n this Deep Dive series episode, Peter from Frank de La Fuente Abogados speaks with Keith from Target Property Spain about the differences in property buying processes between the UK and Spain.
Keith, who has 20 years of experience in Mijas Costa, explains that most of his clients have historically been British, giving him a strong understanding of UK buyers. He compares the property market dynamics in the UK and Spain, highlighting several key differences:
- Information Availability: In the UK, buyers have access to a lot of information, such as past sale prices, which is not available in Spain. Buyers in Spain are limited to advertised prices, which can be misleading.
- Buyer Behavior: UK buyers typically know the area they want to buy in, while buyers in Spain often need guidance on finding the right location. In the UK, an agent typically has exclusivity over property listings, whereas in Spain, agents share listings, and the process is more consultative.
- Market Understanding: UK buyers know local prices and property values well. In Spain, however, property prices can vary significantly even within a small area, especially when considering factors like views and orientation. Agents need to guide buyers beyond just square meter price.
- Regulation: UK agents don’t need individual licenses but the agency must be regulated. In Spain, agents don’t need formal regulation, which Keith believes should change to ensure better industry standards.
- Deposit Contracts: The UK lacks the concept of “arras” (a deposit contract) that exists in Spain. In Spain, once arras is signed, both buyer and seller are locked into the deal. UK buyers are often surprised and relieved to learn about the security provided by the Spanish system, as it prevents situations like gazumping (where a third party makes a better offer after an agreement is reached).
- Financing: UK buyers often use equity from their UK property to finance their Spanish purchase. In Spain, refinancing is rare, and buyers must secure financing at the purchase stage if they wish to finance their property.
Keith stresses the importance of agents forming personal relationships with clients, as agents in Spain often guide clients through not only the sale but also after-sale concerns. The UK system is seen as more transactional, with less ongoing support.
Keith concludes that UK buyers often find the Spanish process more secure and simpler once they understand the differences and the agent’s role in guiding them.