Sell in Spain

I get very cross when we are told how low we have to sell our homes for. Yes the market has been bad but the media and various TV programmes have not helped. So why are the prices so low? Because the agents are desperate to sell. Their high commission rates do not help. 5% + is a rip off. Some do charge 2/3% even that is too high. They are the ones who tell us to sell at low prices. They should be out there selling not sitting back waiting for a buyer to walk through the door. I would also ask the question what qualifications do they have to sell property. I doubt if any of them actually did that in the UK. What knowledge do the have regarding values? The papers are full of adverts for property so it would surely make sense if there is a demand then prices must rise. I say stick to your guns and try and get what you at least paid for your home. Don't give it away. Buyers who say I cannot go above X amount tell them to buy a smaller property further out. I have a friend who would like to sell. She has a lovely 3 bed house on a very nice urbanisation. 7 years ago she paid 250€K. Its on the market for 199K  and the agent told her to accept an offer of 120!!K The house is worth all of 250K and I have advised her to take it off the market and wait. If you factor in the agents 5% commission, fees and taxes plus removal costs to the UK and currency conversion she would be lucky to end up with £75K. What can you buy in the UK for that money a shed in the North of Scotland?  Why bother to sell and give someone else a bargain of a lifetime?
 

It's entirely up to the seller to sell what they want how they want, they just might not sell in the end.

Your choice really.

I suppose that it depends on how quickly she wants to move, Tony. A lot of people much wiser than me don't think that house prices in Spain will rise any time soon. Sad to say but your friend could wait an awful long time for the market to rise to the highs of 2008.

Have to agree that agents do naff all for their money. At the lower end of the price scale they charge a fixed fee of around 4000-5000e. so they get their money whatever. There is no incentive for them to try and get the best price for their clients. They just want it sold as quickly as possible.

Can anyone out there advise which are the most proactive/competitive estate agents?

Regards

That might depend on where you are in Spain, Marke. Give us a clue!

Don't remember seeing the original post by tonydean, but 100% agree with everything said!

"Buyers" generally have very unrealistic expectations these days, a situation which the press and estate agents do nothing to improve. The majority of agents simply tell sellers to drop the price, drop it again, keep dropping it until they're practically giving it away - at which point an estate agent actually becomes superfluous anyway! They're not helping themselves. Very few actually do anything to sell a property other than add it to their website and a few property portals. The few agents who claim to offer more, either require exclusivity, charge over 5% (outrageous!) or want to charge a fee for "marketing" - which at the end of day probably consists of adding it their website, a few portals....

It's a sorry state of affairs, but what really puzzles me is that the Spanish govt. doesn't seem interested in doing anything to improve the market (e.g. reducing transfer tax as an incentive to buyers). A buoyant property market is surely fundamental to mobility of the working population, and therefore to the economy in general?

Oh well...

Hello G45
Yes Polarisworld, Roldan, Murcia.  
It is my understanding that some Spanish estate agents are somewhat lethargic (and some UK ones) so it would be useful to know which are the most proactive, if anyone has any recommendations please let me know?
Kind Regards

marke

In my experience "proactive" and "Spanish estate agents" in this area of Spain simply do not go together and I have never heard about a good one - sorry to be so negative please be careful

Think of the worst proactive UK estate agent you have ever heard of and you might get close to one of the better ones in Spain

When you select one please read the small print of any contract in great detail before you sign as per the recent experience of floella posted on here

http://www.eyeonspain.com/forums/posts-long-21397.aspx

Be suspicious and wary of all - Good luck

There are some very curious ideas being stated on this thread, blaming

~ "agents fees"
~ "the media"
~ "lethargic agents"
~ "buyers with unrealistic expectations"
~ "the Spanish government"
~ "people who want to sell quickly" (!!!)

It's purely supply and demand.  It's a buyers paradise currently and it won't change much until the massive number of properties available reduces.  So don't hold your breath and no earthly point in blaming others!

Marke if you are on LaTorre this guy has been selling a few, the cheapest price property will sell first, so look how much other people are selling at. http://www.murciaservices.com/

Acer: "It's a buyers paradise currently and it won't change much until the massive number of properties available reduces."

