Mallorca Property Finder Fees & Questions
Property Finding with David Novi BA MPhil MRICS & Novi Property Mallorca
Perhaps the best way we can highlight what we can offer as a Property Finder / Buyers Agent is via a “question and answer session” but here firstly are the key advantages:
- Impartiality – we operate for you not the owner so you will get the “warts and all” version!
- We don’t sell properties, we introduce areas, towns and villages, the advantages and disadvantages of each, and then bring to you the widest possible selection of appropriate properties that meet your brief from agents, developers, local contacts and simply “unearthing” off market opportunities
- As professional valuers and experienced negotiators we will advise and assist you in establishing the real underlying value of any shortlisted properties so that you can negotiate and purchase fully informed and thus at the best possible price.
Let us explain in more detail.
What is the difference between a Property Finder and an Estate Agent?
Fundamentally an estate agent is retained by the seller, acting on their behalf and interest, including trying to achieve the highest possible price for their property. Equally importantly they are only in a position to offer those properties they have on their books nothing else. Since they normally operate in a very limited geographical area their “interest” is to sell their area and downplay others (you will never here an agent telling you in detail of the disadvantages of their area nor the advantages of others!).
By contrast we am engaged by you the buyer to find the right property at the lowest possible price and in the best area that suits your requirements. We am not limited geographically nor to what we have on my books and on top of that we have the professional expertise, as Chartered Surveyors and Valuers, to assess real underlying value for you. While an estate agent needs to sell and will show properties in a favourable light eg showing a property at certain times of the day only due to the fact that out of these hours there is no sun light, or there is additional airplane activity, we will look at the property through your eyes, as buyer, thereby making you aware of any negative aspects related to the property or its surroundings as well as the positive.
As it is often the case that a buyer will not be 100% sure where they want to be located or at least are not fully conversant with alternative options, we am able, in a balanced and impartial fashion, to offer advice and arrange viewing trips throughout the Island of Mallorca so you can firstly familiarize yourself with the options before moving on to use ou local knowledge to identify the best and most suitable options meeting your pre agreed requirements. It is quite conceivable that after listening to your requirements and discussing these in depth that you may find yourself interested in not only alternative areas but even different types or styles of property!
How do I get started and what is the basic process once I employ you as my Buyers Agent / Property Finder?
Generally we like to have a meeting with you to discuss your requirements in detail and establish a brief (if a face to face meeting is not viable phone and email can still get us there!). This exercise is about establishing the purpose of the purchase eg holiday home, full time home; relocation; investment etc; setting the budget (and understanding whether finance is required and how that can be arranged); what are the characteristics and amenities desired and required both of a property and an area etc. As we mention above, if necessary the initial part of the exercise may be taken up reviewing different locations, to see which suit best, before concentrating on the actual property search.
With this established we start the process of establishing what is currently available, in the defined area(s) including walking the streets / patch, talking with locals to get additional inside information and possible alternative opportunities. All these findings will be reported to you and a short list will be established. Then and only then will we suggest a trip over (assuming you are not already here!) so there is no time is wasted viewing unsuitable properties, in inappropriate areas and thus the whole exercise can be condensed into a very manageable and cost effective time frame.
Remember if you are not sure about which areas you are likely to find suitable, an initial trip can be arranged to consider different locations so you get a real feel before we home in in a detailed way on the individual properties.
How do we find properties for you?
The long and short is “any possible way we can”! That will include using estate agents whom we know and trust as well as our wider network of contacts (local lawyers, accountants, friends and family, you name it!) and in this way additionally find properties that are available privately rather than via agents (quite common in Mallorca). This exercise might even throw up opportunities that are “off market”. In traditional rural areas one can still find local ‘corredors’ that are individuals that broker sales and are close to the ground. Couple that with constant reviews of local press and, where necessary, targeted mailings to find potential sellers in specific developments, no stone will be left unturned!
So what will this cost me?
Generally it comes at no direct cost to you as buyer as we are paid a standard rate commission by whoever you eventually buy through – listing Estate Agent, Developer, private owner etc. As this is a standard rate it makes no difference to us which property you purchase so we remain impartial and “batting for you”!
