they will need to carry out a valuation at your cost. The additional fee can vary depending on your chosen lender. A valuer will then visit the property to assess its worth before confirming how much they can lend you.

    Lanzarote properties aren’t required to have a structural survey conducted since the construction is simple. For your peace of mind though, you can arrange one for yourself.

  15. The Notary

  16. The completion of a contract usually happens 4-6 weeks after signing the initial contract. This is done at the Notary’s Office. A Notary is a witness to any large value sales in Spain. They will check and make sure the outstanding taxes, local rates, and utility bills are up to date. In 2018, this process was modified to be a two-step affair. At first, you are presented with the mortgage details in a bank document called FEIN (Ficha Europea de Información Normalizada, or European Standardised Information Sheet). Next, you will have to choose a notary to visit. The notary will check your understanding of the terms of the mortgage - the interest rates, penalties, etc. Once satisfied, both of you will sign the FEIN. The second visit to the notary is where you will complete the actual property purchase. This is where you will need to pay the outstanding balance (90% of the purchase price) and sign the Escritura or title deeds. Payment is in the form of a banker’s draft brought by the bank manager. For non-resident buyers, you will be asked to show your passport as proof of identification. If you’re not fluent in Spanish, you will need to pay for a translator.

  17. Escritura and Registering The Property

  18. After both parties have signed the Escritura, you will be given the keys and ownership will be transferred to you. This final step will be handled by your lawyer. Once registered, you are now officially the new owner of the property.

Choosing a Professional Estate Agency

Here’s one thing you should know; estates agents in Lanzarote are not regulated. This means, almost anybody can set an estate agency. So, how do you know it’s the perfect agency for you? We’ve noted some very important points you should look for in an agency!

  • Recommended by other people (your friends, family, colleagues, and even local people in the area)
  • Professional, honest, and fair in dealings
  • They make you feel comfortable
  • With an extensive range of properties
  • They can answer your questions with great knowledge

At Your Property Abroad, we only work with professionals whom we know and trust to take care of you - our client. We actively vet our partners and check their reviews before we add their properties on our website or set up a viewing with.

When you decide to view a property, we can take care of the back and forth communication of setting up viewings, giving feedback, and negotiating with the agent. That means you only need one point of contact. With more than 15 years of experience in Spanish real estate, you’re in good hands. Ask us anything about buying in Spain. We don't represent the seller, unlike the agents.

Getting a Mortgage in Lanzarote

One of the advantages of getting a local mortgage in Spain is the low interest rate. The mortgage application also only takes 2 working days. Non-residents also get up to a maximum of 60-70% of the valuation price or the actual purchase price, whichever is lower.

Local Banks

Estate agents usually have a list of recommended local banks and even get you sample quotes from each of them. More often than not, they are also very willing to assist you in securing a loan mortgage. Of course, you have the option to find the best bank for you. All you have to do is walk in and ask. Local banks in Lanzarote are used to communicating with English-speaking buyers.

Once all the required documents are submitted, the bank will schedule a valuation. Within 2-3 days, a decision will be ready.


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A bank in your country


Of course, you can also apply for a mortgage in your own country, however, not all banks give out mortgages for foreign investments. The fees are usually not as attractive either.


Via a Specialist Mortgage Broker

A mortgage broker will have access to many different lenders in different countries so you can easily compare rates. The application is free and you only pay if you decide to go ahead after your application being accepted.

More information about Mortgage Direct can be found here.

More Essential Tips for Property Buyers

Buying a property can be daunting, but we got you covered with the tips below.

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Find a Trustworthy Lawyer

The services of a lawyer are essential when buying a property in Lanzarote. Your lawyer can help you review and interpret the documents relating to the real estate such as title documents, mortgage terms, and purchase agreements. He will basically take care of the entire process for you. Vague and unclear terms can be avoided and any last-minute disputes can be resolved when there’s a law expert who’s representing you.


Do Your Research and Shop Around for Properties in Lanzarote

Buying a property in Lanzarote is a huge step to make and it can be the most significant purchase you will make in your life. Do your research and don’t let emotions play with you. Stick to the facts before committing yourself to a particular property. Check where the property is situated. Be logical and analytical. You may even want to define your criteria for what type of property you are looking for.

We can help you find the most ideal properties in Lanzarote. With our large network, you’ll be able to view a wide array of property choices. We’ll also help you get fully informed of the entire buying process as well as introduce you to mortgage lenders and currency exchange companies. We’ll be glad to offer you any assistance you might need for a smooth transaction.