That depends on where you want to buy (or if you don't care where you buy). The "massive number of properties available" will never reduce, for the simple reason most of them are sitting comfortably on the positive side of bank's balance sheets looking like "assets", which the banks no longer need to shift. The vast majority of this so called excess stock is also unsaleable at any price because it was built during the boom in undesirable locations with little or no infrastructure. 

Try looking for quality property in good established locations (talking opinions of course, but look at Madrid or Barcelona for example), and you will find a different story. There are some good value places around, but not a plethora and not so easy to find. If the sellers aren't prepared to reduce their price to the silly offers that expectant buyers want to make, then supply and demand won't match and the market won't move. Why does that make it a "buyer's market"? (A nonsense term IMHO). Why must the seller reduce the price, rather than the buyer increase his offer?

Roberto, there will be some sellers who are not bothered and wait for the market to improve, others cannot wait.  So the market will return to normal, in time.  Those sellers who think they can influence the market with ideas posted on this thread are deceiving themselves because when you buy or sell you are acting for yourself, the proverbial "dog eat dog" situation.

But I agree with your comment regarding quality.  IMHO those properties that are special - sea views, on a golf course etc will always have a demand and less likely to hang around too long.

I'm about to buy, again.  Something I told myself I would never do again in Spain.  The property, location and price are superb and the seller is grateful as I'm paying the asking price - but he's pitched it realistically.

But there's the thing, a good property at the market priced will sell.  Those who get stuck in the groove and cannot think beyond what they paid for it will struggle and blame it on others - the agent et al.

I'm not so naiive as to think any individual seller can influence the market by posting on a silly forum, but neither do I believe buyers making insulting offers just because they can will make any difference either. Clearly you are not so naiive either; having found the right property for you, at a price you are happy with, you didn't feel the need to make a silly offer out of fear that someone else on a silly forum would suggest you're overpaying if you don't haggle.

But I do believe that until all (or most) of the unsellable garbage that should never have been built and that's skewing the stats is demolished, the market will struggle to regain any semblance of normality. Simply, the supply of quality property is not what those who demand it at rock bottom prices think it is.

Good luck with your purchase, hope all goes well. 

Nail on the head Roberto. The market will not get anywhere near peak again until the huge over supply of empty properties are no longer on the market.

However, there is no such thing as unsellable garbage. Everything has a price. Currently thousands of properties are being sold every month because the seller is pricing the property to sell. Why would banks want to demolish properties that they can sell for 50 or 60 thousand euros just so other property owners can sell their properties for a higher price?

You are free to ask whatever price you choose, estate agents will give you an idea of what you can expect though. Spain has been overtaken as the cheap exodus by other countries such as Bulgaria, add the terror of demoltion fuelled by the Daily Mail et al, then the flight back to the UK by the disillusioned and you have the current massive glut of houses for sale in the Southern regions. It will be a very long time before prices recover.

With regard to concerns about agents this has just been published in an article from Spanish Property Insight..... at long last a call for greater regulation and reform of an industry where purchasers and buyers alike have felt vulnerable to all too many pitfalls!

______________________________________________________________________________________

"With a general election looming, the General Council of Real Estate Agents of Spain (COAPI) has published a list of ten measures they claim will avoid another devastating bubble inflating in the Spanish property market.

As a professional association, the COAPI have an interest in legislation that favours their interests, and some of their proposals look a smidgen self serving. Unsurprisingly, they call for membership of a professional body like COAPI to be mandatory of anyone working in property sales.

Their proposals to avoid another bubble in Spain are as follows:

1. Greater transparency for consumers. They call for regulations to ensure correct property particulars and accurate descriptions to help inform house-hunters.

2. Financial transparency. The mortgage market should be more transparent and better regulated to avoid the reckless lending that fueled the last bubble.

3. Mortgage valuations. They call for appraisal companies to be made independent of lenders ensuring more accurate valuations for mortgage lending purposes.

4. Register of property professionals. Companies and individuals operating in the property sector should meet certain requirements such as having professional indemnity insurance and professional training, with obligatory registration in a professional register.

5. Party manifestos on housing. They call on all political parties clarify their housing policies in the run up to the election.

