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Check out some of the crazy prices now being listed on Eye on Spain and you can see it really it a BUYERS market. Nothing wrong with the properties or the area, just a natural flushing out of the system. Mainly sellers who have overstretched or tired or the whole spanish property scene. Some are selling at 75-100k less than they paid. Forget what Bank valuations are saying - just ask for proof of what the Buyer paid originally. Remember, never trust Spanish banks, lawyers or their valuations. Just look at what was paid on the escritura. Current bargains - Majestic Hills, La Quinta, Los Arqueros, Soto de Marbella - all quality product.
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So Byron, you bought already ?
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Byron, dont you think that these Spanish valuation should be challenged? As they are misleading people into thinking they have invested into a property?
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What do you need MONEY for? Didn't I just read on another thread a really great idea about buying 2 - the rental from one will pay for the other? Mfaw mfaw!!!!!!!
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"Get your facts first, then you can distort them as you please"
Mark Twain
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Ive a better idea, buy 5 and sell on 4 to pay for the first one you want to keep.....!
Org, bank valuations have their use as they are at the moment the only benchmark one can use. A bank will lend you a percentage against that valuation, but not a percentage of what an owner is askeg for a property - big difference here to the UK or Ireland, but my thinking is they will start to cahnge to a comparison system - in the UK years ago the same scams were possible with people gaining finance for more than the actual purchase prices. Its pretty much stopped now unless you use a crooked broker, lawyer and agent together, and even then its not that easy any more.
Here they value by euros per square metre, irrespective of views, orientation or actual purchase price. As black money is being stamped out now, the price shown on the escrituras will be exact and so more definate valuations and comparisons will be available in accordance to what some one actually paid for their property
This is turn will stamp out the buyers who get all the purchase price via finance and so less people will actually buy in Spain as investors never want to put their hands in their pockets to buy something that is effectively a business deal ie buy-to-let style.
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Quite frankly m'dear, I don't give a damn!
www.herbalmarbella.com
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A question for Rixxy/Roberto ( who I think are agents) ?
A friend of mine selling on costa del sol has been quoted 5% commission. Can I ask if this is too high or is it reasonable ?
Thanks
Helen
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Hi Helen,
5% + IVA, is the norm for my area, Murcia Costa Calida. The CDS can vary depending on how expensive the area is. Puerto Banus agents may charge more than Torremolinos for example. Any agent in CDS offering 5% sales fee sounds reasonable compared to a few years back when they would put 10-20% on top of the price the vendor wanted. It is a sign of the times, along with lowering bank valuations that agents are looking to take 5% from the vendors price rather than adding it on. I´m not sure which is worse for vendors, seeing an agent make 20% more than your price or having to pay them 5% from your price. Roberto isn´t an agent, but does buy and sell property for himself, he is very knowledgable and experienced, more so than most agents. Rixxy is on a different side, generally in auctions (as seen on TV). I know she doesn´t really like agents, though she will "snog me" when we meet. ;+)
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Gillespie said: "Roberto isn´t an agent, but does buy and sell property for himself, he is very knowledgable and experienced, more so than most agents. Rixxy is on a different side, generally in auctions (as seen on TV). I know she doesn´t really like agents, though she will "snog me" when we meet. ;+)"
Hey, Gillespie, keep those compliments coming and I'll snog you when we meet
The 10-20% commissions you mention I think really only applied to new developments and certain large cowboy outfits that mostly are no longer around, thank goodness. Personally, I have never come across any self respecting local agent who tried charging more than 5%. But 5% is usually deemed to be the "norm".
However, in the current climate, there is unlkely to be an agent who is unwilling to negotiate on this. It may be a "buyer's" market in some respects, but sellers should also be tough, and ask for either a fixed fee or a lower percentage, for example 3 or 4%. If the agent says no, move on to the next one. But of course, you have to bear in mind that the agent offering you a good deal, may not be there tomorrow!
If your friend is anywhere near Torremolinos, I am happy to offer recommendations.
