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Yesterday I assisted a client selling his property in Elviria at the notary. The selling price was 350.000 € and my client received 219.000 €, I am not very good at mathematics but the commission is 31.000 €. That is , I think 14,15 % commission.
I don’t think I need to add anything else to this subject,
Well, yes, there is something else:
The agent was……..english
The buyer was……..english
The seller was………englishDo we need in Spain a new generation of english people selling, buying and doing business to make things more sensible ?. come on english community in Spain !!!
Finally, the agent ( I know Mark , you don’t let me say the name) is the famous Agency/ Developer based in Elviria who has built illegal complexes there. The forum users know whom I am talking about.
They have swindled many buyers with the illegal constructions , but also they are swindling sellers and buyers with their agent’s commissions.No more comments, I think.
Jose Maria Sánchez Alfonso
Abogado / Lawyer
Costa del Sol. Málaga
jmsalfonso@inicia.es -
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I don’t understand your figures, if commission earned was 31000 then thats less than 10%. normal rates on all the coast are 5% or 7.5% if you add it to the IN network. Then there is 17% IVA This is normal for Spain and if anyone can find one for less (not one without an office, sat in a bar) Please let everyone have the details.
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Actually – the commission which this Developer pays to Agents who bring in clients is 9%. Doesn’t take too many sales to make a comfortable living. This is one reason why several agents, large and small, focus on this developer’s projects. Many of the sales people (and I use the term very losely) selling property there have never made 31k in a year, let alone in one deal.
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The agent works for a big developer who has built largely in Elviria, some of the buildings are illegal as mentioned previously, still they act (with english agents ) in that area selling properties as estate agent ( not only the properties they buit). I don’t think they are irish, not sure.
Even if the commission is not 14% ( I still thik it is ) but 9%, I consider it abusive.
I think that both sellers and buyers should ( in this web site it is recomended to do so) deal the commssion with the agent, don’t just accept what the agent is adding on top ( for the seller) or which commission is included in the price ( buyer ).
That practice is absurd and abusive. It is taking also to an increase in the prices unnecessarily, also it makes agents gridy for easy money and feeling that they don’t need to be proffesionals to earn money.
Jose Maria Sánchez Alfonso
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Two points
Firstly that as the vendors lawyer surely you know every single cost involved, is that not your job? Hence the ambiguity in your figures is strange, you should know exactly how much the agent received in commission? I know any lawyer acting for the vendor I have met does? Apologies if you deliberatley intended to make it such, but it strikes me as odd.
Secondly, I think this point has been raised before as an agent I know the costs invloved in looking after and getting clients over and even at 9% which is good, it is by know means abusive. Advertising, offices and staff cost alot and the gross profit on most sales is significantly less than you all may believe.
The only worrying matter here on the CDS is the rogue agents miss selling to naive clients and lawyers not giving good advice. Eradicate these and you would see very few problems. Sadly it’s unlikely, as these guys thrive in this environment.
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9% is an outrageous commission. If you try to justify it by your overheads you’re having a laugh. Staff are almost all on commission only, and offices can be had cheaply. If you want a plush office in Banus or full colour spreads in the local and UK press then that’s you fighting for a larger share of clients in an overcrowded marketplace.
Now in most cases a competitive market drives prices down – not in this case though as that can be got around by keeping your prices secret and trying to ensure your client isn’t exposed to independent advice. The developers are guilty of the same thing, their reaction to the downturn in buyers being to raise the agents commission so the agents bring what clients they have to their door.
Then you complain about rogue agents? This is a wind-up, surely?
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In Spain we do have rogue agents and equally rogue lawyers and for that matter just about every other type of profession that all give their professions bad names.
I am an agent and have never charged more than 5% commission and in many instances have reduced this considerably to make sales happen.
I am transparent about my fees if a buyer asks I tell them.
The sales people working for me get a proper wage a car and fuel card and commission equal to what the commission only sales men get, this takes away the desperation seen with many of the rogue agents along the coast and gives a better service to our clients.
We do not charge for after sales service like Parador and cannot believe anyone can justify this, after sales service should be provided no matter what commission is charged and this ultimately is what the commission is for in the first place.
I stopped selling off plan properties two years ago because you didn’t need a crystal ball to see the problems stacking up.
Today we have over supply of over priced properties all back on the market at the same time and all looking for new owners before that ever looming date with the Notary.
Most of the people that bought these so called investments believed the sales pitch of the agents because it was what they wanted to hear big profits quick return etc.
