Estate agencies in the Balearics have doubled and the risk of fraud has increased

Estate agencies in the Balearics have doubled and the risk of fraud has increased
By Andrew Ede

Over the past ten years, it is estimated that the number of estate agencies in the Balearics has doubled. Particularly attracted by commissions from sales to foreign buyers, some of these agencies do not have professional credentials. At worst they can be the source of fraudulent operations.

To take the third quarter of this year as an example, 32% of all home sales in the Balearics were to foreign buyers. This percentage is the highest for all regions of Spain and has become fairly consistent - foreign buyers represent around a third of the market.

There has been a slowdown in the number of sales, which has led to some agencies closing. But there continues to be a proliferation, aided by a lack of regulation. Hans Lenz of Engel & Völkers in Mallorca and the president of the ABINI association of national and international real estate companies describes the situation as chaos.

"Every day a self-employed person registers or opens a micro-business dedicated to real estate intermediation. The majority do so without any preparation for or knowledge of the sector. This represents a significant risk for the consumer. All too frequently, one of the two co-official languages is not spoken, which generates even more insecurity. It's a big problem."

Lenz says that there can be increased risk when foreign clients place their trust in intermediaries of the same nationality. "Many individuals get involved without the necessary knowledge and with little solvency to compensate clients for possible financial damages. They operate without knowing Spanish or Catalan, but then they can't understand legislation or the required taxes."

"It is urgent that a sector with such weight in the economy has a control mechanism with minimum guarantees." And Lenz believes that the lack of control is one more element that aggravates the housing crisis in the Balearics and creates another obstacle to facilitating access to housing for residents of the islands.

December 24, 2023 at 01:04PM
via Mallorca Daily Bulletin read more...