And what can I do to help it sell.
I have received a few calls lately from clients asking why their house isn't selling. We recently ran a seminar and one of the sections was how to improve your chances of selling you house. So here's a look at the market and perhaps will give some explanation as well as some tips on how to improve your chances of selling your house.
Is the market dead? Most certainly not!
Based on recent activity the market is very much alive and kicking. In August we have sold property and have something like 150 enquiries to deal with, most of them genuine buyers and most of whom looking to buy in the next 3 months. So the market is not dead by any means.
The UK market is very slow and UK buyers are thin on the ground, but as these represent only 5% of the actual market it shouldn't affect the market too much. Those that are looking are bargain hunting. They are looking for something generally below 150,000. Why this figure -I can only assume but I believe that many of the buyers from the UK are people who made their mind up to move to Spain a while ago.
However with the dive in UK market they couldn't sell their houses so they waited. Then they decided they didn't want to wait too much longer so they re-mortgaged their house (I believe June this year saw the highest number of mortgages for a number of years). This means that instead of the £300 - £400000 they were going to have they have between £60 - £100,000 and are now looking at a second home rather than a primary residence.
For the rest of Northern Europeans it is the Dutch and Belgians predominantly with a few of the Nordic countries who are coming down. Those from the Benelux countries are looking for a lifestyle change and tend to be younger families or those not quite ready for retirement who want to earn a small living. They tend to look for large villas with a good sized plot, but prefer to stick close to the beach. Others are looking for larger premises to run as a hotel.
The rest of the market is Spanish. The Spanish are still buying and at least 60% of our enquiries and 80% of our sales are to Spanish people. But they are generally looking at a first time home or a holiday home by the beach. They also don't have much more than 250,000 whatever they are buying.
So if we look at a breakdown of what people are looking for it is roughly the following
- Townhouses and apartments within 15 minutes of the beach - upto 150,000
- Townhouses and apartments inland around 100-120,000
- Beach apartments 1st-3rd line upto 200,000
- Villas by the beach between 200 - 400,000
- Villas inland with large plots to about 300,000
- There is a good market for run down property to be reformed to about 100,000 but most looking for these type of property want a real bargain - ie do some work on it and double their money.
- Hotels and casa rurals - from 200,000 - 800,000 - both by the beach and Inland - minimum of 6 beds
And that's pretty much what we are seeing.
So why isn't your property selling?
The most obvious reason is price. No matter what the market is there are always buyers and any good value property will sell. It is estimated that the market in this area (La Safor Region and Marina Alta) is 30% over priced and based on what we see I would agree in most cases. How do you know if your property is priced right? Well a simple rule of thumb is as follows.
If you have a villa/chalet etc with a plot of land use the following for calculating the value of your land.
- If the land is urbano, inland it is worth between 25 and 80 euros per sq M. By the beach it is worth up to 250/M depending on location (this top price is the price in prime areas like Moraira with sea views) in Oliva it would be about 100 - 130 per m, so multiply the number of metres by this figure and you have a value of the land.
- If it is suelo rustico then it is worth 7-10 euros per M regardless of the house.
- For calculating the value of the house if it is new then it is worth about 1100 euros per M, if old 900, if needing reforms then 500-750 depending on what needs to be done.
- If you have an apartment or townhouse then you multiply the sqM by 1300 if it is new or 1100 if it is old, 500 if it needs a lot of reforms or somewhere in between, Obviously there is a premium for being closer to the beach (like it or not people still want to be near the beach and would prefer to buy there) so add about 20% - 30% for similar properties by the beach (within 10kms). Also if the property is an apartment and doesn't have a lift then take off 20% of this value
This of course does not take into account things such as pools, location, views whether an apartment has a lift (which devalues a house by 10-25% depending on floor if it doesn't have a lift) etc, but will give a rough and ready guide to your homes value. If it is out by more than 10% then you will struggle to sell in today's market because this is similar to the formula used by the banks to calculate mortgage values.
What can you do to make sure your house sells.
You have to work closely with your agent on this one. Most agents work hard to achieve a sale in today's climate but they are let down badly by sellers who claim to want to sell but put so many obstacles in the way it makes it difficult. So what follows is a checklist of what YOU can do to help sell your house.
Before your first visit
1. Clean IT!
When the agent is coming to take photos - do you really want people to see the Junk in the spare bedroom, the tools all over the living room floor and the dogs basket in the kitchen in photos - no of course not - so clean your house before the agent comes to take photos and before every visit. It sounds like common sense but you would be surprised how many people don't and have a "take it or leave it" attitude. Don't be surprised then if the buyer has the same attitude and leaves it.
