Estate Agent's Commission
There is much confusion as to how estate agents' commissions are paid, when they are paid and by whom. For this reason we are providing you with our commission structure.
Our commission is always a percentage of the sale price of the property - the sale price being that which you see on the website against each property reference.
ICC charges commission at the following rates:-
For houses up to 400,000 euros 5%
For houses up to 800,000 euros 7.5%
For houses above 800,000 euros 10%
As a registered Spanish company our accountant also states that the tax man will not believe that we charge less than 5% in commission and will tax us on this amount in any event.
The commission is payable when the purchaser takes possession of the house, not necessarily when the house is fully paid for. This is because, unlike England, it is possible to negotiate moving into a house in rural or inland Spain whilst its paperwork is being progressed. In circumstances where the house is not registered and a new registration process is necessary to obtain title deeds, in circumstances where there is a mortgage or more than one charge on the house, in circumstances where it is necessary to declare an Obra Nueva (new build) or when perhaps the m2 on the original escritura is less than that which exists, the paperwork can take several months and sometimes over a year to complete. Hence, if the house is unoccupied, it may be possible to arrange to move in by paying the owner an agreed sum of money and then paying the balance when the paperwork is prepared. However, please do not consider this to be something that is normal or a matter of course. This would happen only in rare circumstances.
In terms of who pays the commission - this varies too although in reality the purchaser pays because the commission is included in the sale price. Sometimes the owner will agree to pay the commission from the money that he obtains from the sale of the house but more often the owner will ask that our commission is added to the price that he actually wants for the house. In other cases the owner may want to pay half of our commission and request that the other half is paid by the purchaser. Most Spanish owners will tell us that they want 'X' amount of money "limpio". This means that if he wants say 200,000 euros for his house, he wants exactly this amount of money clear. He does not want to pay taxes, registration, notary, legal or estate agents fees. Therefore those fees are calculated and added to the 200,000 euros.
We work with a number of other agents throughout Spain and there is a myth that if there are several agents, there are also several commissions added to the property price. This does not apply to properties on our website. There is one commission as detailed above in the commission structure and that commission is divided equally between however many agents participate in the sale of the property.
The commissions in Spain are higher than England because we do more work than estate agents in England. For example, we collect clients from the airports, arrange their hotel accommodation, drive them around to view houses sometimes spanning over 1000 kms. We negotiate offers on the properties, we obtain estimates from various trades people for work which may be needed to reform older properties, we obtain sufficient paperwork so that the lawyer can carry out the conveyance of the property and sometimes we do a lot of the conveyance work ourselves. A high percentage of our clients do not speak Spanish and we provide a lot of translation services for them after they have purchased. We also continue to assist with problems long after the client has purchased or moved into the house. We arrange mortgages where required, open bank accounts for our clients and liaise constantly with their lawyers throughout the buying process, most of whom do not speak English. Many of the banks in our area do not have English speaking staff either. For anyone who may think that our commissions are high, we offer an opportunity to spend 2 weeks working in our offices so that clients can have first hand experience of the difficulties we face daily in a country where even the simplest of things can take an age to achieve.
