October 1st, 2013

In Spain, many estate agents offer a
high quality, professional service at a fair cost. But (as is also the case in
many other countries), since professional accreditation in Spain is voluntary,
there are many less reputable operators in the real estate sector; and a quick
scan of postings on the internet predictably confirms many ‘horror stories’.

Reasons for problems in estate agent
appointments include:

• A lack of clarity at the outset on
target sale price and charging structure.
• A demand for an excessive commission (bearing in mind that officially
recommended commission levels are generally 3-5% plus IVA).
• An agreement that the estate agent receives money from a buyer/ holds money
for the seller. Funds should always pass under the responsibility of a
professionally regulated lawyer; and should only go to the credit of a
designated client bank account.
• An estate agent offering to secure a fixed price for the seller, but
receiving commission instead, from the buyer. That can mean the estate agent
(and not the seller) keeps any amount secured for the property over and above
the figure stated. Instead, the estate agent should always be appointed as the
agent of the seller; and be paid an agreed percentage (or fixed fee) by the
seller, which accords with official guidelines.
• Where an estate agent says that independent legal advice is unnecessary; or
recommends the use of the estate agents’ own lawyer. This does not guarantee
best impartial professional advice; but instead creates a real risk of conflict
of interests.
• Exclusivity generally; and automatic extension of an exclusivity period.
• Failure to secure confirmation of any of the points listed at the end of this

A client of ours who is an elderly
widow, asked us to address this subject. Unfortunately she had consulted us
only after being persuaded to sign (incredibly) a legally binding automatically
renewable exclusive term contract with a city centre estate agent in Spain,
which effectively guaranteeing a minumum property sale commission of 21% plus

By way of a contrast, having
consulted one of the principal (voluntary) professional bodies in Spain (the
Colegio Oficial de Agentes de la Propiedad Inmobiliaria); their recommended fee
scale for a property sale in an equivalent case is usually in the range of 3-5%
plus IVA.

So, whilst clients are best
protected by appointing an estate agent who is officially an ‘Agente de
Propiedad Inmobiliaria’ (or proven current member of equivalent professional
body or association); the points you should check with an estate agent in Spain
before appointing them include:

• Proof of relevant official
professional qualification by a nationally recognised academic/ professional
• Confirmation of professional regulation and complaints procedures.
• Certification of current valid professional indemnity insurance, to provide
cover in the event of negligence.
• Demonstration of experience and knowledge of the market generally, in order
to be able to provide reliable advice, so as best to protect clients’
• Demonstration of detailed knowledge of the title to the property in question;
and its local and regional planning law status.
• Confirmation of willingness to work alongside and cooperate with other
professionals (e.g. lawyers) involved in the transaction in question.
• A clear explanation of the nature and extent of the service to be provided-
in writing; in a form approved by your lawyer; in your own language; and signed
as agreed. The terms must include full details of all applicable charges.