The Coronavirus pandemic brought many changes to Spain, and one of those changes was the demographic of foreign buyers investing in property in the country. Whilst demand from British and German buyers have been as significant as ever, there has been a growing amount of interest in property in Spain from American house hunters.
Between June 2020 and September 2020, the highest foreign demand for Spanish coastal properties was from the United States. American nationals also topped property search charts for many regions in Spain’s interior including, but not limited to, Madrid, Salamanca and Segovia. This interest continued into 2021, with American nationals ranking as the fifth foreign nationals with the most interest in buying a home in Spain. And now that coronavirus travel restrictions between the two countries are largely lifted, American property hunters are in a position to turn their lockdown dreams and searches into a reality.
But how is property hunting in Spain different from property hunting in America? And how does the buying process differ? Here’s everything you need to know if you’re an American considering buying a property in Spain:
- Be Prepared for a Longer Wait
House sales are incredibly fast in the United States, with the average property transaction taking place in just three weeks. By contrast the average property purchase in Spain can take around five times longer, so if you fall in love with your dream Spanish home, be prepared for a wait before you can live in it!
- Read Between the Lines When Looking at Ads
In the United States, real estate ads are legally required to be factual and objective: opinions and adjectives are not welcome in their advertisements. In Spain, however, estate agents are free to be as liberal with their praise as they want (even if it isn’t wholly accurate). For this reason, American house hunters are sometimes disappointed with the first properties they view, until they learn to read between the lines of their descriptions.
- Be Prepared to Haggle
Spanish property sellers expect buyers to negotiate the price, and you can expect to secure a discount of at least 10 percent (often more) if you’re prepared to ask for it. This is very different to the market in the States, where 35% of properties sell for between 95% and 99% of the asking price.
- Expect to Work with More than One Realtor
In the States, you pick your favourite realtor, and they will show you all available properties, but it doesn’t work like that in Spain. Instead, the property owner will choose to list their property with a specific estate agent, and that agent will be the one to show you the property. That means if you want to look at four properties, and they are listed in four different places, then you will be meeting with four different estate agents.
- Don’t Expect too Much from Your Realtor
In the United States, realtors are licensed and regulated professionals who need to constantly update their qualifications to maintain their licenses. Realtors then need sufficient on the job experience working with a more experienced realtor in their sector before they can sell houses independently. This is because only a licensed real estate agent can sell a home in the United States. In Spain, anyone can sell a property, and anyone can show a home. Whilst there are a huge array of highly qualified and professional estate agents in the country, you are advised to check the credentials of the person showing you a property if you want to work with one.
- Be Pleasantly Surprised by the Price
Because many realtors are not as qualified and regulated in Spain as they are in the United States, you’re likely to find that the commission charged by an estate agent in Spain is lower. An average commission figure in the US is 6%, whilst an average commission figure in Spain is 6%, to give you a very loose point of reference.
- Understand the Different Regulations
What your realtor can and can’t do, and what you pay when, will also differ between the two countries. In the United States there are protection funds for purchase or earnest deposit contract that you must pay. In Spain there is no obligation to protect your funds in this way. As a result a buyer can lose their deposit in Spain, if they pull out of a contract after they have signed it, for example. Similarly, a US realtor who is not a lawyer cannot modify a contract at all, and may also be accused of professional intrusion, while in Spain property consultants or the clients themselves can agree to modifications to the contract, although this is very rare.
Are you ready to buy property in Spain? Whether you’re looking for a home of your own or an investment property, our locally based property experts are perfectly placed to help you find the right property to meet all of your criteria. Why not get in touch with the team today?