Spanish Estate Agents

Up until the year 2000, anyone selling property in Spain had to be a member of the one of the two professional real estate associations – API and GIPE. Now, since the market was deregulated in 2000 basically anyone can play the role of intermediary in Spanish property transactions.

When buying a property in Spain, your biggest risks often come from your choice of estate agent. Their levels of competence, attitude and ethical standards can greatly effect the success or failure of your investment.

Although there certainly are some that should be avoided, thankfully there are many highly trained, very competent and ethical agents in the Spanish market. The challenge is finding them.

Types of Real Estate Agents in Spain
Before you choose an agent, it’s a good idea to get a brief understanding of how the market works. There are several types of agent – all offering varying levels of service.

Spanish Estate Agents
A lot of the Spanish agents belong to the API or GIPE professional associations. This should indicate a higher level of training and professionalism. The problem is that these titles are often abused so in some cases aren’t really a true guarantee of professional service.

Spanish agents normally just sell property in their local area. Sometimes they’ll have nationwide chains and networks throughout Spain and the Canaries.

Most of them don’t speak English, so this can be a problem for UK buyers. In the popular coastal areas (Costa del Sol etc.) you’ll find an increasing number of Spanish agents with English-speaking staff.

Foreign Estate Agents in Spain
It’s usually the case that a UK family looking to buy a place in Spain will instinctively go to an English or Irish-run estate agency.

Foreign owned-and-run estate agents normally try and sell to buyers from their home countries. British and Irish agents focus on buyers from the British Isles, the Germans focus on the Germans etc.
Most foreign agents are now adopting English as their operational language.

Setting up as a real estate agent in Spain is very easy. Ever since the market was deregulated (2000) no qualifications are required and barriers to entry are low.

Foreign estate agents in Spain have come under much criticism over the years. Unfortunately, there’s been a number of cases where these agents have been found to be incompetent or unscrupulous or in some cases both.

You’ll find them mainly in the very touristy areas like the Costa del Sol, Costa de Almeria, Costa Calida and Costa Blanca. A lot of times the commissions charged are blatantly excessive and the level of service low.

Outrageous (time-share style) pressure-sales techniques are often used and in some cases agents tell clients half-truths; anything to close a quick sale.
Be warned – such companies do exist.

UK-based Estate Agencies
There are more and more UK-based estate agencies offering Spanish property every year. They’ve been drawn into the market by the huge numbers of UK buyers that are looking for property in Spain and the very high commissions they can make.

Multi-listing Networks
This is where a group of foreign estate agencies participate in a network where they share clients, properties and commissions. For example, one agency might have a buyer but not the right property, while the other agent has that property but not the buyer.

They collaborate with each other, make the sale and “split” the commissions – everyone’s happy; you get the right property and they make the sale.

The only problem is that instead of splitting the commissions between themselves, they more often than not increase the commission. So the buyer pays an inflated commission for a service of little extra value.

Spanish Corredores
In rural parts of Spain, corredores are still used extensively. These are property brokers that know the local community extremely well and know when someone wants to sell their property.

If you’re looking for a place in a rural community, using a corredor is a likely to be your best option. It’s doubtful however, that they’ll speak any English, so be sure to bring an English/Spanish friend with you if you don’t have the lingo.

It’s usually an informal arrangement but there’s no reason whatsoever to think that a corredor might be less trustworthy than your average foreign estate agent.

They’re certainly a lot cheaper. They’ll often just charge a commission of 1% to the buyer and 1% to the seller. Some foreign agents add on commissions of up to 35%.

Corredores can often be difficult to locate, as they don’t usually work from a commercial premises. But, if you ask around the local community, you should eventually find one.

It’s everyone dream – jetting off the Spain’s endless sunny skies whenever you feel like it, not having to worry about accommodation – and feeling and being right at home as soon as you arrive.

Buying a second home in either Spain or the Canary Islands is a relatively uncomplicated process. There are, however a number of things you should consider, like getting a second mortgage, for example. This is often more difficult than a primary mortgage. Sometimes higher down payments are required too. These are just some of the financial considerations you’ll have to take into account.

Before you start your property search have a look at some of the pros and cons of buying a second home in Spain.

The Benefits of Buying in Spain
Provided you’ve chosen a good quality property in a good location, it should be going up in value every year. Spain has always been regarded as an excellent long-term investment option.

Rental income is the perfect way to pay off a mortgage. The property just pays for itself. Spain and the Canaries are two of Europe’s most popular holiday locations, meaning no shortage of demand for rental properties. On the Canaries, you can rent out your second home all throughout the year at tourist prices.

A holiday in your own “home away from home” is a delightful experience, much more enjoyable than staying in a hotel. Apart from having your own personal comforts and privacy you’ll have a lot more money to spend, having not paid for a hotel.

You could retire to the holiday home. Most people do. After a number of years making good returns through rental income you could decide to have the property all to yourself. By this stage it should have gone up in value significantly.

Thousands of people make the permanent move to Spain every year. Most never look back. It’s warmer, brighter, healthier and safer with a very laid back pace of life.

Things to Consider:

Additional Costs
These are ongoing and can mount up – things like property taxes, utility bills, and community fees etc – the same traditional costs you have to pay on your primary property. Even though you might just be there for short periods of the year, as the owner, you’ll be responsible for all of them.

If you’re going to rent out the property, you need to consider the tax implications – renting can greatly affect your own tax situation, meaning you’re sometimes liable for more tax payments and at other times you’re no longer eligible for certain tax exemptions.

Speak to a tax professional. They can give you advice about your individual situation (good or bad). In Spain and the Canaries there are plenty of English/Spanish speaking consultants.

Holidays
Will you (and your family) really use the place every year?
Staying in your own home is so much more comfortable than a hotel or holiday apartment but if you want to travel to new destinations every year, you might just end up paying for hotels and other services on top of your second mortgage.

Advice
Buying a holiday home in Spain is an incredibly rewarding experience – most UK buyers never look back.

Proper research often determines the success or failure of any local or foreign property investment - research the property, the area and the legal and tax implications. Spend as much time in the area as possible before you take the plunge.

Investing in the future
You might not be in a position to buy a second home now but in a few years time you might be. If you’d like your own home in Spain or the Canaries, the best time to start planning is now. If you remain focused, disciplined and start far enough in advance you too could become the happy owner of a dream home in the sun.

Speak to a financial planner or advisor. He or she should be able to come up with realistic financial targets that can help you reach this goal.