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Property in Spain For Members

Six big differences between buying a property in Spain and in the United States

Alex Dunham
Alex Dunham - [email protected]
Six big differences between buying a property in Spain and in the United States
Miami or Marbella? What should Americans be aware of when it comes to buying a property in Spain compared to the US? Photos: Claudiu Danaila, Joe deSousa/Unsplash

Spanish property purchases by US nationals have increased by 90 percent since 2019. But what are the main differences with the US real estate market that they should keep in mind before searching for a Spanish property?

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Since 2019, Americans have been buying property in Spain at record rates, up by 90 percent over the four-year period.

In the first half of 2022, US nationals bought a record 1,162 homes in Spain according to Spain's General Council of Notaries, 75 percent more than during the first six months of 2021. 

They may still only represent 1.19 of the total number of foreign property purchases in Spain, but it's a trend that's on the up, as evidenced by a Wall Street Journal article in March 2023 titled "Americans are buying homes in Spain more than ever before".

A strong dollar, better prices in Spanish big cities than American ones and the allure of Spain's culture, climate and quality of life are all contributing factors.

READ ALSO: Should Americans rush to buy a Spanish home while the dollar is strong?

"Many Americans see Spain as an investment opportunity," Felice Tufano, vice president of real estate company FIABCI Spain, told Spanish property portal Idealista.

So what differences can they expect to encounter when looking and potentially buying a property in Spain?

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It takes longer to buy a property in Spain

According to data collected by the US’s NAR (National Association of Realtors) and its Spanish equivalent SIRA (Spanish International Realty Alliance), the average time for a property transaction in the United States is three weeks. 

The pandemic has influenced how long it takes on average in the US but prior to this, buying/selling an American property took five times less than the average transaction time for a property in Spain.

READ ALSO: US-Spain city comparison - A guide to help Americans decide where to move

Negotiating a discount is a must in Spain

According to the NAR, 35 percent of US home sellers agree to sell at between 95 percent and 99 percent of the marked starting price.

In Spain, the margins are greater as prices are inflated and therefore the average discounts are well above 10 percent according to the experts, even when it’s a seller’s market.

READ ALSO: How and when can you negotiate the price of property in Spain?

 

Realtors in Spain aren’t necessarily qualified professionals

American realtors do need to have a licence obtained through university training or other specific courses, as well as having to update their accreditation with new qualifications to renew their licence. 

They also have to work for two years as an employee for another more experienced professional before becoming independent and beginning their freelance career.

“In the US, only the owner himself or a licensed real estate agent can sell a home. In Spain, access to the activity is free and professional barriers are non-existent,” SIRA head Francis Fernández told Fotocasa, one of Spain’s other major property websites.

“Anyone - the doorman, a neighbour, a relative, etc. - can handle the operation, which in the US would be considered professional intrusion, ” said Francis Fernández.

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Commission in the US can therefore be higher

In the US, the higher the specialisation of the realtor, the higher the commissions are, generally speaking. 

“The North American real estate agent also needs to specialise in a certain area of work: residential, commercial, solar, etc. so that they can offer the client detailed knowledge in their area of expertise,” explains Fernández.

In the United States the usual commission in a buying and selling transaction is 6 percent while in Spain it ranges from 3 percent to 5 percent, something that contributes to making this activity more profitable for real estate agencies and the realtors themselves. 

READ ALSO: Five key points about Spain's new housing law

 

Property ads in Spain can be more embellished 

In the United States, housing advertisements must be absolutely objective and accurate.

As a result, it is not possible to describe an American home as “wonderful” or “cosy” as that is subject to interpretation.

The opposite can happen in Spain, where the agent or the private seller is at liberty to speak wonders of the property even if it’s not accurate.

If a US realtor is aware of a defect or damage to the property, they are legally obliged to mention it in the ad or inform the potential buyer, as well as having to give them a document to sign confirming that they have been informed.

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More regulation and legal guarantees in the US

In the United States there are protection funds for purchase or earnest deposit contracts (contrato de arras), in which it is mandatory to deposit and insure the amounts deposited by the buyer.

In Spain there are no obligations in this regard, even though there are other processes that have to take place. 

A purchase deposit contract must be signed but there are situations where the buyer can lose their deposit or the vendor has to pay double back.

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 (Agente de la Propiedad Inmobiliaria, API) or the clients themselves can agree to modifications to the contract.

 

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