Real estate for sale under €500,000 is a tricky price point. To find a resourceful agent who can connect you with buyers and sellers, you'll need to do your homework.
Questions to Ask #
Each village has real estate agencies. In Port Andratx, there are over 50. Most of the agencies have offices close to one another and they market the same listings. You may not realize that Mallorca is a multiple agency market which means that few properties have exclusive representation.
Many agencies are franchises with international reach through a digital presence. 91% of all real estate transactions begin on the internet. All have the ability to market or they wouldn’t have set up a business in your village. Because Mallorca has no licensing requirements for sales agents, anyone can sell your home by connecting you to a friend and be paid a commission. Make sure that whoever you pay the 5% commission to is going to work hard on your behalf.
Before you commit to someone representing you officially, think about a few qualifiers. Remember: No good or bad, right or wrong answers here. Just questions to ask and answer so that you know with whom you will work and set your expectations of success accordingly.
- Does the person have experience in real estate on the island and in Spain or did you meet at the local bar? You might be surprised at how many people with no real professional commitment to the industry will offer to help you sell your house or find you a place to live. If you want success, go to professionals. They probably know more about the ins-and-outs of property laws in Spain.
- How large is her network of qualified buyers and sellers? You'll need to have confidence that the agent can play 'traffic cop' efficiently. You have a lot of money at stake. Whether you are renting a flat for a year or trying to secure your retirement dream home, it's best to have someone who understands how to help you with your specific needs. Are you an expat without residency? Find someone who understands your particular legal and tax consequences so that you don't have surprises.
If You Are Selling #
- Is he or she affiliated with an agency? What is the international reach of the agency? Where do they advertise and how to they generate traffic for the business? Mallorca is a sought-after destination with people from over 128 countries traveling every year to enjoy the sun, sand and sangria. But that doesn't mean that your townhouse in Escorca, however pristine, will get traffic or that you will find your ideal hide-away that you can afford on your budget on a special cala. Depending on your needs, there is someone for you. Save yourself heartburn and do your research.
- Will he or she be able to manage your marketing, showing schedule and sorting out title issues for your transaction? If you want a remote village property, you will need to do your own research and be willing to drive around the island to find your special place. As of now, even on the best online property listing sites, you'll have a hard time finding the deal of the century without scouring the countryside. Over 91% of real estate transactions start on the internet with that first search. Then, people visit. Mallorca is enchanting so be careful.
More Questions that Build Trust #
Once you have narrowed your selections, talk to your prospective agents.
- Ask for references from previous clients. The agent, most likely, will only give you a list of satisfied clients. While you may not hear about the cons, this is useful homework in getting to know how open the agent is with communication. The last thing you want is to be engaged with an agent you can't trust.
- How many transactions have been completed by the agent in the past few years? On the rental side, experienced agents know how to protect you through the contract. Best to find someone who has your best interest, not just their pocketbook, at heart. Expat communities are tight-knit. This can work in your favor.
- Once you have narrowed your selections, talk to your prospective agents about price points. Some agents have no time for any property under €500,000 while others know this is the bread-and-butter of Mallorca. Just ask to see this agent's desired market price points.
- Ask about the variation from the asking price to the sales price for a completed transaction. Whether you are buying or selling, this is super helpful to see about targets and to set expectations.
- Obtain the name of the attorney, accountant and notary he or she likes to use. Do research. Not all service providers are fluent in your native language. Make sure that you find professionals who can help you sort details in your native tongue and don't just trust your friends to translate. That is a recipe for potential disappointment.
If Buying - Have Proper Documentation #
Once you select your agent and sign a listing agreement, you’ll be asked for proper documentation on your property so that you meet agency requirements for the listing agreement.
- Escrituras or title deeds are historically flawed in Spain. Remember that Spain is a relatively new democracy and newer still to technological innovations. More often that not, the deeds have errors in metes and bounds, legal descriptions and clear ownership. This information is vitally important even if you are renting because to register at the local Ayuntamiento. You will need to have a lease signed by the legal owner who is registered in the local town hall. Huge surprises when you want to get your mail, get a public benefits card and you can not register locally.
- Energy Certificates are mandatory. Make sure the certificate is on file. If not, this is the owner's responsibility so if you are the buyer, do not agree to pay for it. Another aspect: you'll need to make sure you have enough voltage coming into the house or apartment to serve your needs. Otherwise, come winter with an electric space heater and using a hair dryer could short circuit your lights.
- Cadastre Map is not always accurate. This is when a good architect will come in handy. Make sure you find a reputable architect who works with a reputable lawyer. You will need help in sorting through the details of zoning laws that do seem to change more often than not. I have stories that I will save for another article.
- Check the online cadastre here with the IBI. Keep a recent IBI bill handy for the reference number of the property in question.
Communication is Key #
Make sure to get a communication plan. Settle on when you can have regular updates with a commitment from the agent on how often he will contact you. If your property is shown, the agent needs to provide you with an overview of the showing and what works and doesn’t work for the client so that you can judge price, marketability and expectations of sale. The agent is paid to service your listing properly and keep you informed on all matters.
If you are buying and find something online, send the listing to your agent so they can do the homework to confirm a few points:
- The property is legitimately available. Fraud is not uncommon on Mallorca. Just because you see a photograph, the property is on the map, the person has a bank account does not mean this is not a sham. Let you agent do her homework.
- The paperwork is in orderBy. That beautiful property priced at €495,000 in Ses Salines on the beach might not have proper permissions. Don't let the agent tell you that you have to see the property before the paperwork is shown to you. Take that as the first red flag that something might be amiss and ask your agent to get the paperwork sent to that reputable lawyer I mentioned above. Save yourself time and aggravation.
- The price and terms are settled. Furnished or unfurnished and commissions are settled. Surprises happen. Get terms in writing prior to any exchange of property information.
Owning a property on the island is no longer easy. With COVID restrictions, travel is limited to those with residency. BREXIT has added the challenge to travel by only allowing UK residents to visit their homes for 180 days a year and only 90 days consecutively. The cost to live on Mallorca is 3% higher than the mainland, according to the latest economic studies. Our experience says that number may be low.
Whether buying or selling, make sure you are not caught by the allure of smooth takers who make promises they are unable to keep. Since agents on Mallorca are not licensed, accountability is difficult. For this and other reasons, we suggest you work with experienced agencies that have a strong online presence, locally-known and reputable agents with working relationships with banks, notaries and gestorias. This way, your goals will be achieved.
With the allure of the island beckoning, make sure to not let the enchantment cloud your judgement. If you have a personal story to share, please drop us a note at [email protected].
By Memphis Holland
18 March, 2021