This is Not About Coronavirus or Donald Trump

Do you want to read another article about Donald Trump or the worldwide pandemic? You know, the subject of every news program and talk show and newspaper article? I thought not. So today I will discuss buying real estate in Spain. Entire books have been written about Spanish real estate without even once mentioning Donald Trump or Covid-19. Books about quantum physics also do not mention Trump or Covid-19, but I am not good at math, so the subject will be Spanish real estate.

Denise and I had grown weary of living in the human filing cabinet popularly known as an apartment building. Beginning last February we searched in earnest for a luxurious and affordable house. Generally those adjectives are not both applied to a single home. But we had high hopes.

In the United States buying a home is easy. Simply find an honest and hard working broker like Bob Longgrear. He will search the MLS (multiple listing service) which will describe each and every house for sale in a given region. Once he finds a home that interests you Bob will do a little research and in very short order tell you what comparable homes have sold for in the recent past. Armed with this information you make an offer and put down a little earnest money, say $5,000.

Things are very different in Spain. Each seller may simultaneously list a home with a number of different brokers. There is no MLS equivalent. There also is no central database Roberto Longgrear can use to research past sales. In Spain, Roberto Longgrear will be as useful to the buyer as teats on a boar.

Although there is no MLS, there are Internet sites advertising homes being sold by various brokers. Each advertisement will include poorly shot photographs of a house and whatever price the seller hopes it will fetch. Usually the seller’s hopes have little or nothing to do with reality. The numbers are pulled out of thin air, or perhaps some other much more disgusting place. If your budget is, say, $300,000, you should not be dissuaded from looking at homes listed for up to $400,000.

Spanish taxes may explain some of the sellers’ unrealistic intransigence. The local government will impose a sales tax, usually about 10%, which must be paid by the buyer. There also will be lesser taxes and fees. All together, a $300,000 home probably will require a check for at least $335,000. While payment of $335,000 will not make your new house worth more than $300,000, human nature may compel you to demand recovering at least what you paid for the home.

Taxes do not fully explain sellers’ high expectations, however. In the United States, if Bob Longgrear was representing a seller he would conduct a market analysis and educate an overly optimistic owner. Real estate agents in Spain lack the objective evidence that might persuade a seller to lower expectations.

Many Spanish homes remain on the market for years. But if you happen to come at just the right time, such as during the seller’s divorce or after an owner’s death, some circumstance requiring a quick sale, you may negotiate a price that is 25% or more less than the listed amount.

Denise and I found a lovely home carved into a hillside and overlooking the sea. We negotiated the cost down to a price we could (barely) afford. The broker assured us she would take care of all the necessary paperwork, but we hired a lawyer. That’s when we learned how very important it is to have a lawyer when you buy real estate in Spain. Without a lawyer you will never receive an eighteen page single-spaced letter explaining what might go wrong if you buy the house of your dreams.

No, I am not exaggerating. We received an eighteen page letter which I would summarize for you but for the fact that it is extremely boring. Thinking about it makes me want to take a nap.

I will say, however, that the letter described how the lawyers researched the property in three different government offices. It revealed in excruciating and sometimes incomprehensible detail the problems they uncovered. One problem involved the seller’s failure to get the notarized consent of eight neighbors before making an improvement.

There being no homeowner’s association, and there being no way for the neighbors or the local government to legally enforce the requirement, I could not make sense of the lawyer’s insistence that the lack of consent was a problem. But if we needed to get consent from the eight neighbors there definitely would be problem. The neighbors, you see, all live in England or France or the Netherlands, and visit their vacation properties once a year, if that. Once we spied a neighbor lounging by his or her pool we would need to approach them and convince them to put on street clothes and drive to a notary’s office and sign a legal document.

“Could we just ask the notary to visit the neighbor?” I asked. “Har Har Har!” roared the lawyer. He had never heard anything so absurd. Notaries are highly regarded professionals in Spain and they do not make house calls. “Har Har Har!” The lawyer laughed some more because my question was very funny.

Most of the other problems were minor and easily solved. Some were less problems than mere uncertainties, such as whether the seller owed any taxes or fees which might be passed to a purchaser. The local government office might take two months to answer that particular question.

We decided to proceed with the sale, but to renegotiate the price to account for problems and potential problems the lawyer identified. It was during this process that Spain announced that it would be locking down the economy.

I know, I know, I promised no coronavirus. But the lockdown is severe and promises to continue for quite some time. Presently negotiations are stalled and, because we are locked down, we cannot look at other homes.

For the foreseeable future you can find us in our human filing cabinet. Look for us in the drawer marked “Still Waiting.”