Different types of estate agents & property brokers in spain

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There are several different types of estate agents operating in Spain, though in many cases British buyers are unaware that they face a choice. Different types of agents provide varying levels of service, so it helps to understand the alternatives before choosing which ones to deal with.

Spanish estate agents

It is common knowledge that Spain is the most popular destination for British and Irish buyers looking for holiday homes or a new life in the sun. It is also the most popular destination for Germans and Scandinavians, and increasingly for buyers from Eastern Europe too. This means that the Spanish property market can be segmented by buyer nationality, and many agents respond to this fact by targeting whichever nationality they are best positioned to sell to. But despite the extraordinary growth in foreign buyers over the last two decades, the biggest buyers of all are still, of course, the Spanish.

In general most Spanish estate agents (known in Spain as Agentes de la Propiedad Inmobiliaria, or Inmobiliarias for short) have failed to capitalise on the emerging foreign buyers market and continue to focus on a local Spanish clientele. There are of course exceptions to this rule but on the whole British buyers will find it much easier to make contact with British owned-and-run estate agents operating in Spain that with Spanish agents. This is a shame because, generally speaking, Spanish estate agents are better trained and more knowledgeable about the property market and conveyancing process than are the new breed of British agents. Many more Spanish agents will belong to either the API or GIPE professional associations, which on the whole indicates a higher level of training and some level of professional indemnity. Nevertheless it should be pointed out that the API and GIPE titles are often abused and are therefore not a reliable guide to professional service.

Spanish estate agents tend to cover their local area, though there are also some national chains and networks that cover the country. Spanish agents often don’t speak English and this can create a language barrier for British buyers. Nevertheless it is increasingly common to find local Spanish estate agents with English-speaking staff, especially on the most popular coasts.

The language barrier, a general preference amongst British buyers to deal with people form a similar background, and the fact that Spanish estate agents have failed to market themselves effectively to foreigners explains why British buyers usually end up working with British or Irish-run agencies. However in off-the-beaten-track destinations such as Teruel, Galicia and Extremadura, British buyers often end up dealing with local Spanish agents for lack of alternatives.

If you speak reasonable Spanish or have other ways of solving the language barrier it is always worthwhile approaching Spanish estate agents. Most local Spanish estate agents can be found in the yellow pages under the heading inmobiliarias.

Foreign owned-and-run estate agents in Spain

With the increase in the number of British people buying property in Spain over the last two decades, the number of foreign owned-and-run estate agents in Spain has exploded. These vary from one-person affairs working out of a car with a mobile phone and a website, to big companies with hundreds of staff and annual turnover in the tens of millions of Euros. The smaller agencies tend to focus on the market in their immediate areas, whilst bigger companies might have several offices along the coast, and even cover various different coasts. Some have also opened a sales office in the UK.

Foreign estate agents tend to focus on buyers from their home countries, so British and Irish agents focus on the British Isles, Germans on Germany and so on. British buyers usually end up working with British or Irish-run estate agencies, though most foreign agents are adopting English as their operational language and the alternatives are increasing.

It is now very easy to set up as an estate agent in Spain. Deregulation means that no qualifications are required and barriers to entry are low. With a modest capital outlay you can be in business and many of the British who have come to Spain have ended up selling property for lack of professional alternatives, not to mention the high commissions that can be earned from property sales. It is unsurprising, therefore, that thousands of British-run estate agents have sprung up in Spain, many of them very small operations that can stay in business on the back of just a few sales per year.

Unfortunately for British buyers a significant number of these estate agents are incompetent or unscrupulous. In many areas, especially on the Costa del Sol and rural Andalusia, the commissions charged are excessive (7.5% and up) and the service either cynical or incompetent. Pressure-sales techniques from the subtle to the outrageous are widespread and many buyers may be fed half-truths or lies in the course of their purchase. And claims by agents about after-sales service, so important for British buyers, are often nothing more than empty promises that evaporate once the sale has been made. Size is no guide to quality of service, and some of the biggest agents are the worst offenders.

Forewarned is forearmed. Buyers need to be aware that such organisations exist, and in greater numbers than most people might imagine. However this should not deter anyone from buying in Spain for two main reasons. On the one hand because there are also many excellent companies run by upstanding professionals who take good care of their clients. And on the other hand because buyers who keep their wits about them and follow the guidelines laid out in the section on choosing and managing estate agents can maintain the upper hand over even aggressive companies.

