The Free Property Inspection Trips to Spain – Warts and All.
In my experience snagging new properties for clients in Spains Costa Blanca, Calida and Murcia I regularly come into contact with sales reps and managers working for the multitude of estate agents who operate free or subsidised property inspection trips. I deal with clients who have either fallen for some of the sales tactics or “untruths” and the truth often hurts, sometimes financially. This article aims to furnish clients with some of the facts, so that they are armed with some information before they make a huge financial commitment.
Of the nearly 60,000 people each year to leave the UK and head for the sun drenched Spanish shores nearly 20,000 of them do so having been on a free inspection tour.
There are a multitude of companies covering virtual all areas of Spain and employing a variety of sales methods to get you to part from your hard earned cash or perhaps more importantly get you to release the equity that you hold in your property. The one thing that hey all have in common is they need leads / clients / tours / bums on seats / cannon fodder.
Some companies are backed by large corporations, such as banks or developers; some are no more than jumped up UK high pressure sales companies who are trying to make a quick buck in a new market.
The tours often include he following.
Return flights for two, Luxury 4 star hotel accommodation for 3 or 4 nights, Breakfast in the hotel, Evening restaurant meals, Use of liveried company car and tour guide (aka sales person).
THE MARKETING TRICKS. – Gaining your attendance.
These agents market in decidedly different ways:
Some spend fortunes on glossy magazines, with artist’s impressions of your dream off plan property. These pictures in themselves can be very misleading as they often have the sea in the background but in reality they are 10 km inland. They will show lush green gardens with not another property in sight, yet in reality and under much closer inspection the partition wall is 1 metre from the house wall and the development is virtually a new town being built – a wall of white washed euro boxes as far as the eye can see. The lush green garden will be the remnants of a builders site covered with an inch of topsoil. Beware when digging holes as a sprained wrist is a real danger.
With some agents you will receive a phone call one evening. That competition entry form that you filled in at Alicante / Murcia airport the last time you were on holiday could lead to a series of calls to gain your attendance over in Spain. As these companies get more desperate for clients you could find yourself at the end of a phone literally days after you returned from holiday. These telesales operators have been know to call clients into submission, getting them to fly over just to stop the persistent nature of the calls. Of course there is no point in calling the Telephone Preference Service as the calls originate in Spain and are out of their jurisdiction.
Some agents spend tens of thousands advertising on the TV. “Our property experts are flying in this weekend to share their experience of living the Spanish dream. They will be at the Jubilee suites at the Anytown football ground / racecourse / hotel this weekend”. Sure enough when couple arrive there are a team of informed reps that do infact live in Spain and do fly in each week to a different part of the country to spread the dream. They also include a financial expert and a credit card machine and an internet connection to book your flights. The trick here is that although the flights are free or subsidised you have to pay for them on your own credit card initially for “security” reasons and your money will be returned in full when you touch down in Spain and paid in Euros to give you some spending money.
Another marketing method that the agents have been trying is called the home visit. A practice developed from the double glazing industry, where the client is called and told that an expat property expert is in the area for the next couple of days and rather than come to our offices, they will come and see you in the comfort of your own house. “Allow an hour or so and they will answer any questions you have about relocation, holiday homes or investments” is the pitch of the telesales staff. The salesperson or relocation consultant as they like to be known will in true style stay as long as it takes.
One of the sneaky sales tricks that they use is just before they arrive the salesperson will drop a call to their manager to say they are going in to the clients house, a couple of minutes after they have been sat in the house don’t be surprised if your home phone rings. I will be the salespersons manager ringing to falsely state that the reps previous clients have been awarded a huge flight subsidy and there is only one subsidy left for the month…… creating a little urgency in the client for fear of missing out.
This is a tactic used in double glazing or timeshare when the salesman states that this offer is only available today and tomorrow the product will cost thousands more. As soon as any interest is shown the rep will have their laptop open and be booking you flights. They will then push you to travel at a time that suits them rather than you by offering flight incentives, these also tally with the commission that they earn. As an example of how much these companies make out of sales, the home sit rep can earn €50 for just turning up, €1000 for booking you (subject to you actually turning up) and a further €1000 should you buy.
Of course the point of all these methods of marketing is to get your bum on an airplane seat and out to Spain with the minimum delay. Do not be surprised that if affordability in Spain is an issue, they will try and sell you an apartment in Bulgaria or Turkey and if finance is again an issue they will stoop as low as selling a plot of land on a barren coast in Brazil that you can pay for on the spot using your credit card.
