The real estate agent is a commercial service provider and this profession is not ´protected´ in Spain. So, make sure that you´re dealing with a professional company, preferably by objective referrals. Don´t sign any exclusivity contract and better not let yourself be pushed by ´other potential buyers´.
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Own buying real estate agent
A good real estate agent has broad experience and knows the market, the surroundings and the potential properties perfectly. It´s best to just chose 1 agent with whom you feel comfortable and don´t just look at the houses on this website. If he doesn´t have the house in his own database, he namely can show you any potential property on the market (the internet). Just not if you already sent an inquiry for a specific property to another (selling) real estate agent.
The commission of the agent
Just to be clear: the sales commission of the agent can easily be a yearly income. So the stakes are high and the competition is ´killing´. The commission normally is 5% of the sales price of the property and this amount gets split if there´s 2 agents involved. So, the buyer´s agent and vendor´s agent. Be aware that the agent therefore prefers to sell a house for which he also represents the seller. The commission is paid by the seller (Malaga province).
Legal investigation job of lawyer
There are estate agents that offer you to do the legal investigation for free. Be smart and don´t fall for this, especially in the country side. The agent benefits from the sale and might lose his commission over a negative advice. So he´s not independent. In case of trouble you´ll lose way more that the 1% (+IVA/VAT) that the lawyer charges. Also gestors (accountants / administration offices) don´t have the specific knowledge to carry out the legal investigation. In Spain it concerns more than simple applying for the Nota Simple of the Land Registry and the Cadastre record.
The reservation contract
By the signing of the short reservation contract of the real estate agent the property will be taken off the market during the first part of the legal investigation. A verbal agreement is hard to prove so try to sign as soon as possible. You can always have it checked by your lawyer. For this he´ll already try to obtain the Nota Simple of the Land Registry plus the Cadastre information. A good reservation contract contains the following details:
- Personal data: Personal data like name, address and passport number of vendor and buyer (a fiscal NIE number isn´t necessary yet)
- Data of house: Details of the house according to the Nota Simple of the Land Registry (address, Registry and finca number) plus Cadastral reference
- Dates: Maximum date of singing of the private purchase contract and/or completion date
- Purchase price: Purchase price of the house (possibly with short specification for f.e. valuation of furniture or costs for the DAFO certificate in the countryside).
- Reservation fee: The paid reservation fee (mostly between € 3.000 and € 5.000) that will stay in the bank account of the agent/lawyer of the seller.
- Conditions reservation fee: The reservation fee the buyer will loose if he cancels the contract without valid reason. The contract should therefore also contain a condition that if the seller cancels the contract without a valid reason, he´ll need to pay back the reservation fee plus the same amount as a fine.
- Limiting conditions: Possible short specification for limiting conditions like ´subject to (positive) structural survey´, ´subject to own house sale´ or ´subject to mortgage´. This however is not common in Spain and it depends on the seller if he´ll accept.
Which rights does the reservation guarantee you?
So even if the seller finds a buyer that want to pay more, he´s officially bound to the contract. By law the price should be based on a correct inscribed property and you should get your reservation back if not. (Or you could still negotiate a price reduction as a compensation for legal handicaps.) Not all agents however are flexible with returning your money. Also there´s a grey area because this contract needs to signed fast and not all negotiations can be done before. (For this the private purchase contract is signed later.) In the end in Spain nobody goes to court for these kinds of amounts. Besides of this you of course won´t get the legal fees of your lawyer back. So the chose of a good agency with references is very important.
On the other hand just keep in mind that your ´only´ risk here is losing your reservation fee. A reservation after all isn´t a purchase yet.
Be aware that only the Spanish version is valid, not the English translation.
It´s advisable in this phase to already sign the Power of Attorney of the lawyer. This because this might be way more expensive and difficult to do back in your own country.
Furniture list and check before completion
Even though almost all houses in Spain are sold furnished, officially you only buy 4 walls and a roof. The vendor may take everything with him, including kitchen and electrical equipment. So, ask you agent to make a furniture and fittings list to add in the private purchase contract of the lawyer. If there are items of high worth, have them described in detail. Think of the luxurious American fridge that they replace by a car boot sale version. It doesn´t happen often, but I´ve seen it happen. In the law firm where I work I even experienced a cancelled purchase of € 800.000 over 4 design bar stools…
Instruct your agent in having an inspection of the house on the day before completion. He or she can then check the furniture list, general state (cleaning), active service contracts (electricity / water) and other particularities. By the way: having a furniture list doesn´t mean that the furniture is valuated separately in the Title Deeds of the notary.
Need a referral for a good estate agent in Andalusia? Or like to to receive an example offer for the legal investigation of a specialised and independent lawyer? Find out more through link above.
©2019, Ariane van Wijk