UK-based agencies offering Spanish property

Many UK-based estate agencies have started offering Spanish property, drawn to the business by the boom in the number of British people buying in Spain and the high commissions to be had.

One has to distinguish between the UK-based estate agencies that have opened up offices in Spain and those that offer the property of partner agencies in Spain. Those that have opened offices in Spain should be able to offer a portfolio of their own properties and will have more control over client service than those that simply promote the properties of other agents in Spain. This latter category will pass their clients to agents in Spain in return for part of the commission, and will have no control over the service, not to mention little idea of the dos and don’ts of buying property in Spain. UK-based agencies that have opened up their own offices in Spain have more value to offer than those that refer clients to partner agencies.

Multi-listing networks in Spain

Many foreign estate agencies in Spain participate in networks through which they share clients, properties and commissions. Agency A may have a buyer but not the right property, whilst Agency B has the property but not the buyer. Therefore they collaborate and make the sale, splitting the commission.

There is nothing terribly wrong with this arrangement so long as the agencies split the commission rather than increase it as more often happens. When agencies increase the commission the buyer ends up paying an inflated commission for little extra value. The fact that collaborating agents tend to increase the commission partly explains why it is so easy to find same property being advertised by different agents at considerably different prices.

It is usually apparent if your agent is offering you a property from another agency. For a start another agent is likely to appear as the key holder when you visit the property, though this is not always the case. If you are being shown properties from a collaborating agent always bring up the commission issue and asked for it to be clarified. If your agent is going to show you properties from other agents and charge an extra commission then this needs to be made explicit so that you have the choice of accepting the arrangement. Obviously you should try to avoid paying an extra commission, and if your agent is cagey on the subject, or you catch them being economical with the truth, then find another agent.

Formal collaboration networks, often called multi-listing networks, are also increasingly common in Spain. Participating agencies list their properties in a shared database that they can all sell from. The advantage in theory is a huge portfolio of properties with no variations in price between agents. However in reality there are several disadvantages for buyers when dealing with these networks.

For a start there are 3 hungry mouths to feed from the commission in a multi-listing sale: the agency introducing the buyer, the agency that has the property, and the company that runs the network. This can and in many cases does mean that networks charge a higher standard commission, which drives up the cost to buyers.

Then there is the fact that participating agencies have no incentive to include their most attractive properties in the network database. Agents don’t want to share the commission on an attractive property that they feel they can easily sell themselves. This gives them a reason to keep back their best properties for their own clients, whilst offering the network their least attractive properties that will be difficult to sell.

Corredores

In many rural areas of Spain corredores still dominate the property market. Corredores are local brokers who know the local community and know when someone wants to sell a property. It is unlikely that a corredor in a rural community will speak English but in such places they are usually the best way of finding properties for sale. Despite the informality of this channel there is no reason why corredores should be any less trustworthy than your average foreign estate agent. Corredores often charge a commission of 1% to the buyer and 1% to the seller, so they are much cheaper to buy from than foreign agents, who may be adding on a commission of 35%. The problem is you will have trouble finding and dealing with a corredor, as they don’t usually work from a commercial premises and probably won’t speak English.

‘Virtual’ property sales companies

The internet is changing the way people research and look for Spanish property. Property portals are the most obvious example of new business models made possible by the internet, and portals will be discussed in a separate section below. However the internet has also spawned a new type of businesses that can be described as ‘virtual’ property sales companies, and when it comes to Spanish property, cyberspace is full of them.

Although from their websites they appear to be estate agents in Spain, in reality many of these businesses are simply online property marketing companies with little more than a website and some agreements with estate agents. Unlike estate agents they do not have operations on the ground in Spain with which to build up a portfolio of properties and manage sales to clients. With none of their own properties to offer they reach agreements with estate agents (and in some cases developers) in Spain to pass them clients in return for part of the commission. Their strength lies in marketing, usually online marketing, and once the client has been ‘captured’ and registered with the agent or developer these companies withdraw into the background and hope the sale is made. They are often based in the UK and offer property in many different areas of Spain. This latter feature usually betrays the fact that they are not real estate agents as only a small number of big estate agents can cover different areas.

There is nothing wrong with using this type of website to research property in Spain. However you should realise that they are not offering their own properties, a fact that they often fail to clarify. And in most cases will never have seen the properties they list, nor know much about the Spanish property market. The client service that many of them offer is ‘talked up’ but limited, and the properties they list online are often out of date. There is always a risk that buying through them leads to a higher price due to commission agreements.

 

© Mark Stucklin (Spanish Property Insight)