The rep that you meet in your house, on the phone or at an exhibition is without doubt a self employed commission only salesman who will furnish you with all the details you wish to hear and non of those that you don’t. It is very common practice for these companies to employ their staff on self employed, commission only sales positions. This of course is much cheaper for the company, they can let staff go with little prospect of any legal comeback and without paying their back commissions. The reps themselves are hungry as they need to sell to earn, which can lead to some hard sell tactics being employed to gain the sale. Please do remember however that if you are going just for a look or as some people have done on a “fag run” that these reps are working from 9am to 11pm for free!
Some companies offer completely free flights as long as you travel when they want you to. Some will state that the cost of the flight will only be £50 and they will subsidise the rest and some will subsidise the flight to the tune of £50.
As the market tightens and more and more of these agents disappear the degree of generosity diminishes at about the same rate as the exchange rate. This should be taken as a warning as the agents need there pound of flesh and as fewer clients travel in the first place and even fewer of them purchase the agents need to extract every last euro from the few remaining purchasing clients.
Now I have covered some of the marketing methods, I will cover the actual inspection tour in some detail. I am not quoting one company but a mix of all the companies; however you will find that they all offer virtually identical experiences. I am using experiences gained personally, from ex reps and sales managers and from employees who still work for several of the big agents on the Costa Blanca, Calida, Murcia and Costa Almeria.
FRESH OFF THE PLANE.
I have written this section of the article with the assistance of personal experience in the industry, having personally undertaken an inspection tour, family and friends who hae toured and most importantly experienced sales reps who still work in the industry, so they have no axe to grind but perhaps their conscience got the better of them. The only remuneration they received was a couple of cafe con leche’s each. The surprising thing was that I had arranged to meet two reps but when word spread half a dozen arrived with offer from many others.
Your tour should proceed along these lines. Show homes are close on Saturday afternoons and all day Sunday and flights are more expensive over the weekend so most tours tend to be during the midweek. Tour duration is normally 5 days 4 nights. For the purpose of this article I have formatted a Monday to Friday tour.
A couple of years ago a trip to the arrival lounge at Alicante or Murcia airport would have seen you rubbing shoulders with dozens of agents sales reps / salespeople / property consultants / tours guides ( I will call them reps from now on) all standing there with their clipboards with their clients names printed on them, often looking nervously as passengers came through the sliding doors. Similarly a trip down the coast road from the airport you would literally pass dozens of agents cars all brightly liveried and each company with its own colour cars. The credit crunch has killed off the numbers but made the agents need to extract every last euro from clients almost an art.
Your rep will great you with a big smile and engage you in small talk as they walk you back to the car. The reps should also take the luggage off you or at least the wife. During the journey back to the hotel it is taboo for the rep to talk about property for fear of the client feeling under pressure. What the rep is doing here is selling themselves, after all who would buy off somebody that they either did not like or did not trust? Your rep is sticking strictly to step one of the seven steps. The holy gospel of the rep which is drilled into them from day one. The steps are as follows and I will refer to the as we progress. I will shortly be writing an article solely covering the seven steps in much greater detail.
1. SELL YOURSELF - Make yourself likeable to your clients
2. SELL THE COMPANY - We are established, trustworthy, large, family run, UK based….
3. SELL THE AREA – Sell the lifestyle, pace of life, cost of living, health, beaches ……..
4. SELL THE PROPERTY – Once sold on the lifestyle find the property within budget.
5. FINANCE – Sort out loans, mortgages, affordability etc.
6. CONTRACT – Complete a property purchase contract and get €3000 deposit.
7. CONSOLIDATION – Introduce to solicitors, open bank accounts and look after them.
When you rep gets you to the hotel, they will jump out of the car and open the door for you, they will get your bags and check you into a very swish 4 or 5 star hotel on the beach with stunning views (see # 3). Once they have checked you in they will take you up to the room, open the door and take you in. You will often find that the curtains will be closed in the room. This is an arrangement that the agent will have with the hotel. This enables the rep to do the great reveal. They will walk to the window and pull the curtains back with gusto revealing a beautiful view of the beautiful blue Mediterranean Sea. Having just left a grey, miserable, cold, wet and windy UK, this reveal makes the client feel that they have found heaven.
Most clients arrive late afternoon, so the rep will leave you for a couple of hours to rest and come and collect you for dinner (the tour will include all meals). The rep will still not be speaking about property, they will, still be selling themselves and the business. They will tell you about how they came to live in Spain, how great it is, how their kids love it…… this is undoubtedly true as I am willing to testify but it is all part of the sales process. The rep will also start telling you how great the company is and how good they are to work for and how well they treat their staff. The truth is that they are all non contract, commission only sales people who are in fear of their jobs from tour to tour because if they do not sell and hit targets they are out! The rep will also outline the itinerary whilst you are with them:
Monday: Arrive, settle in and go for dinner.