6. Special protection. The housing market should be declared a market of public interest, subject to special protection and vigilance.

7. Asymmetric information. Regulation should be introduced to reduce the asymmetry of information that harms consumers.

8. Fiscal coherence. Progressive taxes should support the social function of housing.

9. Professional bodies. Professional associations should be regulated to protect consumers, including codes of conducts and a system of penalties.

10. Official certification. Professional accreditation should be required of everyone operating in the sector to ensure minimum professional standards."

___________________________________________________________________________________

Hope for the future perhaps???

Duncan: "there is no such thing as unsellable garbage. Everything has a price". Well, perhaps. Witness the successful campaigns by some UK councils to sell old homes for £1. However, these are generally inner city properties with potential, and the local councils (i.e. govt.) are also committed to improving / maintaining existing infrastructure in these areas in order to make the properties desirable to live in again. Here in Spain we have entire urbanisations that are essentially uninhabitable and will always be so. Buying a property on one of these places would simply be a waste of your hard earned £1 (or €). "Why would banks want to demolish properties that they can sell for 50 or 60 thousand euros?" Obviously, they wouldn't. But neither would they want to sell them for 50K, when they're valued much higher on their balance sheets and look like an asset. I'm no accountant or economist, but it seems to me that if the banks were to flog off all their stock at less than the amount originally lent for the same properties, they would effectively bankrupt themselves. I think the idea of the "bad bank" was to sort this mess out, but I'm not sure it's worked. Have a look at the banks' websites for property and see if you can find a real bargain. You probably won't, and by all accounts, you can't expect to make a silly offer to a bank and have it accepted either. So I don't think you can blame unrealistic sellers. At the same time, I've seen plenty of very attractively priced properties, which still can't attract a buyer, so what's wrong? Lack of credit? Too much fear? I don't know. 

Hi Roberto, You are right that Sareb don't accept offers under their asking price. I, and others I know, have tried and been rebuffed.

As you probably know, Sareb was formed to take the toxic property assets off the nationalised banks' balance sheets. It subsequently took assets off other banks that had received state aid. The idea was to keep these banks liquid and avoid a collapse in the banking sector. Sareb is 55% funded by private investment and 45% funded by public money. The business plan is to sell off the assets over a 15 year period. We are 3 years into that business plan.

You may have read my opinion on other threads such as Upturn in Spanish Property Sales? For what it is worth, I believe Sareb have now put a floor under the Spanish Property market and prices have stabilised and will bump along the bottom for the next few years as Sareb continue to divest their properties. Over time, their property portfolio will reduce and prices will start to rise. In my opinion prices won't get back to peak for a decade which is roughly the timeframe that Sareb have to dispose of their assets. It is also the point at which peak prices return to meet the long term property price trend.

The reason people aren't buying now is the psychology of fear and greed. They fear prices have further to fall and want to wait so they can get a better bargain. The decade long property bear market perfectly illustrates this. Once it becomes clear that prices have stopped falling and have started to turn upwards, more and more will start to buy. This will fuel higher prices and more buying. The next property bull market.

Market economics and human psychology are very strange things. Most people only want to buy when prices are rising. Most are not happy to buy when prices are low but more than happy to buy tomorrow when the price is higher. Again fuelled by fear and greed.

The only thing you can do is judge whether a property is at a fair price in today's market. Only when a buyer and seller agree on a fair price will a sale be made.

Perfectly summed up! 

When you say peak prices, I guess you mean similar to around end of 2006-2007, when prices were at their highest I think? I wonder if even 10 years from now they'll be anywhere near those levels again? Right now, I see many properties at similar prices to those seen around 2002-2003, before most people realised we were in a boom. And yet, people are still afraid to buy.

DuncanMcG,

It's far from a "selling frenzy"! but sales have picked up noticeably in the past 6 months in Murcia.  It'll probably quieten again until next Spring, but there may be further signs of life then.

I'm not an estate agent (!), so no ulterior motives.  But I just wonder that as several of the previous holiday destinations have become a no-no the footfall of tourists in Spain is likely to increase, which in turn will be good for renters.  Is it too far removed to think this may assist property prices?