Real estate agents in Spain

spanish real estate agent spain
Real estate agents intermediate between buyers and vendors, and can make a big difference to the sale.

This section discusses Spanish real estate agents, helping you understand how they work, what motivates them, what to look out for, and tips to get the best results from an estate agent in Spain.

This guide to real estate agents in Spain was written in 2005 in the context of the Spanish property market at the time. The business has changed in many ways since then, generally for the better. Although many of the points made in this guide are still relevant today, it is in need of an update, so please bear that in mind as you read it.

Spanish real estate agents

When it comes to buying or selling property in Spain, most people from abroad will use the services of a local real estate agent. And what many buyers and vendors fail to appreciate is how important this decision is, with potentially unwelcome consequences.

The agent or agents you choose to work with will have a big impact on the success of your purchase or sale. The business has its fair share of cowboys and people with no clue what they are doing, and dealing with the wrong people can have a high cost.

To minimise the risk of problems try to work with one or two good agents, as they can advise you well, and find you everything on the market, collaborating with other agents as necessary. Don’t make the mistake of thinking that working with lots of agents will get you better results. The truth is that using lots of agents just wastes your time and demotivates the professionals, who have less incentive to give you the dedication they would as an exclusive client. Chose one, or at the most two good agents to help you buy or sell property in Spain, and let them manage the process for you.

Dealing with property brokers in Spain

It is always important to stay in control when dealing with real estate agents in Spain. You are the one spending the money so it should always be clear that you are the one who will decide when to visit, what to see, and what to buy.

The importance of this increases as the quality of the agents you work with decreases. The less trustworthy, professional and knowledgeable the estate agent the more you need to be in control of the situation. Unethical agents are more likely to take advantage of people who seem ill informed, disorganised and susceptible to pressure.

I used to recommend that you avoid dealing exclusively with one real estate agent in Spain. Work with several and make it clear to all of them that you are doing so. This demonstrates that you are not a ‘captive’ client, and helps to keep them on their toes. It also gives you wider access to information from different sources, which leaves you better informed, and harder to hoodwink.

However, with time I’ve come to the conclusion that the best way to go, if possible, is to work exclusively with one good agent. All good agents collaborate, so working with one does not limit your choice, and it incentivises your agent to go the extra mile for you. An agent that knows you are dealing with other agents has an incentive to try and sell you something quickly, before you buy from the competition. An agent who knows you are an exclusive client will take more time and care to find you the perfect match.

Always give the agents you deal with a written brief of your requirements at the start. This gives them the opportunity to give you useful feedback and demonstrate their knowledge of the market. It also makes it more difficult for them to waste your time with clearly inappropriate properties.

Make it clear from the start that you do not wish to be put under any pressure to buy. You are better off missing a property (there will always be another one, maybe a better one) than making a purchase you live to regret. The agents you work with should feel that you are more likely to walk away from them than buy from them if they try to apply pressure.

Of course it is in your interests to establish a good working relationship with one or more estate agents in Spain. However this does require that you play your part in building the relationship and treating estate agents correctly. Along with providing a clear brief you should be honest with them regarding your readiness to buy. If you are just doing preliminary research then make this clear and don’t make them think you are coming with cheque book in hand. Don’t waste your agent’s time if you can avoid it, and always let them know if you have changed your mind or bought through another agent. Good agents devote a lot of time and effort to their clients, and should be treated with courtesy and respect.

working with property brokers in Spain

Types of estate agents

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

Spanish companies (owned and run by Spaniards)

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.

Furthermore, many Spanish-run estate agents, be they API or GIPE accredited, are no better than estate agents run by foreigners. So nationality is no guide to quality.

Spanish estate agents tend to cover their local area, though there are also some national chains and networks that cover the country. The language barrier can be a problem, though many more Spanish estate agents speak English or a foreign language today than in the past. Most estate agents owned and run by Spaniards in areas popular with foreign buyers will have English-speaking staff.

Foreign owned-and-run estate agents in Spain

Foreign owned-and-run estate agents in Spain 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 foreigners who have come to Spain have ended up selling real estate 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 foreign-run estate agents (especially British) 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.

Editor’s note: The following paragraph was true back in 2005, but less so in the years after 2010: Unfortunately for foreign buyers a significant number of these estate agents are incompetent or unscrupulous. In many areas, especially on the Costa del Sol, Costa de Almeria, Costa Calida and Costa Blanca, the commissions charged are excessive (7.5% to 35% or more) 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.

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, because there are also many excellent real estate agents in Spain run by upstanding professionals who take good care of their clients.

Foreign-based outfits offering Spanish property

Many estate agents based outside of Spain, for example in the UK, Germany, and Ireland, also offer property in Spain, usually working with a local partner agent, though bigger operations have their own offices. The internet has made it easier for companies outside of Spain to offer Spanish property for sale.

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.

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.

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 might have trouble finding and dealing with a corredor, as they don’t usually work from a commercial premises, and might not speak a foreign language or advertise online.

how much do real estate agents make in spain?

How brokers should work

These are the skills and professional qualities you should expect of any person or company who you deal with trying to buy or sell property in Spain.