On occasions a buyer will want to spend time exploring the Island first and will want us to organise an “Area Viewing Trip” before homing in seriously on the property finding. At other times the buyer will come to us later in the process having already done some viewings directly with agents but just can’t find the “right” property. In both these cases we may discuss a direct fee, but only if we agree that the brief can only be appropriately implemented with a fee being levied, generally where conflicts of interest could arise due to the contacts previously made by the client prior to contacting us.
Remember we work exclusively for you, as buyer, so there is no conflict of interest between buyer and seller. As stated above an estate agency will only offer what they have on their books and not actively search for a property on your behalf. On top of all this as Chartered Surveyors and professional Valuers we can provide unrivalled insight into the real underlying value of shortlisted properties, helping to ensure you buy your chosen home, fully informed and at the best possible price. All this can save you thousands and thousands of euros!
Add to this the time and cost savings of numerous wasted viewing trips and you will see the real advantages of the service and the value for money offered. We could go further, talking of local knowledge and contacts, knowing “how things work” such that what we can offer provides you the buyer with the key to any successful service – a professional and transparent approach; full information for decision making; and real value for money – money saving. And you can be sure of one thing, we will not be pushing you to sign any contract or pay any deposit until we, alongside your lawyer, have completed an exhaustive legal and financial due diligence exercise. All the horror stories you hear in the press are down to a lack of attention to detail and things just being done to quickly (due to lack of professionalism mainly, but occasionally, real “mal practice”!)
I like the sound of the property search process you set out but what happens when I have identified the property I want and would like to proceed to purchase?
As we have just said the horror stories in the media are down to lack of professionalism and, sometimes mal practice, rather than a fundamental flaw in the system of buying property in Spain / Mallorca. If you do things properly the process is very simple and transparent. The first thing you need is a lawyer (don’t let anyone tell you otherwise!) If you need help finding a lawyer we are happy to assist but we are equally happy to work along side your own chosen Solicitor. Once you have decided on a particular property the normal practice is to pay a small reserve deposit to ensure the property is taken off the market while legal enquiries are made. Although the sums involved are generally relatively small (1,000€ – 5,000€) we are generally of the opinion that this is not necessary and risks that the deposit will be lost if the lawyer subsequently finds problems with the title deeds etc, unless there is a very tightly worded Reservation Contract something which is invariably not the case.
The key stage of the due diligence exercise is obtaining the Nota Simple, a shortened and up to date version of the Property Title Deeds (or escritura in Spanish) and checking the title and exactly what is being purchased according to these deeds. Don’t be surprised to find the deeds don’t reflect what you see on the ground! This isn’t always a problem if it is simply a matter of updating the Deeds (Spaniards often prefer not to as many local taxes are based on declared values on the Deeds and “Catastro” a second register that sits along side the main Land Registry. There will be cases however where some or all the property may not have it’s paperwork in order and alarm bells will start ringing (hence why we like my clients to keep their hands firmly in their pockets before putting money / deposits down!)
This exercise is then brought together in a draft contract that is prepared by your solicitor. Generally these private contracts are used is a very similar way as to “exchange of contracts” in the UK providing buyers with the time to transfer funds and organise any other aspects of the purchase prior to completion (note: often estate agents will want to encourage signing of this private contract and the payment of the 10% deposit prior to mortgage finance being in place etc. I never recommend my clients do this, especially in this market, as if the finance is finally not forthcoming, or the amount offered less than you require, you could easily end up losing your deposit and having to withdraw from the purchase. We always recommend an in principle mortgage offer is obtained as earlier as possible in the search process, to help set a firm budget and ensure there are no unpleasant surprises and disappointments at the last moment. This is another area we are able to assist with.
The private contract is binding on both sides and thus should you as buyer subsequently default (hence what I say re not signing before the binding mortgage offer is in place!), the 10% deposit could well be is lost. The flip side, to protect you as buyer, if the seller pulls out there is a general requirement that double the 10% deposit is returned to you and it is very important for this to be specified in the contract (where the deposit is held is another important question often forgotten but that is another whole subject!).
Completion of the purchase takes place in front of a notary and, unlike in the UK, with both the seller and purchaser present or represented by means of a power of attorney. The deeds will be signed, the keys and monies handed over and that’s it.Important note. – while often buyers decide for convenience to give their Solicitor a Power of Attorney to cover aspects such as applying for the NIE (a fiscal identity number required by law prior to purchase) or transferring utilities after completion, be very careful of giving an open Power that is not limited by time / what activities are covered. While most lawyers are very professional we have all read the horror stories!