- August 23, 2006 at 11:37 am #52149
Does anyone know if it is legal for an agent to keep a reserve should a buyer change their mind? I was told by one agent that they keep the reserve for up to two years after which if you dont purchase a property through them they keep. any thoughts?
- August 23, 2006 at 1:00 pm #65105
Did you sign a deposit contract? There must be clause on devolution of amounts there. If not, is there any evidence of the contractual relationship between the two of you?
- August 24, 2006 at 9:27 am #65152
- August 25, 2006 at 3:40 pm #65183
Yes I did sign a deposit contract – so that is the evidence of a contractural relationship. Was recently approached by another company who said if we bought through them they would give cashback of 10,000 euros on completion. Thats enough money to cover some fees.
- August 25, 2006 at 6:21 pm #65193
You must be paying well over the odds if they are willing to return 10000€ of your money 😯
- August 25, 2006 at 7:11 pm #65195
Every agent that is selling property on site we are looking at has it priced the same as what we were quoted by our agent. All the agents must be on fantastic commision – some of which I would like to benefit from.
Even when we went to the site to view property we asked for a price list and it was as we were quoted. Im learning a few lessons with this purchase.
Thanks for your response.
- August 25, 2006 at 10:28 pm #65198
There are some desperate companies out there. I’ve been sent an email by a developer in Murcia offering 18% commissions, even though I don’t sell property. Imagine what they must pay their most important agents! What is worse, I know that some of the big agents focused on UK/Irish buyers and working in Murcia and South Costa Blanca earn commissions of 20 to 25%.
- August 26, 2006 at 9:15 am #65204
Mark, Im actually shocked that it can be so high. Do we have a right to ask our agent how much commission they are earning from the developer?
I’m beginning to think it should be written into contracts so buyers know exactly what they will be paying and for what.
All thoughts/experiences welcome.
- August 26, 2006 at 10:25 am #65206
Yes of course you do! Ask to see the selling agreement they have drawn up with the seller.
I was enquiring about a house for sale this week – there was a private Se Vende sign hanging on the front so I phone the owner direct and she told me her asking price was €60000. The house is on an agent’s website right now for €96000 and on another’s at €93000! That’s 60% commission in the worst case, 55% in the other. I’d love to find out how they justify that one!
- August 26, 2006 at 10:58 am #65209
One reason…..don’t know if it’s true 😯 is that the agent will use their commission to negoiate a reduction in the price. This way vendor can receive their asking price. Which if true and usually happens doesn’t sound sooooooooo bad
However….will we ever know 🙄
- August 27, 2006 at 12:27 pm #65235
Thanks for your comment – my husband and I really like the villa that we hope to put a deposit on – in asking our agent for a copy of the contract they drew up with the developer so we can see what commission they earn, my husbands fear is pissing them off and inadvertently losing the villa. We are not sure at this point who has the reserve – the developer or the agent. We are first time buyers and nervous of course – we are considering dealing through the other agent but would like to know his contract with the developer as well.
Any/all advise would be greatly received. We are prepared to loose the reserve and still save 7000 euro.
- September 11, 2006 at 5:58 pm #65611
Pulled out of La Tercia – and back to the drawing board. Thinking of employing a buyers agent – any thoughts, anyone.
- September 11, 2006 at 6:36 pm #65613
I fail to see why anybody would pay a deposit to an agent – and I am an estate agent.
Only once in the past three years has our firm taken a deposit directly from a buyer, and in this case there were several unusual circumstances.
My advice is to always insist on having an exchange contract drawn up directly between the seller and buyer. Any deposits taken should be paid over as a banker’s draft to the vendor and not the agent. The same contract should specify what agency commission is payable by the vendor and/or buyer. Our contracts also go on to specify the real price and the declared price – if a difference has been agreed.
If the seller or buyer is abroad then you should only deal with a lawyer, or agent, who can show that he has been given power of attorney before a notary.
This simple step will avoid most of problems that can arise during a sale.
- September 11, 2006 at 6:53 pm #65614
Our contracts also go on to specify the real price and the declared price – if a difference has been agreed.
