Buying a House in Spain

You have bought and sold many homes in the United States. You therefore can enjoy some level of competence when shopping for a house in Spain, right? Ha Ha! I am holding my sides from laughing so hard. That is the dumbest thing anyone has ever said!

Of course you are not dumb. To paraphrase Donald Rumsfeld, you know that you don’t know what you don’t know. Therefore, you immediately contact a real estate agent. You want the Spanish equivalent of my friend Bob Longgrear in Colorado Springs. Bob studied ethical rules and the laws governing real estate transactions, and then took a difficult examination. Having demonstrated competence in these areas the state government granted him a license to broker real estate transactions. How do you find a Roberto Longgrear in Spain?

Ha! That is a trick question! There is no Roberto Longgrear because Spanish real estate agents are not licensed. Theirs is a profession affecting what may be a client’s single most significant investment. And yet, they need not demonstrate to an independent body even a minimal understanding of the ethical and legal standards applicable to their office. “¿Licencia?” they say. “¡No necesitamos ninguna licencia apestosa!” Translation: “License? We don’t need no stinking license!” (Spanish real estate agents love The Treasure of Sierra Madre and have a wry sense of humor.)

We were looking at a house in Coveta Fuma when we first realized that ethical standards for local real estate agents might be, shall we say, relaxed. The seller’s agent explained that the house had been under contract, but the deal fell through when the buyers could not obtain financing.

“What was the contract price?” I felt stupid asking the question because of course the agent would not provide that information. Not only would an answer be unethical, it would be dumb. Our offer would not be higher than that previous contract price.

The agent responded with a number nearly €100,000 less than the list price! We would have bought that house, at that price, but for the pandemic (which hit Spain before paperwork was completed). We decided to wait and see what happened to the real estate market. For better or worse, that house was quickly snapped up by a less nervous buyer.

Fast forward a few months. We are consulting a real estate agent from England. We thought this a good idea because, being from England, he speaks English. We soon learned, however, that it was easier to understand the native selling agents than this man from Great Britain. He spoke English with the same clarity as Brad Pitt in the movie Snatch.

We learned (the hard way) that in Spain there is no reason for buyers to consult their own real estate agent. A buyer’s agent in Spain is as useful as urine in holy water.

In the U.S. Bob Longgrear has access to the Multiple Listing Service (MLS). He can review sale prices for similar homes in the same neighborhood. He will let you know whether a listed house is overpriced. Bound by strict ethical rules, he will negotiate on your behalf without revealing confidential information.

There is no Spanish MLS. One cannot objectively research past sale prices. Moreover, in the U.S. there almost always is a predetermined formula for buyer’s and seller’s agents to split commissions. In Spain, the two agents must work that out amongst themselves on a case-by-case basis. They must reach this agreement before the selling agent will show the house, or even reveal its address. Sometimes the selling agent simply refuses to work with a buyer’s agent. Using a buyer’s agent delays everything. And there is a substantial risk that the unlicensed buyer’s agent will reveal confidential information to the seller, just as the Coveta Fuma agent revealed confidential information to us. Indeed, my limited experience suggests that there is a 100% likelihood that one agent or the other will not know when to keep quiet.

We looked at nearly every house being sold within twenty-five miles of Alicante. We finally found one that looked promising. We asked our excellent attorney, Gonzalo Calderon Chao, to negotiate the purchase price. He explained that our real estate agent should not be involved in the negotiation process.

I spoke to the agent. I gave him certain information and assurances and, consistent with Sr. Chao’s admonition, told him to not speak with the seller’s agent. Shortly after that conversation Sr. Chao called to say that he had negotiated a price €5,000 less than what we had said we were willing to pay.

Guess what our agent did? That’s right! He immediately spoke to the seller’s agent and revealed what I had told him! Sr. Chao’s next call was to tell us that the sellers were backing out of the verbal agreement unless the price was raised €5,000!

Long story short, we agreed to pay the extra €5,000 and directed Sr. Chao to prepare a contract.

Ha! I fooled you! That is exactly what happened, but that was not the end of the story!

Sr. Chao did in fact prepare a contract consistent with our verbal agreement. However, the buyers did not sign. Why did they not sign? Their attorney said they needed to correct a mistake in the title documents. Sr. Chao confirmed the error and the need to have it corrected.

Weeks went by and the title documents were not corrected. Weeks turned into months. Meanwhile, the house still appeared in Internet advertisements. We said we would walk unless those ads were discontinued. They were stopped, but after many more weeks the title still was not corrected. We insisted on an explanation for the extreme delay. No response. We again said we would walk unless we got an explanation.

