When it comes to British buyers, estate agents play a key role and have the lion’s share of the market. However they are not the only companies involved in selling property in Spain. Here we will look at some of the other companies that you may come across when buying property in Spain.
Internet property portals are companies that manage an online database of properties from many different agents. Agents can list any number of their properties for a fee, and the portal’s job is to attract buyers to the site, usually by ranking well with the search engines. Users can view properties for sale and contact the selling agents via the portal. Spanish property portals are almost impossible to avoid when searching for property online as they specialise in ranking highly with most search terms related to Spanish property. They are useful tools for researching the property market but they suffer from out of date properties are. This is because estate agents regularly fail to update the properties they list with the portals, as they do in many cases with the properties they list at their own websites. Note that some agents will list attractive and well-priced properties that they don’t have for sale in order to capture the contact details of potential clients.
Search & find
There are a growing number of British-run search & find companies operating in Spain.
Search & find companies are not estate agents and do not have a portfolio of properties to sell (with the odd exception). Instead they search, on behalf of their clients, the properties offered by a number of local estate agents. They arrange a shortlist of properties for their clients to view, and if a sale is made they receive a part of the estate agent’s commission in return, which is how they earn a living. They will usually charge their clients an upfront fee of something like 500 Pounds to start a search and to cover the costs of unsuccessful searches. However they normally refund this fee to clients who end up buying through them.
All of which means that they have to reach a commission-sharing agreement with local estate agents, as without this they cannot earn a living. Most agents value the fact that they introduce serious clients (only serious clients will be prepared to pay the upfront fee) and will be prepared to share commissions with them. However some agents may not cooperate, which can limit the range of properties that search & find companies can offer to their clients. It is important that search & find companies work with many different local estate agents if they are to be of value to their clients. Otherwise they become no more than an extension of the sales department of a few local agents, but under the pretence of offering clients a wide choice of properties from many agents. There is also a risk that estate agents will simply increase the commission in order to pay the search & find company, driving up the cost for buyers.
A search & find company should take a detailed brief from a client and then search all the local estate agents they have agreements with to produce a shortlist of properties for the client to view. This should save the client time and money that would otherwise be spent dealing with many different agents and visiting inappropriate properties. However these advantages will only be realised if the brief is clear and the search & find consultant is competent. Consultants can fail to understand their clients requirements and tastes, and do too little to search the market, neither of which benefit the client. It is very easy to set up as a self-styled search & find consultant so buyers should always ask for references and find out a bit about these companies before using them. Many British people with no relevant experience have set up as search & find agents but in reality do little more than introduce buyers to estate agents. The likely result is higher commissions and greater costs for buyers with no real advantage. One should also bear in mind that, unlike buyer’s agents who are paid by and work exclusively for the client, search & find companies earn their money from estate agent’s commissions, which can give them incentives that don’t coincide with those of their clients.
Buyer’s agents are paid by and work exclusively for buyers. They search for properties on behalf of their clients, but unlike search & find companies they do not receive any commission from estate agents and so are not limited by commission sharing agreements. They are also free to search properties from private sellers, which is a big advantage in a country like Spain, where many Spaniards, especially in rural areas, avoid selling through estate agents. This means that buyer’s agents have access to a wider selection of properties than anyone else.
Buyer’s agents will charge their clients a successful search fee, typically around 2.5% of the value of the property that the client buys. They will also charge an upfront fee to ensure that clients are serious and to contribute to the costs of unsuccessful searches. The transparency of their fees is a big advantage to clients, as in all other cases the buyer never knows how much of the cost is being paid in fees.
Some people are tempted to see the fee that buyer’s agents charge as an extra cost. However in reality a buyer’s agent is more likely to drive down the overall cost of the purchase whilst significantly increasing the buyer’s chances of finding the property best suited to them. Buyer’s agents don’t have to fight for a hidden commission built into the sales price, which frees them to help clients negotiate the lowest price possible for the property. They can also give genuinely unbiased advice to their clients, and are likely to have more knowledge of the local property market than anyone else.
Unlike most search & find companies buyer’s agents will visit all potential properties on behalf of their clients, taking notes and photos for the clients to review. This saves the client considerable time and money whilst ensuring that a comprehensive search is carried out that includes a physical inspection of all potential properties. Clients can visit a shortlist of properties in the knowledge that all other possibilities have been inspected and rejected.
Buyer’s agents will also help their clients through the entire purchase process and beyond. They often help with or even conduct negotiations on the client’s behalf, and their experience of the property market is a great asset in this process. They can arrange and manage all the practical matters of the convenyancing process and can be trusted to recommend good lawyers. All told they offer a valuable solution that can minimises the costs, risks and headaches of buying in Spain. Unfortunately there are very few genuine buyer’s agents operating in Spain. Contact details of good buyer’s agents can be found at the website.
There are many people sitting on bar stools on the costas try to make a living as ‘introducers’. They befriend potential buyers out visiting and then introduce them to estate agents. In return they expect to receive a part of the estate agent’s commission if the client ends up buying a property.
Introducers claim to know who the ‘trustworthy’ agents are, which is why most people go along with their proposals. However one has to bear in mind that in many cases their claims are spurious and they have no interest other than to earn the highest commission possible for the minimum effort. They are more likely to recommend aggressive agents that charge high commissions or that increase the commission to pay the introducer. Anyone thinking of buying in Spain should seek out recommendations from friends and acquaintances but should avoid being ‘introduced’ to estate agents or developers by strangers.
© Mark Stucklin (Spanish Property Insight)