Sometimes I hear directly from people or read blog or forum entries that estate agents in Tenerife or Spain in general, are paid too much.
Granted, 5% of the sales price is more than three times the average commission rate charged by the estate agents in the UK – in fact there are some agents now charging as much as 6%. As I wrote in a recent article for this paper about the major differences between buying property in the UK and Spain, one of the main differences was the commission rate charged…I wrote…”The main difference here [in Tenerife] is the fact that there are hardly any properties on an exclusive basis with agents and as such there are lots of property sales that get shared between agents and therefore each office ends up with 2.5% of the commission. What the agent does for their money is also very different to the UK agent as well though.”
In this article, I propose to defend the commission that I and my industry colleagues charge and explain why earning 2.5% and on the very odd occasion the full 5% of the sale price is justifiable. To add to that though, I also think that the real estate industry should be regulated here in Tenerife and you can read my thoughts about that in the article highlighted.
As anyone who knows anything about estate agents in Tenerife will know, there are no national governing bodies, so anyone can open an estate agency…although this is something that if it were in my power to change, I would. So, no governing bodies means that there is no protection for any buyer or even seller. It can be…and very often is…a minefield, so at Tenerife Property Group we attempt to make everything that the uninitiated buyer or seller needs to do or know as easy to access as possible.
, maybe even illegally taking details and photographs of properties from other agents websites, showing a property to a prospective buyer and waiting for the commission cheques to roll in. Add to that the fact that we all drive large, posh cars, sit in a pub most of the day and leave just to have a round of golf to make sure that we get home in time for the British soaps on TV.
As a self employed estate agent, I pay my taxes to Hacienda, the Spanish tax office. I also charge IGIC – Canarian VAT which generally speaking, after a little negotiation with the vendor tends to be included within the commission fee charged instead of on top, which in turn means that the full amount of the commission fee is not paid to me, instead quite an amount gets paid to the government. I really don’t mind this at all because I live in a fantastic country, on a beautiful island where generally speaking there are good public services.
Of course, being self employed, I must also pay my own Security contributions but maybe one of the biggest things about being self employed is the risk that I take every day that I may not get an email from an interested buyer or seller, I may not sell a property for a month or two and then I may not be able to afford my office rent or advertising costs nor the aforementioned taxes and Social Security contributions.
The estate agent of today…well, in our office anyway, is tasked with many more things than our counterparts in the UK. We assist buyers with meetings with their chosen lawyer, help in opening banks accounts, attend the completion of the sale at the notary office, assisting the vendor with the paperwork that they are required to provide for their sale. It doesn’t always stop there either, we very often help when things are required by the new owner when they are unsure about where to go get repairs done or to buy things for their new property and I should point out that that still doesn’t include the designing, building, updating and marketing of various websites on which to market properties for our vendors and the expense of other marketing efforts.
There’s very little point about going on about how many properties might be shown to prospective buyers and never bought and also that not all potential sales don’t work out, even though we’ve done a whole load of work.
I won’t go into detail about how, through email marketing and website presence, I have managed to match a buyer and seller and successfully sell a property only for some unscrupulous buyer and seller to try to do the deal behind my back and hope that I won’t find out therefore, through absolutely no fault of my own, attempting to make me earn nothing.
Honestly, I don’t expect anyone to feel sorry for me…far from it, I choose to be in this industry, I choose to be self employed and really, if I didn’t like it or I thought that it was unfair, then I wouldn’t be doing it – but I’d just like some people to realise that it’s not as easy as they think it is and taking the risk of being self employed and marketing myself and the Tenerife Property Group website doesn’t come cheap and tends to eat into quite a bit of my personal time with my family…say’s he, writing this article on a Sunday evening…well I have been cleaning my big posh car, spent the day in the pub, played golf and watched Eastenders all week, so I should do something I guess…
Many people don’t understand that when I wake up in the morning, I am effectively unemployed and that I’ll need to get on and do something that day to at least get the ball rolling to gain potential buyers for my sellers and to realise that I’m still working or carrying out a viewing on a weekend or maybe in the evening and they’re sipping their glass of Chardonnay on their balcony.
To boil it down, I have no reason to be apologetic nor embarrassed and I’m very happy to explain my commission fees to anyone that asks and I am happy to defend the position of the honest, tax paying estate agent in Spain, of which there are still quite a few of us. No property seller has to engage the services of an estate agent, as is borne out by the many “Se Vende” signs one sees everywhere, but if they want to raise the profile of their property and have a better chance of selling it, then currently, we are a necessary evil…
If you’d like Tenerife Property Group to assist you in the sale of your property and charge you the exorbitant fee of 5% plus IGIC, please contact me on 0034 610 18 27 44