A good Spanish real estate agent can provide a valuable service to British 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.
The incentives of real estate agents in Spain
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.
© Mark Stucklin (Spanish Property Insight)