Know Your Budget

There are other things that you need to consider aside from the monthly amortization. You have to determine your budget and spend within your means. In terms of what you can borrow, the banks calculate around one-third of your net monthly income and that has to be enough to cover your existing debts including any existing rental cost you might pay plus the new Spanish mortgage.

Do the Math and explore the flexibility offered by banks and other financing institutions. Know the longest term possible that you can afford and consider the fixed rate that you’ll get. Ask for a sample calculation and check if you can top up excess payment against the principal balance. Check for other administrative charges and penalty costs. All these details are important to help you finalize the property value that you will buy in Lanzarote.

Know the Property Purchasing and Running Costs in Lanzarote

Aside from the property price, there are other costs that you should consider, the cost of purchasing a property and the running cost. The purchase cost in Lanzarote properties may range from 8% to 14% of the property price and it may slightly vary because of some factors such as whether or not you are buying a property with a Spanish Mortgage, and the final price of the property itself. The running cost such as electricity, bin collection, water, community fees, and income tax among few others also varies from property to property. Knowing these expenses should also be a part of your financial consideration.

Check For Any Conditions or Restrictions

Like any other property, there may be restrictions in place on the Lanzarote property or apartment that you are buying. Some of the most common restrictions may include a no-pet policy or restricted building fences. Other communities may also not allow your property to be rented to tourists. Make sure that you understand all of them if there’s any.

Negotiate A Fair Price

The seller and buyer have different goals when it comes to price, and every seller has a different motivation for selling, based on urgency and other factors. It’s always good to remember that behind every property there’s a human being with an emotional investment in the property and a very low offer might come across as disrespectful. Often you can expect a counteroffer and then you go from there. For popular properties with several offers, you obviously don’t want to go in too low or wait too long, as you risk losing the property altogether.

When you contact us about a property we can help you figure out what to offer on the property, as we do not represent the seller, unlike the agents.

Understand Your Mortgage Agreement

Make sure you understand your mortgage terms and agreements. In most cases, the loan is secured against the value of your property until it is paid off. At the very least, you are expected to know the following:

  • What type of mortgage you should get
  • There are three primary types of property mortgages - fixed-rate mortgages, adjustable-rate mortgages, and alternative mortgages. Each type has its advantages and drawbacks. If you’re not familiar with any of this type, it’s best to consult a mortgage broker, such as Mortgage Direct, to help you understand and decide the type of mortgage that you’re getting.

  • The amount you will borrow and for how long
  • This is one of the most vital considerations that you should know when getting a mortgage. Once you know how much you want to borrow, you can check multiple scenarios by checking the interest rates and monthly amortization with different loan durations. Interest rates may vary depending on how long your mortgage will be so you also have to check which is more practical and economical for you.

  • The amount you will borrow and for how long
  • Real estate is a huge investment, and you'll want to be sure that you're making the best decision possible. Know exactly what property in Lanzarote you want to buy before signing a mortgage agreement.

  • The interest rate of your loan
  • You have to know the interest rate being charged for the entire loan term. Lending institutions offer different interest rates and you may want to compare their offers or even negotiate to close a mortgage deal with a lower interest rate.

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Know the orientation of your Lanzarote Property

The orientation of your property will have an essential impact on the value of your property. Understand the positioning of the property in relation to the Lanzarote’s seasonal variations in the sun's path and wind patterns. The orientation of the property influences its physical configuration including the well-being and living conditions of the occupant. Good orientation can also increase the value of your property in the future.

Think Long-Term

Think long term when buying a property in Lanzarote. Although buyers have different reasons for buying a real estate, most would agree that somehow they should get something from it in the future. Buying a property will only be an investment if you get something from it, whether financial or living experience.

Find The Right Timing For You

With all the considerations listed above, carefully assess when is the right time to purchase your Lanzarote property. Consider your financial status, the real estate market, your job security, and your preparedness among many other important considerations.

Taxes & Costs

Aside from the contract price you have to pay, here are other costs you will incur to complete the buying process.

  • Real estate transfer tax of 6.5% of the purchase price for resale properties and 7.5% for new properties.
  • Approximately 0,5% notary charges
  • Approximately 0,5% Property registration fees
  • Approximately 0,5% incidentals such as N.I.E.s and Translation fee for non-Spanish speakers
  • Legal fees (paid to the lawyer)
  • Mortgage fees (normally 1% of the mortgage amount) and Valuation fees

All these extra fees should add up to approximately 10% of the new declared value as it appears in the new title deed.

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