Estate agents commissions – how we are paid
Estate agents in Tenerife are by and large paid commission by the property seller. In standard resales this is always the case although one could argue that the buyer is actually paying if the seller has given the agency a net price to which they should add their own commission to (as is common practice.) For example, a property owner may request 100,000€ net back to them in which case the agency will set the price at 105,000€ (100,000€ plus 5% commission.) So the agency effectively “adds” their commission. This will be the price which will appear on the title deed at the notary and the agency will submit an invoice for their commission to the seller. Commission is normally around 5% on prices of 100,000€ and above. On sales below 100,000€ it can be negotiated with the owner or a fixed fee may be charged. In these case the buyer will never be privy to the amount of commission involved.
With bank repossessions it is a slightly different process. Our agency is given the property usually at a fixed and non-negotiable price by the bank, we´ll use 100,000€ as an example again. So on a price of 100,000€ we are told to simply “add your own commission.” This is identical to a private seller and would result in a price of 105,000€. However there is one difference and that is that the bank will not allow for the commission element to form part of the final price which will appear on the purchase deed. So whilst the total price to the buyer is 105,000€, the purchase deed may only show 100,000€. The 5,000€ commission would be retained from the proceeds of the sale and we would provide an invoice for this charge post completion to the buyer. Although from the paperwork it looks as though the buyer is paying more than they should be (5%/5,000€ more) there is no difference between this and a standard resale other than an extra piece of paper at the end of the process and no difference in the overall amount they pay for the property.
Our maximum commission on repossessions of 100,000€ or more is 5%. An additional charge of 1% of the mortgage amount is added where a mortgage is obtained for the purchase. We do not negotiate on commissions as we see no reason why we should make less commission that any other estate agent in Tenerife – please do not ask!
The work required to sell a repossession with a mortgage of up to 100% is far greater than the work involved in a standard resale. Even so, we do not charge anymore for a repossession sale. Regardless of whether or not the commission is included in the price on the deed or is charged separately, the price the property is advertised at on our website will always be inclusive of any commissions. And that is the price a buyer should concern themselves with.