  • Be mature and speak good Spanish. Real estate in Spain is one of the biggest investments most people will ever make and the least buyers can expect is to deal with a mature bilingual sales person. Many of the people selling Spanish property to the foreigners in recent years have been little more than teenagers. They are flown in by costa agents, promised an easy fortune on a commission-only basis, and then unleashed on unwitting clients despite their total lack of understanding of Spain, Spanish, and the local Spanish real estate market.
  • Demonstrate real experience and knowledge of the local property market. When buying something as expensive as property you should expect help from an experienced sales representative who can demonstrate knowledge of the local area and property market. They should have lived in the area for at least 5 years. Look for agencies that are locally based in the area where you want to buy and that have a good selection of properties to offer. Avoid using agencies that aren’t locally based, as they may know less than you about the local property market.
  • Respond to your enquiries in a quick and professional manner.
  • Make an effort to understand your needs and requirements from the outset.
  • Help you to understand what the local real estate market has to offer and what you can realistically expect to buy given your budget and requirements. Unreasonable expectations benefit neither client nor agent.
  • Provide you with clear and useful property particulars or reports.
  • Show you a selection of suitable properties given your budget and requirements. Some real estate agents in Spain intentionally show clients highly unattractive properties (known in the trade as ‘put-offs’) in order to make mediocre but slightly more attractive properties (the ones they want to sell) seem wonderful in comparison.
  • Be unequivocal about what is included with a property, for instance furniture, and back it up with documentation.
  • When dealing with resale properties, agents should have a file with all the relevant documentation on the property. As a minimum this should include the land register filing (nota simple) and a copy of the title deeds. Well organised professional agents will also have receipts of local rates, utilities and community changes where relevant. For new build properties they should have a copy of all the relevant documentation provide by the promoter, for instance up to date price lists, plans and specifications, copies of example contracts and a copy of the building licence.
  • Be honest, erring on the side of caution, on matters such as rental potential, expected capital gains and the real costs of purchasing property in Spain. Many agents have been known to exaggerate the rental potential of properties and downplay the costs of buying and owning property. And no agents have a crystal ball. All the can tell you is what prices have done in the past.
  • Not put you under any pressure during the process. There is a fine line between pressure and well-meant encouragement, and it can be difficult to identify subtle pressure, which comes in many forms. As a general rule ignore all claims by a real estate agent that other buyers are about to swoop and that prices are about to go up. If you feel you are being put under pressure make this clear and if necessary drop the agent.
  • Accompany you to the signing of the deeds.
  • Keep you informed of construction progress and the dates when stage payments become due when buying off-plan.
  • Make it clear what level of after-sales service they provide. There is nothing wrong with an estate agent providing very little after-sales service if they are perfectly honest about this and don’t mislead you into expecting help that won’t be forthcoming. In reality you may be better off hiring professionals that specialise in after-sales services that receiving a half-hearted effort from estate agents.
  • Be open about the commission they are earning if you ask.

How much do real estate agents in Spain charge?

Estate agents in Spain usually charge the vendor a commission, though in some cases they charge both the buyer and seller a fee. Commissions vary by region and type of property, and over time. In the boom years agents could earn up to 35% on new developments in cheaper areas, but in most cases agents will earn between 1.5% and 5% of the sale price as a commission for bringing buyer and seller together.

The value they offer

A good Spanish real estate agent can provide a valuable service to foreign buyers. Spanish real estate agents are the main property ‘channel’, which means they put buyers and sellers together. Without them it is difficult and laborious for buyers to find properties, though the internet is starting to challenge the old order and create new models that put buyers and sellers in touch. For the time being, though, Spanish real estate agents are still the dominant channel for foreign buyers, who can benefit from the agent’s knowledge and experience of the local property market.

Their incentives

As well as understating the value that real estate agents in Spain can offer it helps to know a bit about their incentives.

Spanish real estate agents earn a commission from the vendor when they intermediate in a successful transaction. In a resale transaction the real estate agent will usually be paid the commission after the deeds have been signed before Notary, which is when the buyer pays the vendor in full. However in some cases the Spanish real estate agent becomes entitled to the commission once a deposit contract (contrato de arras) has been signed and the deposit (usually 10%) paid by the buyer. In this case the Spanish real estate agent will earn a commission (taken from the deposit paid by the buyer) even if the sale falls through. So Spanish estate agents can have an incentive to push buyers into paying a deposit even when the buyer’s financial circumstances would advise against it.

Many real estate agents in Spain are also quite ruthless about pushing Spanish off-plan developments (and for that matter resale properties) that pay them the highest commissions. The properties that that pay the highest commissions are not necessarily the properties best suited to the client. Buyers who allow one estate agent in Spain to control which properties they see should not be surprised if the selection they are shown is manipulated in favour of the real estate agent’s commissions.

When dealing with Spanish real estate agents one always has to remember that they are paid by the vendor, which means they are not paid to look after the buyer’s interests.

As in all areas of life, there are many excellent estate agents in Spain who more than earn their fees, and some total cowboys who prey on buyers and sellers. It all depends upon whom you deal with.

How to choose the right property broker or estate agent in Spain

how to choose the right real estate agent in Spain

Your objective should be to find a selection of competent, professional and honest Spanish property agents with mature, bilingual staff that are knowledgeable of the local property market. If you can achieve this you are unlikely to run into problems when buying in Spain (though you should always employ an independent lawyer as well).

As has been said several times before, there are many decent and professional property agents in Spain. The problem, of course, lies in distinguishing them from the large number of unprofessional, incompetent or unscrupulous ones. All property agents in Spain make the same claims about their superior service, and some of the worst companies have the biggest marketing budgets, which they use to sing their own praises louder than the rest. Few buyers will have previous experience of property agents in Spain, meaning that buyers have to take decisions on the strength of little useful information.

Probably the best way to find good Spanish property agents (and steer clear of bad ones) is through recommendations from friends and acquaintances that have had dealings with agents. The more people use recommendations, the more companies are forced to pay attention to building good reputations, which means doing right by their clients.