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Illegal agents still operating in Croatia

Dear clients and guests!

It is our obligation to warn you that illegal agents and agencies are still operating on the Croatian real estate and rental market. 

You will also run into unprofessional agencies which will try to put pressure on you to purchase a property without your lawyer properly checking out the legal situation.

Here are several hints how to recognize such illegal or unprofessional agents or agencies: 

1.  Ask the Agency for their agent/agency licence registration number which you can check at Croatian Chamber of Commerce website ... http://hgkreg.hgk.hr/posredovanje/ which is in Croatian but you can ask for assistance from a friendly local or ask someone on the Visit Croatia Forom to check it out for you. 

2.  Ask the agent and agency for their company registration number OIB, the address of their office and check if it actually exists or not. 

3.  Ask the agency to show you their indemnity insurance policy against business risk

4.  The average commission rate in the Zadar region is a charge of 3% included in the property price that the seller pays, unless another amount is negotiated. 

5.  Agents and agencies will also charge the buyer a commission based on the services that they are offering the buyer.  For example, we charge the buyer:

  • 1% to the buyer if we have to assist the buyer with getting an OIB at the tax office, advising on setting up a bank account, advising on how to transfer the money to the buyer to avoid unnecessary extra expenses and complications, and helping to transfer all property services to the buyer after the purchase, and help you complete and submit your tax report
  • 2% if our lawyer verifies the property papers, advises you on any questions you have about the property,  does the pre sales and final sales contracts and annex, and ensures the title is transferred in the court records and that you get a copy
  • 3% if our architect verifies that the building and land is recorded as it should be in the katastar records and court.  We have had instances when all looks OK, the title is clean, the property has a building permit, or is legalized but changes have been made later and not legalized or changes have not been submitted to the katastar. For an additional fee you can also get a full architectural evaluation of the building if you want full disclosure of the quality of the building.
6.  Ask for client references from clients that speak your language and also try to see if there are negative reports on the internet about them

7.  If you find that the agent or agency check is not providing you with true information or hiding information or are missleading you in any way, you are probably dealing with an illegal, not registered agent/agency or simply an unprofessional agency.

8. Some agencies advertise lower prices than provided from owners, those prices are sometimes false and are formed so as trap to attract buyers; some agencies advertise properties that are not for sale or no longer for sale aiming to attract buyers this way, some agencies provide false pictures of advertised properties.  Please note however that an agency does not need to have a direct contract with the seller if they are working in partnership with an agency that does have a contract.  Some agents and agencies will tell you that every agency must have a contract to sell but that is not true as agencies can work together and split commission if they so choose.

9.  If an agent/agency puts pressure on you to decide quickly about purchasing a property, be aware that it highly unlikely that another person is about to purchase the property, that this is wheeling and dealing in most instances.  Also be aware of a possible fraud or criminal act. We strongly recommend you to hire experienced lawyer/solicitor who will check the legal paperwork on a property. 

10.  It is not enough for an agent or agency to be working with a lawyer ... you must meet with that lawyer .... as it is against the law for agents/agencies to prepare contracts or do any legal investigation that falls within what can be termed as providing legal information or services.  Agents and agencies can advise the client that all looks OK with the legal paperwork, building paperwork etc., but you should use the services of a lawyer as the agents job is to advertise properties, show properties, introduce a buyer to a seller,  broker an agreement.  Agencies actually sign waiver agreements with sellers that explicitly state that the owner of the property is responsible for any non-disclosure, making agents/agencies not liable. 

So the best you can do for yourself in what is a major sales transaction is to use the services of a lawyer that speaks your language or uses a court interpretor or has an assistant that speaks your language.   


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