2. Be available.
There is nothing more frustrating than hearing "No cant do tomorrow got to go shopping" or some other excuse. We get people over from the UK to look at houses and they generally have a few days here. When your agent calls to ask for a viewing - make the time (or don't whine that your house isn't selling). If you cant make it get someone else to do so. Better still give the agent a key. He is working for you to help you sell your house - so help him. Putting it off for two days gives the buyer the chance to see 10 or more houses - so yours may not even get a visit.
3. Take a look at the price.
It is unfortunate that in Spain it is generally the buyers who set the prices - and the agents don't bother to tell them whether this is right or wrong. Ask your agent to do a proper valuation. Or better still pay for a bank valuation. Then set your price below this. Remember the agents commission needs to be added to the price - 3-6% is normal though you may be able to negotiate with your agent. But do you really think your house s worth what you're asking. If it is out by a 5% it may be the difference between getting clients and not. In nearly every case that a house isn't selling it is down to the price - usually they are way over priced but the owner believes that their house is the best - don't we all but take a reality check
4. Time for a change.
Paint the house. If it is a villa paint inside and out. It is a little cost which makes a big difference. It gives the house a clean feeling to it and paint it in bright non offensive colours such as cream or dare I say it Magnolia/Egg shell. Doesn't matter if you like it or not you aren't going to be living there much longer.
5. Get rid of clutter.
Even big rooms can look tiny with loads of clutter around. Just have the essentials you need for living- the rest store in a garage or rent a storage room. Clutter is the second biggest killer of house sales after cleaning.
6. Consider having a makeover done - it can be done pretty cheaply.
A few soft furnishings, well placed pictures and a mirror in the right place, table set as if for a dinner party, plants placed in strategic places - doesn't cost much but the effect is incredible.
Prior to visits
1. Make sure it is cleaned and everything tidied away.
2. Remove pets If you have cats dogs or any other animals get rid of them when people come. Your dog may be a little gem but many people are scared of dogs and wont want to be in there when dogs are present.
3. Also make sure you get rid of the smell of pets before the visitors come over. If you have cats do not EVER let them go into the kitchen (or even the house) when a visitor is there - you may believe they are the cleanest pets in the land - but the visitor wont. Also bear in mind many people suffer allergic reactions to cats - don't lose a sale because of it. Take the dogs out for a walk (don't just chain them up outside because they still bark and can frighten people.)
4. In Summer put the AC on for half an hour beforehand, In winter put the heating on. A comfortable temperature is 21 Degrees. It gives an ambience and people feel comfortable generally at this temperature.
5. Open all doors and windows - unless of course it is raining cats and dogs outside. Make the place look bright and airy - this is a great selling tool - even to Spanish buyers. And make sure all the blinds are open - don't sit in a dark house when visitors come.
6. Make an impressive entrance. The entrance is the first thing people see and the first impression is the most important. Clean the garden, make it tidy, put plants outside the door, make it welcoming. If you live in a flat make sure the communal entrance is clean and tidy, get rid of bicycles and prams from the entrance - a friendly word with your neighbour will be sufficient.
7. Smells. Get rid of any odours. Don't cook smelly foods like garlic or fish just beforehand. It can be off-putting. I once went t o show a house and the owner was cooking something dreadful - it smelt like old wellies and made your eyes water - we were out of there so fast. Shame because it was a nice house.
8. Be cheerful. If you look miserable the buyer will sense this and probably not want to be there. Ideally leave the house when the visitor comes and let the agent do their work. It can be off putting for a buyer having the owner there. It means they cant open up to the agent.
9. Be quiet. Don't ever try and sell your house. That is what the agent is there for. What you may regard as a unique feature and selling point may be someone's worst nightmare. You do not know what the client has told the agent beforehand and your pearls of wisdom may be the very thing they didn't want to hear - so keep quiet unless you are asked a question. Then of course answer honestly.
One of the most annoying things about estate agents in Spain is that they seldom call you afterwards to let you know what is happening. If they don't call you then then call them. Find out what the feedback was. Ask the agent before the visit to inform you of the feedback from the client and LISTEN to what they tell you.
If it is something you can change without problem change it. But always call the agent afterwards - give them a day or so.
Hopefully that has given you some ideas to help you sell your house.