Do you want to buy property in Madrid but wonder how to do it? Perhaps you have heard a horror story about Madrid real estate agents and are wondering if using a professional property shopper will make sense economically? In this article we lay out the costs, and benefits, of using an expert to buy property in Madrid.
1- Using a professional can save you a lot of time
Nowadays everyone is extremely busy. Too busy to manage the current tasks on their plate, let alone spend the time shopping for and buying foreign real estate.
Any property search takes a lot of time. In fact, it takes longer to purchase property than almost anything else. Buying property in Madrid takes longer, and is more complex, than buying property in your home country for five different reasons:
Travel time
Depending where you live, traveling to Madrid can take hours. If you live in the US it can take you up to eleven hours to get to Madrid- and that’s just the flight time. Flights from Asia can take even longer. Aside from the time, it won’t always be feasible to jump on a plane if a new property you love comes on the market, or you have to fly back and forth to submit and finalize documents. Moreover, there can be a substantial time difference to navigate. Using a Madrid based property shopper will save you on all time expenditures.
Very few people in Madrid speak English
Unless you are extremely fluent in Spanish, it takes a lot of time to communicate with the seller and the seller’s agents. On top of this you will need to read through listings, navigate the city and eventually read documents. These things take time if you’re speaking in your mother tongue. Even if you speak a basic amount of Spanish, it can take you two to three times longer to communicate than in your own language. If you don’t speak Spanish at all you will have to hire a translator which will take time to locate. Then, the amount of time required for the translator to relay all information to you will double the time you spend communicating. The entire Moving2Madrid team speaks fluent English, which will save you a lot of precious time.
The local laws are tricky and opaque to the uninitiated
Once you understand the Spanish bureaucracy, the closing process is consistent and predictable. If you are purchasing a property for the first time, the closing process can be tricky. Moreover, it is difficult to figure out the process on your own. The Spanish Government has exactly one website written in English that we know of, and it has almost nothing to do with purchasing property in Madrid. You will also have to spend time finding a trusted, English speaking lawyer and gestor.
After you purchase a property you must take a number of steps. First, the transaction must be notarized. Then you have to register it with the local property registry. Congratulations! At this point you own Madrid real estate. But wait . . . you have to get the utilities put in your name (anyone that has dealt with Iberdrola or Telefónica knows how much fun this can be!) and interact with your Owners Community. To get a better understanding of the closing process in Madrid, have a look at 5 Steps to take after buying property in Madrid.
There are a lot of sub-optimal properties on the market
One of the reasons to buy Madrid real estate is the lack of high quality properties on the market. Many are old, unrenovated and often badly in need of repair. They are often broken into many small, dark rooms. Buying these properties and renovating them can make you a lot of money in rental return and future capital gains.
The problem is that this selling point makes for a much longer property search than in other cities. To put it simply, you have to kiss a lot of frogs! A professional property shopper knows the right places to look for apartments and has local connections to find good properties. Additionally, they have the experience to know the difference between a great fixer upper and a money pit.
Not all of them are nearly this bad, but this is an example of an apartment we purchased for a customer. We managed the renovation and that client is now making a great rental return.
Local agents can be trying
There are a lot of lovely things about Spain and Spanish people. Madrid real estate agents are not included in that list. We have met many, many people that tried to buy Madrid property on their own. After weeks, months or even years spent trying to deal with local real estate agents they came to us. Even the best local agents provide scant information and, quite frankly, are not to be trusted. We live here and deal with them on a daily basis. We are experts and we trust none of the local agents.
First, you need to keep in mind that they work for, and are generally paid by, the seller. That said, they do interact with potential buyers and many initially choose to go this route. We have met many, many people that tried to buy Madrid property on their own. After weeks, months or even years spent trying to deal with local real estate agents they came to us. Even the best local agents provide scant information and, quite frankly, are not to be trusted. We live here and deal with them on a daily basis. We are experts and we trust none of the local agents.
Remember: If you’re buying an investment property to let out, purchasing a property is only the first step. It takes a great deal of time to find rentors and maintain the property. Moving2Madrid is a full service agency. We don’t just shop for an buy real estate. We can also manage your rental property. Set up a free consultation to learn more about how we can help you.
2- Using a professional can save you a lot of money
Yes, using a professional property shopper costs extra money. The truth is, Moving2Madrid’s clients find that using our services actually saves them money in a number of areas. The sum of these costs is almost always greater than our fee- often times a lot greater.
You will save on travel expenses
If you shop for Madrid property yourself, you will spend a lot of money flying here every time you find a place. We are locally based professionals. We have the knowledge and local connections to line up a number of properties for you to quickly, and efficiently, see in one trip- up to eight per day! We can also perform the closing tasks so all you have to do is sign the documents. This saves you a lot of money on airfare, hotels and ground transportation.
You will save on professional fees
To buy Madrid property you need to engage the services of many professionals: a lawyer, notary and gestor at the minimum. If you don’t speak really good Spanish you will also need to hire a translator. We at Moving2Madrid have a relationship with many local professionals. They give us highly preferential pricing which we pass on to you.
We will get you the best deal
The Madrid property market can be tricky. The uninitiated can lose a lot of money. Experts know where to find valuable properties and what makes a good investment. We know the best neighborhoods in which to invest, we know current property prices and what is fair value. We also know negotiating best practices, and the tricks of the trade. All of this means that you will get a great property at the best possible price. To put it very simply, most people that purchase property on their own achieve a return of 4%. Our clients average an 8% return.
This is the after photo of the apartment above. Gorgeous, right? Follow in the footsteps of its owner, and the rest of our happy clients, and use our professional services to help you buy Madrid property.
3- Using a professional guarantees a safe, transparent purchase
Once you know how the Madrid market works you can get some great properties at some of the lowest prices in Europe- particularly for a capital city. However, not knowing the market can make it risky to buy Madrid property. Local agents are not to be trusted. Even if they’re honest (which rarely happens) they lack focus, which can cost you up to 20% in return.
There are a number of hidden costs when you buy Madrid property. These amount to 15% of the purchase price. We tell you about these before you start your search so you know exactly what your deal will cost. We also know all the local tax rules, and can usually save you up to 45% on Madrid real estate taxes.
Finally, we have our own due diligence process. We have trusted lawyer, gestors and architects. All of this ensures that, like 100% of our clients, you get the best possible return. There will be no bad surprises and you will enter into a long term relationship that will ensure excellent returns for 15-20 years.
Let the Moving2Madrid do all the work. We will save you time, worry and money.