I had an email from someone the other day, let’s call her Ruth for the purpose of this article, which made me realise that there are still many people that don’t understand some of the “usual” tactics used by estate agents in Spain. I’ll come back to Ruth in a minute.
I have also been reading various articles on other Spanish property websites which talk about the doom and gloom of the Spanish property market. Whilst some of it is true it really depends on how you look at things, what’s one person’s loss is another person’s gain. Is the glass half full or half empty?
OK, so what am I getting at here? Let’s get back to Ruth’s email. She’d seen the details of a development on an agents’ website and upon enquiring as to availability the agent told her there was just one property left….and she better hurry as it won’t be on the market for long. Really? How many times have we heard that!? Yet Ruth, getting all excited about buying her dream home in Spain got totally sucked in and emailed me asking if I knew about this new development and could I be quick as there was only one property left…she was just about to put her deposit down!
I respond politely (as I always try to) and informed her that there is no such thing as “just one left”. There are always resales available on any new development. In fact, there are resales anywhere and everywhere. As she hadn’t even been out to view the development I advised her not to part with any money until she’s spent some time really researching properties, locations, facilities, agents, etc. In fact, I can’t even understand how anyone would consider buying a property abroad without even viewing the area first.
This leads me on to the “doom and gloom” articles. I don’t want to mention which websites have published these articles (but I know why they have done so) but the people who write them live in Spain themselves and it’s the real estate industry that earns them their money. In fact, without the “doom and gloom” they wouldn’t have a business.
Now, I am by no means a property expert. I don’t invest in property myself but I have spent the last year researching and viewing properties in my area for personal reasons. I also read ALL the Eye on Spain forums every day and talk to many agents on a regular basis. Therefore, this is my take on the state of the real estate market in Spain today…
If you’re a new buyer then you’re laughing. If you’re a seller…well that’s a different story. It really is a buyer’s market at the moment. There are just so many properties on the market at the moment that you can literally be fussy, take your time and haggle. Nobody needs to be rushed into anything…not even Ruth. There also seems to be a huge discrepancy in prices, especially with some people selling off plans for less than the developer’s current prices.
Buyers also have more information at hand available to them than ever before so that they can truly understand what’s involved and not make the same mistakes as those that went before them. If you’re looking to buy off plan, which less people are these days, you can check what’s being said about that development on Eye on Spain. If it doesn’t sound good walk away. You can check up on individual developers on forums, read articles on just about anything to do with buying in Spain and read stories from people who have already done it. I don’t think these days anybody should say “I didn’t know about that”. There is information overload on the Internet and it’s all free advice.
For any buyer the main piece of advice I would give is to do your own market research. Make sure what you’re going to pay is reasonable for that property. Check on various websites to see what resales are available on a particular development or area. There are so many properties available in any area that you have to make sure you don’t pay over the odds for one.
I was talking to a friend the other day who’s an estate agent and last month, which is normally the quietest month for real estate agents, he told me that he was really busy! Busy listing properties for sale. There are just so many. Have a drive around and look at the number of “se vende” signs you see. But why are there so many?
Investors. Two to three years ago when the market was really buoyant many investors bought handfuls of properties hoping to sell for huge profits now. But too many developments and too many investors have saturated the market today, particularly two bedroom two bathroom apartments. If you want a bargain then look for these “distressed sales” where investors are desperate to sell. There’s loads out there. Ruth, take note.
So for those looking for property things couldn’t be better. What if you’re a seller?
If you’re a seller the market’s tough, very tough indeed. Talking to agents they always tell me the same thing, “anything sells at the right price”. Probably true but many people are still reluctant to walk away without making any money, or even a loss. Yet they’re stuck with properties at unrealistic prices. At the end of the day buying a property as an investment is just that…an investment. You take a risk, sometimes you gain and sometimes you lose. It may sound a bit harsh but I don’t invest in anything myself which I couldn’t afford to lose. An investment property is no different.
Now for the compassionate part…
My heart truly goes out to all the honest and “everday” people who have used their hard-earned cash as a deposit for an off plan property only to have their dream ruined because developers cannot for some reason just build on approved land. Spain is a huge country, why the need to build on protected land? Why build without the proper licences in place? There is surely only one answer to this…greed. Greedy developers and greedy mayors (many of you will already know I don’t like mayors very much).
The problem is that it’s always the “ordinary” person that loses out here. We get hundreds of emails from desperate buyers every month. Some have put in over 30,000 Euros only to find that their development has been stopped because it’s being built on green land. Will they get their money back? They should do but they’ll probably have to fight for it and they’ll probably lose money in the process.
One of the worst stories we heard about was a development in Mijas where even the bank guarantees were fake. When the developer went bust those that had put their deposits down lost it all.
It’s these ordinary people that I really feel for. These are the people that we want to help as Eye on Spain and we have some ideas on it for this year…more about that coming soon!
At the end of the day most people actually have no problems at all with the purchase of a property in Spain. In fact a survey that we carried out recently showed that 75% of people were more than happy with the whole buying process. The “happy” people rarely contribute to forums telling everyone how well their purchase has gone. You generally only hear about the bad things that happen and bad experiences.
So, doom and gloom? If you’re a seller then perhaps yes. You’ll need to be realistic about the true value of your property if you really want to sell it.
If you’re a buyer then be happy. This is your year. Doom and gloom? No way. There’s never been so much choice. There are some great properties around at some great prices. Ruth, take your time, look around, do your research, there really is no rush. There are some good agents in Spain it’s just that some spoil it for the rest of them. It’s a buyer’s market out there….go get it!