_______________________
"Get your facts first, then you can distort them as you please"
Mark Twain
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You guys obviously dont live in Marbella. Here we are in the "eye of the storm" A lot of agents are simply refusing to take on new listings e.g. Andalucian Dream Homes. Others are virtually wiped out e.g. VIVA (no offices left open) and still others have ultimate offensive strategy e.g Engel & Volkers- "we will only sell your property for 7.5%" - typically arrogant Germans. For those of you who are not aware of what is happening in Marbella - this is the reality. I should know as I am trying to offload 2 properties here, one at 75k less than I paid 3 years ago. With the scale of the Pound/Euro depreciation, the Brits are finished here - witness SUR (in Spanish) all this week promoting Marbella´s close ties with Germany. The Spanish are scared shitless as they know the Brits will go to Croatia or the USA this year. In a market where those of us who really neeed to sell are faced with such attitudes, anyone paying an agent over 5% is mad. You wouldnt want to be an estate agent in Marbella at the moment - Auto da Fé - for those of you who know a little Spanish history.
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Byron, I'm sorry to hear about your difficulties, but I have to admit that to read that the Spanish are "scared sh*tless as they know the Brits will go to....(somewhere else)" brings a smile to my face, as for too long I believe there has been very much an attitude of " we've 'ad yer money, now F off." I witnessed this in Mallorca, where the authorities did their damnedest to kill off all foreign owned businesses and imposed a tourist tax for all foreign arrivals, and then wondered where the tourist money went (Croatia probably), so if they are now worried that British investors are looking elsewhere - good!
Spanish history (or any history for that matter) not my strong point. Care to elaborate on Auto da Fé?
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"Get your facts first, then you can distort them as you please"
Mark Twain
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Thanks Roberto. Yes, the Mallorca analogy is interesting. Prices there seem to be very strong, but probably due to the fact that it is a major market for the Germans, who will never discount their properties (but they discount everything else!). The lack of over development also helped, but to me prices in Mallorca and Ibiza are way too high - but also fuelled by the Catalans who holiday there and not Marbella, where the Madrileños holiday (for those who didnt know this - there is still pretty much a mutual hatred between Madrid and Barcelona - even to the point of where thy go on holiday).
During the Inquisition during the 1490´s when Catholic Spain retook the country from the Islamic Moors, they also set abount a slaughter of Jews who just happened to be there historically and who were very good at making money. So everytime they found some Jews, they would round them up, denounce and torture them and burn them at the stake in the main plaza. This event was known as the Auto de Fé. Many of the Jews fled to Portugal and back to the middle east and were known as Ladino´s. You can still hear Spanish spoken in places like Istambul and Jerusalem and Flamenco is also found in there. If you want to hear some Ladino singing (a mix of arabic/flamenco), check out the beautiful Yasmin Levy on the web. I could see this practice becoming popular again for the tourists to witness, if Estate Agents were hounded out of Spain. I rather fancied myself in the role of Witchfinder General!! (if you remember that old Vincent Price film).
Cheers
Byron
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Here is the answer to the gripes about commission rates:
Sales agents work for commission only. On average they earn 20% of the total commission, which in most cases is around 5 to 7.5% of the sales price. Of that, they pay 16% IVA, 15% IRPF and social security. Their cars, phones, entertainment of their clients etc comes out of their pockets. The rest of the commission goes to manager overrides, overheads of the company etc. If the company sells your property through another agent, as a lot of them do, the commission is split.
It costs a company an average of 4.000 Eur. to get a client touring with them to show properties, and with some luck, 30% buy.
An agent gets 20% of 10% commission on most off plans, and of course will go there first. Bottom line: The lower your commission, the least chance of selling it to an agent controlled client. If a vendor wants to pay less, the best route is try a private sale through the internet etc.
_______________________ Robert H
Marbella
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"Bottom line: The lower your commission, the least chance of selling it to an agent controlled client."