Really ? Well I wonder how the Tax Office is going to react when you are obliged to bring over to the notary the private exchanges contract so that the Notary checks the price is the same as that of completion so as to stop tax evasion, which is a criminal offence in Spain, everybody seems to forget this, especially REAs.
And if the price is different you will be in trouble. Not only the lawyers will be in trouble, Estate Agents will also be found liable for this and prosecuted if neccessary. This is going to happen soon with the new laws announced by the Spanish Tax Office.
Even for exchange contracts drafted 2, 3 or more years ago with completion near at hand.
Just so you know …
- September 12, 2006 at 8:01 am #65620
I take your point Draken and we may have to change our practice in the future.
Yet even if we change this point in the future, we will still continue to prepare contracts between buyers and sellers and insist that deposits are paid directly to the seller.
- September 12, 2006 at 1:18 pm #65628
We have excepted an offer on our apartment and have been told by our estate agent that the deposit will be released to our Lawyer.
Our buyer is buying a number of properties in our area and we know a couple of the other sellers that they are buying from. All of which have received their deposits.
There has been some delay as they are setting up a Spanish Company to buy the properties through. We have been advised by our Lawyers not to except the deposit, as once you do this you have to sell to the buyer, even if it takes them months or years to complete, and you will have to go through the courts to cancel the agreement.
Does any one know if this is true? We are feeling very insecure at the moment as we have incurred legal fees, and was hoping to off set these against the deposit should anything go wrong. We have not heard anything for 2 weeks now and every time we try to contact the estate agent they are not in. Should we press our Lawyer to accept the deposit? Or will this really tie us in?
Any advise would be appreciated.
- September 12, 2006 at 1:25 pm #65629
When a 10% deposit is handed over the preliminary contract should state a completion date, this is an advantage to both vendor and seller.
I would never hand over money to an agent when purchasing, neither would I allow them to accept money on my behalf if I were a vendor.
- September 12, 2006 at 3:14 pm #65635
I am assuming that as there is a deposit you have signed an arras contract. This should very clearly state the terms and conditions of the sale – including as Katy rightly says a completion date. If there are any terms in the contract that stipulate time frames or dependencies you can ask for them to be removed (for example the contract may stipualte that the buyer has 6 months to complete- which you may not agree with).
If you agree with the terms and accept the deposit then you have agreed to give that buyer an OPTION to buy your property providing the terms of the contract are met – ie the timescales. If the contract over runs on time then ou can keep the deposit and resell your house. However normally you would give an extension to the date and find out why the buyer hasnt completed (an extension of 28 days over contract date is acceptable)
With regards to the estate agent keeping the deposit – this is normal practice for a reservation deposit until the buyers solicitor does hisnecessary checks – this shouldnt take mroe than 2 weeks. After which time the agent or the person holding the deposit should transfer thsi to you.
This is merely to protect the buyer if his searches show a major problem and he/she cannot get the deposit back. I have known for example an owner to be in the process of being repossessed accept an offer, pay off the mortgage arrears and then the buyers solicitor finds there are lots of embargos on the property and the problems then begin. Getting a deposit back which is already spent is difficult. So it is best to hold the deposit in escrow (with a solicitor usually) and always in a cleint account, until such time the buyers solicitor is happy.
However what you describe sounds like the agent trying to guarantee he receives his commission in the event of problems.
You could just tell the agent that until you receive the money any contract is not applicable. Note he should transfer all the money to you not just some of it less his commission unless you have specifically stated this is ok.
- September 12, 2006 at 3:18 pm #65636
We have only signed an agreement with the estate agent to sell our property to the buyer.
Thanks for this information, I will get onto our Lawyer to accept the deposit with a specified time scale.
- September 12, 2006 at 3:29 pm #65637
that is a different kettle of fish altogether. Be aware that this is a practice that some estate agents use to mask their commissions to the buyer and seller. NEVER sign an agreement between agent yourself. It should always be between you and the seller directly because if anythign happens to the buyer there oculd be problems later on.
