The Naked Agent Spain

When buying a property in Spain (or anywhere for that matter), there are some key issues which we tend to overlook. Here are 5 essential mistakes which need to be avoided.  These may sound really obvious, but they are extremely important.

1) Lack of Research

Speaking from experience, I know how much research, time and effort we tend to spend on buying a new car, or even a new pram for our little ones.  Yet for some reason when buying a home, we tend to be less involved with actual due diligence process!  I know when I bought my property a few years ago, I decided in less than 24 hours!  Did I conduct all the necessary due diligence? No, not really, but I wish I had. Don’t get me wrong, I love my place, but with a little more research I may have done things a little differently.  Do I wish I had known what I know now – for sure.

Now, in the tough current climate, as buyers, we are all being a little more prudent, and so we should.

When researching which property to buy we need to consider the area, builder, developer, construction quality, management company, licences/legaity, community rules etc and unless you are satisfied, do not proceed.   Check which agent to use in your local area.  Ask around, and you will soon get a feeling of who to work with.  I always say use a local agent as they are the ones with the local knowledge, and this is a key part of your research (as well as the internet).  Check out prices of comparable properties, and ask plenty questions on your viewing trips to see whether you feel you are getting a realistic picture.  The market is now ideal for picking up distressed properties, so with good research and a good agent, you could find a very well priced bargain.

2) Getting bad financing

I think a few of us in the past have been caught up in financing or mortgage deals which on the face of it appear great, but when you dig a little deeper (and often too late), you realise this is not exactly what you had wanted to sign up for.   Our ebook, Your Stripped Down Guide to Getting a Property and Mortgage in Spain, covers all the points you need to look out for with the banks (interest rates, bank charges, opening commissions, valuations, types of mortgages, cancelation fees, mortgage taxes etc) and what questions to ask. Two chapters of the book  are dedicated to providing you with a step-by-step guide as how to calculate and obtain a mortgage which is right for you and your wallet.  The mortgage calculator on our site will help you calculate your approximate monthly payments and assess your budget

Banks in this current environment aren't as lender-friendly as they used to be, but if you shop around, they are still keen for good business, so if you have your paperwork in order, you can negotiate to get the best deal for you.

3) DIY Conveyancing

It is so important for you to find a good lawyer to help you with the property conveyancing process.  The ebook, mentioned above, will talk you through all the points you need to cover for conveyancing (checking the nota simple, title deeds, mortgage deeds, licences, title, community fees etc, but it is to be used in tandem with good sound legal advice.  The book gives you the tools and shows you what issues you need to watch out for, so know when you meet your lawyer you which main points to check on. (Knowing this info also puts you in a better position when negotiating the final price).

4) Under-estimating Your property expenses

Buying in Spain, is costly, with charges being anywhere from 10% to 15% of the purchase price depending on whether you are taking out a mortgage not.  You can learn about the exact expenses to include in our ebook, but the main point to take away here is to ensure you budget for them and understand them before you start looking around.   There are so many cases of people finding a property they like, only to find out that once they have added the costs on top, they can no longer afford it.  Worse still –in some case people have actually paid non-refundable deposits, oblivious to fact that there will be additional charges.  Your agent should  cover all of this with you on day 1, but it I always better for you to be prepared

5) Over Paying for your property

This goes in line with the first point I made about research.   It is easier said than done though…and in this market what is a fair and realistic price anyway?

The main thing is to compare like for like properties if possible, and to ask around at banks and agents for some of the ‘distressed’ properties.  Ensure when you get a price you compare the actual size of the unit (m2), plus terraces, land, parking etc rather than just focusing on the number of bedrooms, so you get a price per square metre. This will start to give you a feel of  the value of similar style properties.  Many developers, in recent times have tried to squeeze 2 bedroom units into what is effectively the size of a 1 bedroom property, so always look at the exact floor area being sold.

Well, that's about it for today.  Enjoy the start of the weekend.

Adios  y hasta pronto

Click on the book to get your copy today.

We all know Aifos has been battling with its creditors over the last 12 months or more, and many of us (including many of the people on this site), have been stung one way or another by a company who has not seemed to deliver on its promises over the last 2 years.  Many people are in current talks with their lawyers to see how they can get their deposits back.

According to recent media reports Aifos has recently filed for Bankruptcy protection with the courts in Malaga.  This in itself is no surprise, and not new news to many of us, but what is astounding is the fact that the company may have more than 1 billion euros in debt which it still owes to some 15 or more creditors.   Bankruptcy protection may in theory help them deliver on their promises and ensure the delivery of the projects which are are still under construction (some 3000 properties), and safeguard some of their staffs jobs, but time will tell.  

Aifos are also owners of the two luxury Guadalpin Hotels in Marbella and Puerto Banus, both of which are bing handled by the receivers or the administrators, after the creditors forced them into adminstration earlier this year.

Let's hope there's a 'swift' resolution, but Spanish courts are not renowned for their speed in dealing with matters of this nature.

According to some recent press reports, Sir Alan Sugar has just bought the luxury Hotel Byblos in Mijas.  The property, which had previously belonged to the 'infamous' Spanish property developer Aifos, had been put up for auction, after the Spanish property group had defaulted on its payments to its creditors.  Sir Alan acquired the property at auction through his Spanish property holding company for an amazing bargain of just under 3m Euros.  The property is said to be valued at around 39m Euros, and seeing as valuers are tending to be slightly more conservative with their valuations at the moment,  this deal looks like one of the best property bargains of the year! It is unclear whether he will take on any of the debt (if any) associated with the property, but either way it is a great purchase. Reports suggest the deal will be completed in the coming weeks, so we'll watch the space carefully

Adios por ahora.