Save thousands buying property in Spain.
How to save thousands, no… tens of thousands buying property in Spain.
Are you paying too much for your dream Spanish home in the sun?
The game is rigged. Sorry to tell you like that but the rich are getting richer, the poor well, they are not getting richer. This applies to property investing, stocks, bonds and everything else.
We´ve seen controversy across the financial markets for the past 10 years or so- Banks are over charging their clients. Financial institutions who should be competitors are getting together to set artificially high costs. Governments are being sued for unfair taxes and charges, especially here in Spain.
The big loser is you and me- the Spanish property buyer.
Do you think that the Spanish property market is clean and fair and a level playing field? If you do think this, you are wrong. We here at SpanishHomes.online are a team of lawyers, financial experts, estate agents in Spain and the UK and we can assure you- if you buy your Spanish property from a high street shop, you are leaving thousands of euro on the table.
Is there really that much commission involved in Spanish Real Estate?
In the 6 first months of 2018, it is estimated that the average commission on property sales in Spain was just under 7%. Let’s say you purchase a property for 200,000 euro- that’s a commission of almost 14,000 euro, plus you´ve probably paid too much for your currency, your bank fees are too high, and I bet you didn’t even think to negotiate with your lawyer.
That’s bad news, and it gets worse.
Many agents receive more, much more in fact, than the 7% average.
Question- what difference does a % or two or three really make anyway?
Imagine if you will, you are a small to medium sized Spanish builder with a block of apartments and you are struggling to sell them- what do you do? One tactic is to hike the prices up and offer the foreign estate agents 10, 12 or 15% commissions. The agent has a decision- they can refuse and continue to sell the property with the smaller commission or they can take their unsuspecting clients to view this particular development and hit the client with the hard sell. If you know ten people who bought property in Spain, 5 of them were caught up with this trick and never knew. Maybe they still don’t know or want to know.
Let’s say they found a way to get a 50% reduction on their new build property. A 12.5 % commission on a 200,000-euro property means 25,000 commission- 50% cash back in the form of free legal work, free furniture, free property management, discounts on building work, pools etc. puts 12,500 into the clients pocket, or hopefully 12,500 euro into your pocket!
It’s worth repeating- Average commission on new build off plan property in Spain is a whopping 12.5%- you are paying too much.
Why is the game rigged? Let’s say you are a major investor or an estate agency. Do you think you pay the same amount of commission as the little guy? Absolutely not. The agents who buy here save 50% commission right from the get go.
The game is rigged in favour of (us) Spanish property agents. You´ve got no chance, or do you??
Three ways to not save money when buying a property in Spain.
1. Trusting a Spanish bank. Spanish banks are now the biggest owners of real estate in Spain. Once the world wide credit crisis hit in 2008, the projects the Spanish banks had funded could not get any outside buyers and the banks were left with hundreds of thousands of properties all across the country. Unfortunately, as bad as that was, the rest of the story was worse. The Spanish banks had borrowed the money to back up these developments from German and US banks, and suddenly they had no way to pay it. In stepped the Spanish government with a 40-billion-euro overdraft in order to save the Spanish banking system. Clients today are still paying for this, especially those who trust their Spanish bank to get them a deal on a repossession in Spain. The banks are charging too much as they told the Spanish government back in 2008 that their portfolio was worth more than it is. Confusing enough for you?
Spanish banks are even more desperate to get your money than the typical shifty estate agent.
2. Trusting a random agent without doing your homework.
Its easy to become an estate agent in Spain- too easy due to lack of regulation. The government mainly trusts foreign agents to self-police. It leaves the sector way open to fraudulent behaviour. You know the story about the Scorpion and the frog?
Long ago, a scorpion found himself on the river bank with no way to cross. Luckily, he spied a frog sunning himself on the rivers edge- “Mr Frog”, said the scorpion, “can you please carry me across the river”.
“What??” said the frog- “you are a scorpion. I cannot trust you, if I give you a ride across the river, you will sting me and I´ll die in the current”
“why would I do that?”, said the scorpion, “for if I do sting you, you´ll drown and I´ll surely drown too”.
“How do I know you won’t wait until we reach the other side then kill me” asked froggy.
“Because if you bring me across the river, I will be your friend as you did me a favour”.
The frog agreed and off they set. Half way across the frog felt a sudden pain in his neck- he had been stung.
“Why did you do that to me, we will surely both drown” he said with his dying words.
The scorpion shrugged- “Well” he sighed, “I can’t help myself, it’s in my nature. I´m a scorpion”.
The moral of the story- nobody, especially a scorpion will care about your money as much as you do!
3. Going direct to the builder.
Right up there in the list of terrible ways to save money includes going direct to the Spanish builder. The agent is his partner, his buddy, his source of leads and buyers. If you go to the developer, sure he´ll give you a token discount and still pay the agent who registered your name with him first. You pay too much, (even a terrible agent can get your free white goods or a furniture pack) and just as serious you´ll have no support as you don’t even have a bad agent, let alone a good one, when something goes wrong.
The best way, maybe the only effective way to save thousands when buying a property in Spain….
Become your own estate agent and save thousands.
SpanishHomes.Online is still offering our clients a free opportunity to “become an estate agent in Spain”. I´m not saying you need to sell houses, but if you want to save 10,000 or more, you can just sell a home to yourself! There is no maximum amount of deal you need to bring so what if you only bring yourself?
You can become an agent just for one deal and is so doing, you will save a small fortune.
Its all legit and above board- you get a contract saying any client you bring to us, you save 50% on the commission. We will receive say 20,000 in commissions and you have a legally binding contract saying that because you brought us the buyer, (you!) you get half the commission! 10,000 in your pocket is better than in anyone else’s pocket.
You get treated like a king by the builder- you are after all an estate agent bring buyers to him, plus you save thousands and thousands on buying your property in Spain.
• You can’t already be registered with the builder. If you already viewed the house through another agent, maybe think about buying it in your partners name or your kids name, anyone who is not registered.
• Check it all with your lawyer. We recommend you have a good lawyer oversee the process. Spain has an excellent reputation in this regard- solicitors are bound by European law and it is still a very respected profession. Some lawyers are slow and expensive- we can help you with finding one of the good ones.
• Use us for as many services as you can. There is no point is saving 10,000 on a new build property on the Costa Blanca if you immediately hand it back to the bank on a mortgage, currency conversion and insurance policy. Think I´m exaggerating? Spanish banks have shareholders and their aim is to increase profit, not worry about your costs. We can and will help, trust us.
• Talk to us as early in the process as you can.
• If when we save you a minimum of four figures, please post about your experience on your social media. This tells everyone two things- first you are smarter than most in that your dream home in Spain cost less than your neighbour plus you are happy to share your knowledge and experience- what a guy you are!!
Get in touch today and start saving money in Spain!