I know of exactly this incident happening where the agent signed between the agent and seller and agent and buyer – there was a 11 month timeline because the seller weas having a hosue built. In the meantime the said agent died, the place closed down and the buyer had no recourse because she signed between her and the agent – ever tried getting yourmoney form a dead man?
So be VERY careful signing with the agent – INSIST on a direct contract between you and the seller. Also insist they give you a liquidacion de venta which breaks down the costs of sale – including commission and IVA – it is your right, this should be signed by both you and the seller. You may be asked to take this to the notary in future as a new law coming in means the Notary has to see sight of all contracts.
- September 12, 2006 at 3:50 pm #65639
🙁 Now I am worried!
This sale has been dragging on since the end of May.
We were told by friends on our complex that an estate agent (he also lives on our complex) had found them a buyer and was looking for more properties in the area, that we should contact him if we wanted to sell. So we did, the EA said he would bring the prospective buyer around to view our apartment. The day after the viewing we received an offer which we accepted. THe EA then said we needed to sign an agreement with them to sell our apartment to the said buyer. The agreement was a piece of headed paper from the estate agents office with the name of the buyer and the agreed price.
We decided not to go with their recommended lawyer, but used the firm we have been using to do our tax returns for the last few years. Since then we have one excuse after another as to the delay. We have not signed anything since. I have been chasing our Lawyer to get our deposit as I know our friends have recieved theirs. Our Lawyer has then told us that he is acting in our best interests by not accepting the deposit at this stage. Hence my original post. We are now concerned if it does not go ahead we will be left with legal bills and no deposit.
Should we contact the estate agent directly and ask to see this liquidiacion de venta or is it something our Lawyer should have?
Thanks for your advise
- September 12, 2006 at 4:04 pm #65640
I would advise you speak to your lawyer and ask him – he is after all acting on your behalf.
However have you asked the agent directly what the hold up is?
Some questions for you
1. Does the contract give a date or a timescale
2. Does it mention a deposit? If so how much does it mention?
3. Was the contract that you signed also signed by the buyer?
4. Have your neighbours or friends had similar problems?
By the way it is not illegal for an agent to sign between buyer and themselves and seller and themselves it is just a sharp practive used to mask the true commissions if the buyer backs out then he has to complete the contract or pay the consequences – ie the deposit
But they must issue you wih a breakdown of the costs including commission
- September 12, 2006 at 4:16 pm #65641
We signed a 1 page document on headed paper it had the buyers signature already on it agreeing to pay a 3000 euro deposit.
The agreed price was also stated and the fact that the estate agent would receive 5% commission.
That is all we have signed, our friends are also experiencing the same problems, their lawyer has however accepted a 6000 euro deposit.
- September 12, 2006 at 4:40 pm #65645
it seems then that you have almost everything you need – except the small matter of a 3,000 euro deposit. Thedifference between the 3,000 and 6,000 deposit is generally down to the agent. This is nothing more than a reservation deposit to take the property off the market and is to ive the owner time to do searches. There is usually a time of 14 days unless otherwise agreed.
I suggest you speak to the agent yourself and find outr why he hasnt given you the deposit yet. There may be a valid reason, but he should specifiy this to you. Dont accept the line “It is how we do things here”
I would speak to your agent about getting the deposit. However you also need to insisit on a timescale – whether it be a month or 6 motnhs – but insist on a timescale – it is highly unuasual not to have a definitive date.
Best wishes and good luck
- September 12, 2006 at 10:26 pm #65658
Your story sounds very similar to something that happened to us last year, our EA also brought a client round who made an offer on three properties and placed 3000€ holding deposits on each, ours included.
He then strung us along for 3 MONTHS 😯 with excuse after excuse,money frozen in Madrid etc, whilst we of course incured legal fee’s.
The buyer Mr P. Smith !! then faded away.
Unfortunately for us our holding deposit was paid direct to the agent, an IN member, who promply kept 50% for their inconvienience 👿
I hope your buyer is genuine as I suspect ours was using the pretence of buying to enable them to get (launder) money into Spain.
Good luck and make sure you agree a set time scale for the 10% and completion before going any further
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