Buying in Spain
 

Hi all, long time member but been silent for last few years after selling up in Portugal back in 2019.
we are currently looking at a house on the Costa Tropical and have remotely viewed etc.
The estate agent is looking for a €1000 deposit (refundable) before putting our offer to the seller.
they claim it’s to weed out tyre kickers etc.
Is this usual practice in Spain?
Also, they have said the property gets temporarily removed from sale while our offer is being considered and negotiated.
Again, is this the usual procedure in Spain?
So unlike here where you have people bidding against each other and jacking up the price!
Thank you for any advice!

Re: Buying in Spain
 

Personally Ive never known agents take a deposit like this so id be wary about the T's and C's of it (Im not saying it never happens but not in my experience of several buys/sells over recent years) . Id also take with a pinch of salt them telling you its removed from sale, it could be on the market with other agents or someone could have viewed it previously and still come back with an offer. Until you have signed the pre sale contract and paid your 10% (usually) deposit, someone can still come along and make an offer. Once the pre sale is signed everyone is pretty much locked in.

Re: Buying in Spain
 

Not usual practice and the estate agent either passes on the offer or they leave it, but unfortunately there are a lot of ways to take your money in Spain.
Certainly not a good time to buy in Spain either if you look at the local wages and outlook. We live in the West of Ireland and only have a 2nd home in Spain, please make sure you have a good independent lawyer.

Re: Buying in Spain
 

It's a common practice. It's just a holding deposit to give the buyer time for due diligence before making the full, non-returnable 10% deposit. I am selling a property at the moment, and expect this to happen. I also have two friends currently selling, and both of them have taken holding deposits.

Re: Buying in Spain
 

Good way to blow away 1k. If survey or solicitor finds something that puts you off, you will never see that money.

Re: Buying in Spain
 

local wages not an issue for us, both highly skilled at what we do but we are at (early) retirement stage anyway.
Outlook for Spain is actually quite positive at the moment and one of the countries least affected by current global events (tariff threats etc).

Re: Buying in Spain
 

No:https://www.judicaregroup.com/site/b...-make-an-offer
Is it normal to pay money to make an offer on a property in Spain?

No, it is not normal in Spain to have to pay any money just to make an offer to the Seller. In fact, this is highly unusual. The fact that a number of agents in Spain might do this as standard practice does not make it the norm as far as buying a property in Spain is concerned. Even if it is “normal” to those agents. The vast majority of agents do not work in this way and this practice is very much an unusual way of proceeding.

Is it necessary to pay money to make an offer on a property in Spain?

No, there is no need to do this at all. The agent is perfectly capable of passing on an offer to the Seller without needing any payment at that stage.

Is it advisable to pay money to make an offer on a property in Spain?

No, it isn’t, and there can be various disadvantages to doing this.

• Once you (the Buyer) have paid the money you will lose a certain amount of control over the process. You and your lawyer will then be on the back foot all the way through the transaction as the agent and the Seller know that they will be able to dictate terms to you.
• The corresponding offer document is likely to contain things in it that you would ordinarily negotiate after searches on the property are carried out. Essentially you are setting out the backbone of the purchase contract at this stage, which is too early.
• The Seller will know that you are keen to purchase the property and may therefore increase the minimum amount that they are willing to accept.
• If the offer is not accepted and the agent goes bust before returning your offer, then you are likely to lose your money.
• If you are transferring Sterling to Euros and the money is returned to you in Sterling, you may end up with less money due to exchange rate losses and transfer charges. You may be fortunate and also end up with more but in the short term you are likely to lose out.
• If the agent and Seller are going to insist on this then you can imagine how difficult they are going to be throughout the rest of the transaction.

So why do some agents do this?

There can be several reasons for agents to ask for payment just to make an offer on a property.

• The reason given to you by the agent can actually sound quite persuasive – “The Seller will take your offer more seriously if you have paid something already”. However, a good agent will be able to check that you are serious without having to pay anything at this stage. They can make a judgement call based on the way that you act and the questions that you ask. That should be part of their skill as an estate agent. In extreme cases they can ask for some proof that you can afford the property and that you are indeed serious.
• A reason however that you won’t be told about, is that this gets you “committed” to the purchase as soon as possible. The “offer” will normally come with a document of some sort which will set out the offer and will probably include things that are normally negotiated between the lawyers after the offer is accepted. If you commit to those points at this early stage, then it makes negotiating later more difficult, which is of course advantageous to the Seller and their agent.
• It also means that they have your money, which gives them a certain amount of control over you. Even if that money is deemed “refundable” and you don’t proceed with the purchase, it is likely they will hold onto it until you have chosen another property in their portfolio. The result is you will feel invested with that agency and are much less likely to go and find a property with somebody else if your offer is not accepted.

In complicated negotiations where there has been a lot of discussion and the Seller needs to be “persuaded” then there might be an argument to say that this can help, but this is going to be very rare, and the agent should be able to have the same effect in other ways.

Re: Buying in Spain
 

That's what I mean, for you no problem coming from one of the wealthiest parts of Europe but one should always look at local wages and local demand. Outlook is not good, on paper it looks good at the moment but Spain is a year behind other countries so everything that happens in Germany, France arrives in Spain a year later. Of course it won't affect you but just saying in general.

Re: Buying in Spain
 

No, it is not normal to pay a deposit just to make an offer. The situation I am talking about is when an offer has been made and accepted by the seller. The buyer basically needs time to complete all the inevitable legal searches etc, but asks that the seller does not continue to market the property for a short period. Thats not quite the same thing.

Re: Buying in Spain
 

Ok, but that wasn't the question he asked.

Re: Buying in Spain
 

OK, it was in 2004 when we bought in Spain, but, having decided on the property we paid a deposit of €6000, we were told this deposit would ensure that the property was ours, and that if we decided not to go ahead that is what we would lose, but if the sellers decided to withdraw then it would be returned to us. Now that was when we were in the EU and things may have changed but we were happy to pay that deposit, which reduced the amount still to pay by that amount as well.

Re: Buying in Spain
 

Still the same and on some contracts there is a clause that says if the seller pulls out they pay twice the deposit back
Its usually 10% and for us thats what the purchase tax is in our community.

None of the agents we contacted (and we are still in contact with a couple) would ever think of asking for a upfront fee.
If we had ever been asked for one I would have refused (but we looked in person) so it was never mentioned.
To be honest I think anyone is asking for trouble to only view remotely, go visit the place. Buying a house even in your own country is a massive commitment, buying one in a foreign country and not looking at it is a folly. How do you know that its not next to a motorway, is that bit of land over there going to be a 40 floor hotel???

Sorry for saying this to the OP but you are foolish if you pay this 'refundable' deposit to someone you have not talked to face to face.
How do you even know that they are acting for the seller?? They certainly are not acting for you (none of them do) all they want is their commission.
We have friends who are Estate agents and they are honest, but I still didnt use the solicitor they suggested but went and got my own when we purchased in 2019 (My FIL had known this couple and their business partner for 15 years and I still took advice from another source).

Re: Buying in Spain
 

Who holds the money and what are the terms ? ie if the seller does his due diligence and finds something they don’t like do they get their deposit back ?

Re: Buying in Spain
 

Correct !