Learn the Dangers Behind Buying a Property in Spain That Many Estate Agents Try Their Hardest To Hide
Before reading on, you need to know what the aim of this site is – we want to protect you as a potential buyer of property in Spain.
Some people are natural risk takers, and are prepared to take the chance of losing their life savings and the possibility of seeing their dream home bulldozed by gambling on the chance of saving a few grand during the buying process. If you are one of these individuals, you are not likely to find anything useful on this page. Reading on would only be a waste of your time, but we wish you the best of luck with your property purchases anyway.
However, if you are deadly serious about protecting your hard-earned money, having a beautiful home in the sun where you will live or vacation, and realize you simply cannot rely on luck when it comes to making an important life-changing decision such as buying a property, then you will find the information provided here of extreme value.
THE PROBLEM WITH BUYING A HOME IN SPAIN, IS IT BECAME A DESIRE FOR TOO MANY PEOPLE.
I will explain further –
There is no place on this planet where you can live that affords the advantages Spain offers. Life in the UK and other North European countries is often little more than a rat race – a never ending cycle of commuting, working in a stressful unnatural environment, arriving home late at night to eat a microwaved meal because you are too shattered to prepare anything else, and all this against a backdrop of rain, threatening grey skies, and unfriendly temperatures. Moving to Spain allows people to live an unhurried lifestyle, work in a happy holiday like atmosphere, and enjoy an idyllic climate that allows for plenty of healthy outdoor activities and minimal heating bills. We know many people that appear to lose years from their appearance after moving to Spain due to reduced stress levels and thanks to the relaxed and healthy way of life.
Moving to Spain is not a trend that appeals only to retired couples or those who have a dream of owning a bar in Spain. There are many young singles, families with small children, and even those of working age with good jobs in the UK who are recognizing their quality of life could improve greatly by moving to one of the many attractive resort towns or a city in Spain. With the huge advantage we have these days of being able to work virtually; age and working status are no longer such a consideration when it comes to making a decision where we would most like to live. Combined with the fact that as member of an EU country we have the same rights to work in Spain as a Spaniard, it is little wonder that retirees are not the only demographic of the population who are considering moving to Spain.
Perhaps you are now wondering “If moving to Spain has so many advantages and few disadvantages, how is it that buying a property in the country turned into a nightmare for so many expats?”
The problem of people suffering severe financial losses and their new homes when buying properties in Spain actually has nothing to do with the country or the dream in itself – hundreds of thousands of expats have moved to the country since the late sixties who have nothing but praise for their adopted country and have never regretted making the move even for a minute. Spain has been the most popular country for relocation among Europeans and Americans for decades. But this is the paradox…
SPAIN’S HUGE POPULARITY AS AN EXPAT DESTINATION AND THE GREAT DEMAND FOR PROPERTY FOR SALE IN SPAIN IS WHAT CAUSED THE PROBLEM.
As Brits, French and German citizens travelled to Spain as holidaymakers and realised they would be happier living there than in their home countries, estate agents and property developers were able to generate healthy incomes from selling dream villas and apartments to accommodate the newcomers. In fact, there was so much demand; those in the property and constructions trades were barely able to supply the demand. Seeing how well others were doing selling real estate led to an uncontrolled contingent of real estate peddlers infiltrating the industry.
So who are these “Spanish real estate peddlers?”
Anyone, really. Salesmen who had previously only sold insurance or used cars, timeshare sellers who found themselves out of work when that concept collapsed, construction workers who saw how well their bosses were doing developing properties who decided to get in on the act, restaurant owners who turned their existing premises from an eatery to an agency as it meant more sociable hours and less work for more returns…just about anyone.
As you can imagine, buying a property with the assistance of someone who is used to extolling the virtues of a clapped out van that he knows is unlikely to last more than 200 kilometres to an unsuspecting buyer is not likely to end well.
It doesn’t take an expert to see how some of the following sad scenarios arose:
- Properties were built without permits
- Properties were built on land that developers didn’t even own
- Homes were sold to the unsuspecting that had serious structural issues
- Agents sold properties without the required legal documents
- Conmen posing as agents and developers disappeared with deposits and down payments
The havoc caused by the lack of control within the Spanish real estate industry got so bad that genuine experienced professionals decided they no longer wanted to be associated with a profession that had such a bad name and they got out. This of course led to even more gains for the rookies and more bad press for Spanish property sales in the UK. Things came to a head and the game ended with a bang for thousands of property developers and agents in Spain when the property market completely crashed in 2008/9.
