Buying a property in Spain?
Beware of fraud!
Recently a Belgian court convicted a self-appointed Dutch female real estate agent for swindling people out of their savings by taking advance payments for properties she was “selling” to multiple people. Some of the properties were not even for sale and in at least one case, the agent cashed in the full (although unreasonably low) buying sum. The sad fact of the matter is that these ‘buyers’ are unlikely to ever get their money back.
So, if you are thinking of buying a property in Spain, does this automatically mean that you are walking into a potential minefield? The answer is a definite “No”, according to Caroline Trahé or Dirk Jacobs of Z-Yachting & Golf Estates, one of the leading and most highly respected realtors on the Spanish Costa Blanca. Their advice? Take adequate precautions to avoid fraudsters. Where substantial sums of money are involved, there will always be sharks circling. They exist everywhere all the more in a foreign country!
Unlike in many other European countries, the real estate business in Spain is not regulated, and notaries play a far less significant role. Whereas in many other European countries the notary will be responsible for checking all the deeds, validity of any legal documents, guarantees, building permits, outstanding loans, etc. on the property, in Spain the notary merely confirms the agreement between seller and buyer. As a consequence, you have to pay particular attention to a number of aspects of the purchase. As an example, if you buy a property which has an undisclosed loan secured on it, you will also be buying the loan and will become responsible for repaying it.
How to buy peace of mind
The alternative and best advice that Caroline and Dirk will give you is to employ the services of a reputable and experienced lawyer who specialises in property transactions. When investing so much money in the purchase of a new property, trying to save money on additional fees related to the purchase is a false economy. Additionally, don’t be fooled when someone tells you that it is a brand-new property and you don’t need a lawyer. When you buy your property in Spain you also want to buy peace of mind and guaranteed security, which you can’t get without using a respected lawyer.
In most cases, property is bought through a real estate agent. A good one knows the area well, knows the local market and current property values. However, because this profession is unregulated, how do you know if the agent you are dealing with, is genuine and honest? The answer is to work with one who is well established, is respected, and comes recommended, independently, by people in the area.
But how to know if the agent you are dealing with is worth your confidence? Remember the horror story that inspired this article…
Caroline of Z-Yachting & Golf Estates states with indignation, that many people travel around the area, pretending to be real estate agents.
The truth of the matter is that trying to sell property is more likely just a side-line and not often their full-time occupation. However, by the way they talk to you, you would think that they were genuine real estate agents. Many of them may merely work in an ancillary property-related business, such as maintenance and repairs, or property rental, but they may have nothing to do with property whatsoever and are just looking to make some money on the side.
One place you may meet one of these so-called brokers is in a bar. They may detect your foreign accent, engage you in conversation and when they learn you are looking to buy a property in the region, they will happily tell you they can help. These people don’t have an office and usually can only be contacted on their mobile phone. Some have unprofessional websites where they make numerous false claims in an attempt to appear legitimate. You will see comments like ‘with over 15 years’ experience’, yet that experience is not related to property and they know as much about the property market as you, a tourist, does. Their website may refer to ‘one of our estate agents’ or ‘one of our real estate advisors’ to give the impression it is a large business when, in reality, there is only one person. Finally, and most frustrating of all, these people are really hard to get hold of at times when you need to speak to them.
This way of operating is not transparant. It is not fair and you can ask yourself how fair you will be treated throughout the rest of the buying process.
Avoid most of these pitfalls and traps:
- If you meet anyone who says they work for a real estate company, or that they are an estate agent, ask them for details of their website. If they don’t have one, then they will not be legitimate. If they say the website is ‘down’ because it is being updated, don’t believe them.
- If they do have a website, don’t be fooled just because there are some properties for sale. There is a good chance they are not for sale and are just on the website ‘for show’.
- Check that there is more than a mobile telephone number.
- Check that there is an office address and visit the office to make sure it is not just a ‘mail box’ service.
- A legitimate realtor or estate agent will have nothing to hide, so their website should include their personal details, such as their full name, and also include a photograph of them. If such information is lacking, chances are the person you are dealing with is not legitimate.
- Today, many businesses are rated by their users on a number of sites, such as Trustpilot, Google, etc. Do your research. In addition, many realtor’s websites have testimonials from customers and clients. Don’t be afraid to ask if you can speak to some people who have used their services, for verification of the real facts.
- The person you deal with should behave and act in a professional manner at all times. They should have full printed particulars of any property or provide a genuine reason why they are not available. When it comes to making an offer, once again there should be official documentation, and when you make a bid, it should be very clear exactly what is included in the sale. If the person you are dealing with wants to do everything ‘verbally’ then this should set off alarm bells.
- If documentation is provided only in Spanish, ask for a copy in your native language. If you do not feel comfortable with this, you can also let the translation be checked.
- When making a bid, make sure to have in writing what you are buying and under which conditions. Do not make a bid based solely on what the agent tells you.
- Don’t be afraid to ask questions. When buying a property in your home country, it is likely you will have many questions to ask. You should be asking the same questions, especially in a foreign country.
- Of greatest importance, never pay for anything, if you do not get a solid and concise contract with the guarantees you need as a buyer.
Furthermore you should only be expected to pay in full when you are signing the deed at the notary, whether you buy a newbuild property or a resale.
- Never accept to buy a newbuild property without a bank guarantee.
If you stick to these guidelines you should be able to avoid all the usual traps and pitfalls that exist.
Have you already decided on a property, but you are not yet confident about certain issues or you still have questions that lack an answer? Do contact Z-Yachting & Golf-Estates (www.realestateagentspain.com or +34 630 764 450) and they will be happy to help you.