The explanation began with what we already knew. The error involved the home’s border with a neighbor. Back in the 80’s, when both houses were built, a certain document should have been filed in a certain government office. That document would have revealed that a two acre lot had been subdivided into two one acre lots. The document had not been filed some forty years earlier because that would have involved payment of a small tax (this is the part we did not know). The government now wanted €15,000 in back taxes and penalties.

Raising the €15,000 presumably was complicated by the fact that the neighbor should share in the expense (unless corrected, title documents would continue showing that our sellers owned both properties), and by the fact that our sellers were 16 individuals.

That’s right! Sixteen! That is because the house came on the market after the death of a very prolific man with that many heirs. Some of those heirs were more bullish on selling than others. Presumably some were better able and more willing to contribute their share of the back taxes. Getting these seventeen parties (including the neighbors) to agree on anything, and contribute funds in support of that agreement, must have been like herding a great many kittens.

After a period of time that was substantially more than one might consider reasonable, but still way less than eternity, our sellers corrected the title. Phew! Now the sale could proceed. Yeah! Denise and I uncorked the champagne. But then Sr. Chao called and we re-corked the bottle.

One of the sixteen heirs had unexpectedly died. Sr. Chao’s finely drafted contract would not be enforceable if signed by only fifteen of the owners. We would need to wait for the dead heir’s estate to be probated.

Long story short, months later the estate was probated, the contract was signed, and a closing date was scheduled.

Ha! I fooled you again! True, in January 2021 all the heirs signed the contract. True, we were able to agree on a closing date a “mere” six months later. But the craziness continued!

We were living in a rented house. That lease ended June 30. The closing would be on June 29. The timing was perfect! We could close on the 29th and move on the 30th. Finally things were going our way!

Or at least that is what we thought. You see, most of Spain goes on vacation during the month of July. The rest of Spain leaves a few days earlier. And June 30 was a Spanish holiday. We were unable to find a mover willing to work that day. We therefore had to move our belongings before closing.

Weeks earlier it was suggested that we ask the sellers for permission to move our possessions to the house before closing. I untactfully rejected that idea. Only an idiot would surrender all their personal property under these circumstances! What if there was another delay? What if during the delay our stuff was stolen? We could never prove that it was not taken by a stranger who slipped over the wall! What if our property was damaged? Could we prove that it was intact before the move? Or how it was broken? No, the only prudent course of action was to take our things to a storage facility.

On June 27 our personal possessions were stacked in the garage, ready to be relocated. I considered the cost of the storage facility, and I considered the time, trouble and expense of moving once. Then (in my head, mind you!) I multiplied by two. With only one day left closing was virtually certain to occur as scheduled. There was minimal risk that our property would be damaged or stolen overnight. We called the sellers. They would allow us to move the possessions one day early.

The sellers could not have been nicer. We filled their house with heavy cardboard boxes and bicycles and athletic equipment. We were almost done when one of the sellers, a very nice lady, approached us with an ashen face and a phone in her outstretched hand. She had just received word that her mother suffered a heart attack. “That’s terrible!” we said. We are not monsters. We sympathized with this person’s anxiety for the woman who gave birth to her and sacrificed much to see that she and her siblings were clothed and fed and educated and loved.

Then the poor woman explained that her mother was one of the owners who must sign legal documents to convey the property. Closing must be delayed until her mother recovers. We knew that if her mother did not recover the matter would have to go through probate court, again.

Maybe we ARE monsters. But if so, we knew enough to act like human beings. We SAID all the right things. Of course we would not invoke the contract’s penalty clause for the seller’s failure to close on time. The important thing was this sweet woman’s recovery. We would cooperate in every way possible.

We FELT all the wrong things. We were concerned for ourselves. Another delay was disheartening enough. But in addition we needed to find temporary lodging, and we didn’t know if we would require that lodging for another week or for six months. And all our things were under another’s control!

Possibly you feel superior. Maybe your sole concern would have been for the stricken woman and her family. Good for you. It is a wonderful thing to be able to delude oneself like that!

I took some satisfaction in being proved right. I had said that only an idiot would move all his possessions onto the seller’s property before closing, and I will challenge anyone who says that statement was not 100% accurate. As evidence supporting my position (that I was an idiot) I point to the fact that a week after our premature move the sellers notified our lawyer that we could not access our property unless we paid rent for its storage!

Long story short, we did not pay rent, the elderly woman recovered, and closing took place about two weeks later.

Ha! You thought “long story short” meant there was more to the story. But this time I fooled you by not fooling you! That really was how things ended, with a closing on July 19. The transaction went without an additional hitch (all possible hitches having been previously used). All we had to do was remodel this forty year-old house. But that, as they say, is another story.