While the property cowboys cannot be blamed entirely for the detonation of the Spanish property market and economic crisis that occurred in 2009, they do have an awful lot to answer for. Corrupt property deals led to many foreigners turning to other countries to purchase a second home, and the terrible economy meant that due to a lack of local jobs, many people decided to stay put in their home countries rather than looking for work in a country that had an alarmingly high unemployment rate and could offer very little hope for new expats seeking work.
But while the economic crisis was devastating for large sections of the population living in Spain, can it have been a blessing in disguise for property purchasers?
The good news is the economic crisis, and above all the crash in the property market has finally led to the Spanish government waking up and dealing with some of the problems that helped contribute to the crash.
Incentives are in place to make moving to Spain a desirable proposition for foreign buyers, with paperwork being much less complicated to obtain, and opening a small business such as a shop or registering as self-employed is cheaper and the process streamlined to make it easier.
The Junta of Andalucía is taking steps to legalise the 300,000 plus illegal properties located within Andalucia, a large percentage of them in resort towns on the Costa de Sol. This will allow the owners of these illegal properties the entitlement to provisions of water and electricity. The property owners will also be able to register their homes in the land registry.
However, since the Spanish government deregulated the property market in 2000, allowing anyone to become an estate agent without any form of training, nothing has improved with regards to those who can intermediate in property transactions. Many agents still operate without understanding the Spanish conveyance process, and buyers continue to suffer the consequence of incompetent estate agents and fraudsters.
It is crucial you avoid unscrupulous agents when purchasing a Spanish property. When hearing the stories of buyers who have had their dreams of living in a luxury villa beside the Mediterranean Sea turn into a nightmare, it is almost always possible to track back the events that led to this terrible situation to the incompetence or fraudulent actions of an agent or developer. The good news is there are agents who have done their homework with regards to legal proceedings and are ethical and honest, but the challenge is finding them when you are on unfamiliar ground. A trusted property finder can help you with your search.
An experienced agent who acts in an honest professional manner at all times is priceless if you are a buyer making your first property purchase in Spain. The right agent will allow you to access a wide range of properties available from multiple vendors, and you will also have the enormous advantage of the agent’s knowledge of the area and local property market. In addition, if you do not speak Spanish, a bilingual estate agent will be invaluable during the buying process.
When deciding if an estate agent is an ethical qualified professional to work with, and actually qualified to sell property in Spain, the following seven points should always be considered:
- The agent should be mature and speak Spanish well. If you find yourself dealing with a young person who is barely out of their teens who can only speak a few phrases of Spanish, you can be sure you are dealing with someone who has been employed by a “Costa Cowboy” and recruited from the UK with promises of large commissions. Avoid.
- The agent must be able to demonstrate experience and extensive knowledge of the local real estate market. They should have lived in the area for a very minimum of 5 years. It is optimal to buy from an agent who has an office in the town where you want to purchase.
- Your individual needs and requirements should be heard and discussed in depth. All queries should be answered fully. If an agent does not appear to be interested in your circumstances or desires, look elsewhere.
- An agent must be honest and realistic about what you can expect to find for your budget, and show you a choice of properties on their books that are within your price range. Beware of agents that show you unattractive properties that are highly priced then take you to a mediocre property albeit more attractive than the previous ones he showed you that is priced lower. This is a trick agents often use to make second-rate properties appear more appealing than they actually are.
- When selling a resale property, the agent should have all necessary documents such as a copy of the deeds and the land registry entry on file. They should be able to give you full information on community charges and town hall rates for each home you are interested in. If you wish to buy a new property, plans, example contracts and a copy of the building license should be provided.
- A good agent will be truthful and even cautious when discussing the amount of money you can expect to earn from renting the property out. He should never tone down the cost of owning or purchasing a property. They should also be open about the commission they will earn in the event you buy a property.
- You should not feel pressurized at any moment during the buying process. Agents may tell you another buyer is about to put a down payment on a property, or that the price is about to go up to force you into making a quick decision. Don’t be coerced into signing anything until you are absolutely sure the property is the right one for you.
To further help you select a professional, honest and ethical estate agent in Spain, we will list a selection of trusted agents on this site. These agents have been hand-picked after we have personally visited their offices and can guarantee they will offer you a service as described in the aforementioned list of proficiency an agent must possess.
Wishing you great happiness in your new home in the sun!
If you have comments or questions about this article or any agent listed on the site, I want to hear from you! Drop me a line at firstname.lastname@example.org.