Purchasing real estate in Spain is becoming more and more fantastic. People are resorting to...
traditional barter and is enshrined in the current Civil Code, Article 1538, which defines barter as "an agreement whereby the parties undertake to give one thing in order to receive another".
On some real estate platforms, such as Idealista, you can find around 600 properties available for barter, from renovation properties to country houses or luxury chalets. Data suggests that this real estate contract model is on trend. According to the National Statistics Institute, there were 851 home exchanges in Spain in the first half of the year, 3.5% more than in the same period in 2022. In the case of land exchanges, the year-on-year increase was 16.5% by August. This is easier to understand if we take into account the general downturn''residential real estate sales, which fell 23.7% in September from a year earlier.
How does it work?
To purchase a home in this way, you need to carry out an appraisal of the home you want to exchange (valuation) and then put it on the market until someone offers a property that meets your needs. It is important to verify that these properties are unencumbered by administrative and mortgage obligations and that the property tax (IBI) has been paid. Once an agreement is reached, both parties sign a contract in which they commit to transfer the property to get the other. Later, the transfer of ownership of both properties is sealed in a notarized document and then the property is registered''in the Property Registry. But note that it is very difficult for both properties to have the same value. And, although on the face of it bartering does not involve the use of money, it is often the case that the party whose home is cheaper has to pay the difference.
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Benefits
This is a way to change your home without major financial outlay and without having to depend on mortgages. In addition, these properties tend to be cheaper, as their value is usually below market value. And since taxes and other''costs are calculated on the basis of this cost, their amounts are also lower. On the other hand, it is an alternative for those people who need to move to another city and are looking for a place to live in a new place without being financially ready to buy a home or take out a mortgage.
What about mortgage housing?
It is also possible to execute. However, the exchange necessarily requires the consent of the financial institution to change the owner of the loan, and the price of each property will be its market value, less the remaining loan amount. For example, Fotokasa gives the example of a property worth €100,000 and a mortgage of €20,000 - in this case it can be exchanged for a property worth €80,000 with no mortgage. In such cases, the new owner''Various options are available: to carry out a contract modification to change the mortgage holder, to take out a new mortgage in your own name, or to transfer the mortgage to another financial institution (subrogation) if it does not take over the change of ownership.
Trend
Although this "bartering" of housing is not a new phenomenon (it was very common in land sales to developers), it is now beginning to be seen as a viable alternative in light of the current housing situation. And this is a common phenomenon in times of economic crisis. In 2007 and 2008, for example, there were more than 10,000 housing exchanges in Spain each year, almost 10 times more than in recent years. We may return to this point in the coming years.
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