Robert, good post! This maybe helps explain why many large agencies charge such seemingly high commission. And also explains why so many of them have gone to the wall recently. The small, independent agents are able to work for lower fees because they don't have such high overheads and don't have to pay sales reps a % of the fee. Of course, a private sale is best for everyone if at all possible, but in my experience, your best chance of selling, or finding the right property, is with a local "independent". It will be interesting though to see how they cope with the new stricter regulations that are likely to make things tougher for them.
By the way - "agent controlled client"?? Sounds like some sort of automatom!
_______________________
"Get your facts first, then you can distort them as you please"
Mark Twain
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Exactly, the large companies were and some of them still are based on a large and expensive commission override system. After all the money has been paid, the company is actually left with not that much of the original amount. So they have to sell loads, and hence the old off plan scenario. Small prodessional agents also do all the footwork. (Notaria, Notas simples, registros, catastral etc.) whereas the big companies has staff for that, so the agent only has to sell. Agents in large companies are often unfamiliar with Spain, do not speak the language, and have been here maybe some months with luck. They often create some grief and off they go to Thailand/Dubay/Brazil/Turkey/Bulgaria.
The best advice I can give is, if you are unfamiliar with the system, first read You And The Law In Spain by David Searl. Then, at least you are somewhat better informed. Then, shop around, and look at as much as you fancy. Don't ever fall for the age old Urgency lines like 'My colleague is showing this very apartment this afternoon,'
Look with different agents, as there are some very good ones, as well as some very shoddy ones. At least you get the feel. And always get a lawyer who is not recommended by any of the agents. They get kickbacks from referrels.
_______________________ Robert H
Marbella
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Org, bank valuations have their use as they are at the moment the only benchmark one can use. A bank will lend you a percentage against that valuation, but not a percentage of what an owner is askeg for a property - big difference here to the UK or Ireland, but my thinking is they will start to cahnge to a comparison system - in the UK years ago the same scams were possible with people gaining finance for more than the actual purchase prices. Its pretty much stopped now unless you use a crooked broker, lawyer and agent together, and even then its not that easy any more.
Rixxy, thanks for the reply. What if a purchaser was misrepresented into buying a propery which literally drops 100,000 euros in one year from the bank valuation? Over here in England now a widely used and advertised property company called Inside Track has gone bust due to well over-valued valuations and low rental capacity/prices which were not covering mortgage repayments. The purchasers are now suing the company.
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Most banks use independents to do the valuations. Often these are very detailed, but it helps to bring along some printouts of similar properties for sale in the same complex. Take along the higher priced ones, and if you have a good view and orientation, do point it out to them. It does make a difference. Other than that, there are some guidelines of what properties are valued at on the main tasadores websites like Tinsa.
_______________________ Robert H
Marbella
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Hi Org - yes I know the company!!! Tough one as one could not really expect to be sued for market forces. However, if there were guarantees in writing and that sort of thing then misrepresentation comes into it. The finance that would have been used would have been from a financial institution which would have used in turn an independant valaution company, so at that moment in time, it all stacked up.
Banks now are themselves downvaluing properties some by huge amounts and one has to ask the question as to why! If its a comparable valuation based on ACTUAL selling prices, then fair enough, BUT its not, is euros per square metre. How can that change??? Did it somehow get smaller???
Banks are frightened to lend and the big valaution companies are just as guilty in all of this - they all just inclreased prices by overinfalted rates, now they cry wolf!
Hey ho!
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Quite frankly m'dear, I don't give a damn!
www.herbalmarbella.com
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Rixxy I'm a bit confused as well on Actual Valuation is this the price the purchaser originally paid or what the bank valued it when the person first took out the mortgage? If so than if you bought a property many years ago it would have an actual valuation much much lower.
thanks Rob
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Decided after all I don't like Spanish TV, that is having compared both.
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A costa Almeria question im afraid :)
Im due to complete on a property in Almerimar. Trying to decide what to do and have heard others talk about valuation per sq meter. In real terms, i guess im asking if I were selling right now, what value per sq m should I use to realise a value for my property? If views etc matter its 3 bed 2 bath in just about the best location....
Is there a difference between living space and balcony as the balcony is quite large.
Thanks,
Brian
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