I know many people who came to me 18 months ago and didn’t like what I said to them which was keep your money, don’t buy off plan or to buy a resale in a good location i.e. beach front that you can always sell on if need be, they then went on to buy off plan via other agents and today are the proud owners of an off plan investment that they soon have to complete on which was the one thing they never intended to do and in some cases don’t have the finances to complete.
I get emails or phone calls everyday from people who have been conned this way looking for someone, anyone to sell on their contract just to get their money back.
I had a very sad conversation from a lady a few months ago who had originally been looking for a holiday home of her own that was ready to move into,
after being qualified by the agent, no names mentioned she was given a nice trip along the coast in a nice clean BMW to view off plan investments and eventually talked into buying 3 not 1 or 2 but 3 off plan apartments, she was told that she would not need to complete on any and if she wanted the agent would sell 2 of the properties on within a year making enough profit to pay for the third, we all now the outcome and this lady cannot afford to make any more payments she just does not have enough money left.I could be sat on a nice big yacht somewhere in the Caribbean if I was a rogue agent, but I prefer to sleep at night and can honestly say I have never ripped anyone off, I and the sales people who work with me give our honest opinion of properties and developments with the buyer in mind.
I do work longer hours than most people I come across, but in return I make a good living and I am more than happy with my lot.
I do however get upset with all the flack given to estate agents in Spain because we truly are not all the same.
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Well obviously NONE of you have heard of the well established auction house based in Puerto Banus who only charge 2.5% commission and that is on the selling price. The selling price is an actual valuation of the property, not a listing where the agent asks the owner how much he wants for his property then adds their exorbitent commission on top. And yes, I am the owner of the aforesaid auction house.
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@Suprised wrote:
Call yourself lawyers and agents? the commission is nearer 7.5%
property 350000 @ 7.5% = 26250
IVA (VAT) @ 17% = 4462TOTAL 30712 (280 less than 31000)
Guys remember to take your calculator when you go to see your lawyer ❗
I havent heard of a 17% VAT … you surely mean 16% VAT ? We understood that Surprised from the onstart. It’s something else thats bugs me. Numbers don’t add up.
A 7.5% commission is almost the market standard in the CDS for any major REA.
What I fail to undertstand is why did the client only receive 219k if it sold off for 350k ??!! Am I missing a jigsaw piece ?
219 + 31 = 250.
350-250= 100k missing or what ? Shouldn’t the client receive 319k ? Or did Jose misspell a “2” for a “3” in the 219k he mentions …
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@Claire wrote:
I think he meant to say his client received €319,000.
Hmmm, yes that’s probably the figure he meant as James posted earlier on.
It’s hardly surprising a commission of 7.5%, I’ve seen commissions as steep as 15% and for rustic plots some even as high as 35% (although obviously the plot wasn’t worth a great deal).
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I notice the orginal poster of this thread had remained rather reticent to post again! It would be good to know the real story.
It seems to me the age old problem here will never change, people do not like paying for agents or middle men, their perception is of somebody that does very little for their money. Whether it be 1% or 10% somebody will always moan. The level of abuse is subjective. The property market here is complertley differnt to the UK, you only have to look at the US model and see that 5% is absolutley the norm and prices are generically much lower.
It is the sad fact that it’s the minority that are the rip off merchants and the majority of hard working REA that take the flack leaving the Spivs to waste their cash on flash cars and expensive meals and leave their punters high & dry.
The sooner this business gets some regulation the better! As an agent I would have no quarms in signing up to such a thing. We can live in hope. In the meantime, please remember there are plenty of good guys out here too!
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They would have negotiated a high rate with the developer because of their high sales (all the profile in UKetc) I wasn’t saying that 15% doesn’t exist just that in the one on this posting the figures are way out, I know the 2 would be a typing error but its obvious that it doesn’t even reach 10%. I would like to know why he didn’t have this figure before he got to the notary with his client, the lawyer I have used has always given me a complete breakdown days before including final fees etc.
At charges of 1% (or more!!) he could at least have liased with the buyers agent. 🙄
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Also – for whatever it is worth, when an agent quotes a commission rate, it does not include IVA. Just as when a lawyer quotes a 1% fee for his services, this does not include the IVA which must be paid on that as well.
So the commission is always more then the stated rate. This is something a good agent will make sure his client is aware of – all of the “extra” costs involved in buying and selling property.
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I certainly don’t know of any agents that actually ‘state their commission’ amount to clients. Agent’s commissions are already built into the price that the client pays. Whether that be a pre-negotiated commission rate with a developer for new-build or a percentage agreed with the vendor for a re-sale. People need to remember that the good agents in Spain earn their commission by marketing the properties on behalf of the private vendors and developers. Be it through advertising, exhibitions abroad or simply hard work on the telephone/computer.
Just my two cents..
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