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I’m an agent on the Costa del Sol, and I’d consider 3% a lovely commission to earn. Why aren’t the buyers and vendors beating my door down? Allow me to explain:
In the UK people will go to an agent who has offices usually not more than a couple of miles from the area they are looking to buy in – whereas most people looking to buy on the Costa del Sol will find an agent on the internet and have little idea of the actual area they want to buy in.
This means most deals involve 2 agents, one who has the buyer and one who has the property for sale. Now while I may be chuffed with 3%, and even consider 1.5% a nice earner (I just cast my mind back to how much cement I used to have to knock up to earn a grand), other agents do not. There are some, mostly other small and low overhead outfits – but anyone with a nice office and a marketing campaign will not accept anything less than 2.5% on an split deal.
This means that unless I am fortunate enough to have a property listed myself that suits, I will have to do a split deal making the minimum commission 4% or even 5%. If I use 3% as a hook in my advertising other agents will stop ringing me to offer split deals.
I could, of course, spend tens of thousands a month on a monster marketing campaign under a big 3% banner if I want the buyers beating my door down, but then I will need to get listed several thousand properties up and down the coast to sell to them all. Tricky, as other agents won’t do split deals for less than 2.5%.
The vendors won’t beat my door down whatever I do. Most are uninterested in anything other than how much money they will walk with if I sell their property. 95% are unwilling even to give the property a coat of paint to help it sell.
As a small agent, there is little I can do. What’s needed is for one of the big boys – those with say over 1000 listings and more than 4 offices – to start the ball rolling. However, this is unlikely as most of those work on 7.5% commissions and do very nicely out of it, thankyou.
Mark is quite correct when he says you should come right out with it and ask the agent how much commission he’s making. Get the bugger to put it in writing, too! I’ve been asked this, and even when it’s 4% the clients often baulk and say “How much?”. I don’t mind, they are quite welcome to go find someone who charges less – they’re usually back onto me within a couple of days.
Some clients complain that the commission should be 1.5%, like in the UK. There are, however, much more work and many more pitfalls involved in your average deal here compared to back home. Here we have agents, buyers and vendors working in different languages. We have mostly split deals as I mentioned above. We have the Spanish bureaucracy and taxman to deal with. Also, advertising and marketing here is outrageously expensive and almost useless.
In summary, look for those charging 3 to 5%. There are some, and it’s usually a fair price for the work invested by the agent in the deal.