A decade ago, the Spanish housing market was characterised by amateurish property developers and estate agents. Easy loans, rising house prices and reprehensible practices allowed these companies to flourish. In other words, it was easy to make money, which helped fuel the property bubble. The situation today is different, but there are still cowboys on the market.
Harder access to the Spanish housing market
Because banks now apply stricter criteria to lend money to property developers - by definition a capital-intensive business - beginners and amateurs find it harder to get financing. In addition, at least a track-record is now expected. Amateur developers are also less likely to find partners, which does not help sales. Entry into the profession is thus limited by market conditions.
This does not mean that all problems have been solved. In practice, for example, we find that property developers - although legally required - often do not provide a bank guarantee for buyers on plan.
Update 2021: Meanwhile, the cowboys among promoters are back on the scene.
Not so for real estate agents
Unlike property developers, start-up costs for estate agents are low. Also, virtually anyone can become an estate agent in Spain. After all, there is little to no regulation of the Spanish housing market.
Moreover, the real estate broker's responsibility is limited to finding a counterparty. From the moment an agreement is reached between buyer and seller thanks to the broker's mediation, his task ends. He is no longer responsible for the further outcome of the transaction.
This, of course, is not to the client's advantage. After all, it is not uncommon for Spanish estate agents to be out for easy money, regardless of the consequences for the customer. The cowboys So do still exist.
The notary offers no security
The duties of a Spanish notary are in no way comparable to those of a Belgian notary. Know that the notary in Spain performs virtually no investigations or checks on the property. So working with independent professionals is definitely a must.
Read more about the duties of the Spanish notary.
Buy through professional brokers
Therefore, we advise clients not to go with just any real estate agent. First of all, look for estate agents that have been around for at least a number of years. Also look at the workforce. Does the real estate agency employ permanent staff or do they work exclusively with freelancers? We often find that freelancers do put more pressure on the client.
In addition, it is important that the real estate agent himself suggests that you work with an independent lawyer or legal expert of your choice. Some real estate agencies employ their own lawyer or work with a gestor or insurance broker. Obviously, a conflict of interest may then arise.
Read more about buying safely in Spain.
Decision
If you are looking for a property in Spain, know that the Spanish housing market is unregulated. Therefore, you would do well to buy through professional estate agents. Based on our experience, we can recommend a number of real estate agencies in each region.
Do you have questions about buying in Spain? Confianz organises free information sessions.