Tuesday: Pre tour meeting and area tour, go for dinner.
Wednesday: Look for properties in areas you have expressed an interest in.
Thursday: Continue search, or if purchasing complete contracts, payments etc.
Friday: Continue search or if purchased, consolidate and back to airport.
Following your nice evening meal you will be dropped off at the hotel and arrangements made to meet you in the hotel reception at 9:30am the following morning. As they leave the rep will be on the phone to their manager telling them what they think of you and the likelihood of you purchasing. You will be graded as red, amber or green or on a scale of 1 to 10 as a prospect with red or 1 being no chance. All clients start as amber or a 5 on the scale.
A good hour or so before the rep collects you on Tuesday they will have a breakfast meeting with their manager where they will discuss in great detail their impression of you. The manager will produce all the paperwork that they have on you. This will be notes and transcripts of conversations that you have had with the companies telesales staff, or the home visit rep or even with the manager when they called to confirm your attendance a couple of days ago. All the questions that you have been asked no matter how innocent have the intention of garnering as much information as possible. This meeting that the rep ha with their manager will determine the course of action that they will be taking with you over the next few days!
The rep will come and collect you on time. They will be in their uniform, light pants, either white or blue shirt/blouse, brown shoes, sunglasses and immaculately clean company car (the cars are inspected each day and reps fined €50 for dirty cars). Your rep will then take you to a lovely café by the beach, or on a golf course or with fantastic views. This helps sell the lifestyle, but the choice of café is determined following your conversation the previous evening when they gleaned the information out of you to make this choice.
The purpose of the meeting is to determine what you are looking for i.e. holiday home, relocation, investment or business, your budget and your preferred location. The rep already has this information as this information has already been obtained from you when you arranged the trip in the first place. The one thing that the rep will do is promise never to show you properties above your budget, they will site affordability issues however the truth is that people who over extend when in Spain are 4 times more likely to cancel when they get back to the UK.
Meeting over you will jump in the car. One thing to note here is that the rep will always have a cool box or paperwork on the seat behind them. This means that the clients will sit in the passenger seat and the seat behind. This stop them being able to make eye contact with each other, communicate without the rep hearing and the rep will be able to see the client in the rear view mirror.
The day will be spent completing an extensive tour from Alicante in the North to Cartegena in the south and up to 50km inland. You will visit town, villages, beaches, golf courses, mountains, you name it they will cover it. Anything or place you express an interest in will be noted for use later. If you like a particular village or beach, they will stop for a look around or a coffee. Although you do not know it you will be following a pre determined route aimed at showing the area in its best possible light.
Whenever you do stop the rep will be glued to your side at all times. They do not want you talking to the natives because they may tell you something that you do not want to hear (i.e. how much commission the agents charge/make). The rep will always seat you away from other people, never at a café with free papers (other agents advertise in them) and never near an estate agent window because invariably they could have the same properties for sale for considerably less money! (most properties for sale are on with many agents).
Following completion of your area tour you are returned back to the hotel at 6pm, some 8 ½ hours after you were picked up and informed that the next couple of hours are your own and that the rep will pick you up at 8pm for dinner. As a parting shot the rep will warn you about “bar stool Johnny’s”. They will tell you to be suspect of anyone who approaches them in the hotel bar or foyer as they could be a con merchant who will know that they are on an inspection trip and will coerce them out of thousands of euros. There may be a modicum of truth in this, however its main reason is to stop clients talking to each other and comparing experiences. One rotten apple can spoil a barrel….. You will be picked up at 8pm and taken to a nice restaurant for a three course meal and wine and taken back to the hotel at 10:30pm. You have been with you rep for 13 hours.
Following the extensive and tiring area tour you will be hoping for an easier day today. Your rep will collect you again at 9am fresh from a debrief with their manager where the plan of attack will have been drawn up. Today is all about property, after all, this is the third day you have been in Spain and you have not seen any property yet.
There has been a lot of thought put into the art of showing properties. The rep will have listened to your preferences and listened to your opinions when on the area tour. You general chit chat will have been noted and the answer to innocent sounding questions during dinner will have been noted, analyzed and actioned.
When you arrive at a property you will be brought in on a route that shows the property and area to its best. The show home will be immaculate; it will be on a nice big plot or have great views and will invariably be the most expensive plot on the site. The show home will have been dressed by a designer. Your rep will now take you round room by room, telling you what is included and what is not, what the payment structure for this particular developer is
You will never be shown the best property first. The first property will often be chosen because it does not match many of your requirements. You will be asked for your comments regarding, size, location, views, rooms etc and asked to score the property on a whole out of ten and the area out of ten. If you score the property highly and area poorly we need to look at similar properties in a different area. If you score the area highly and property poorly, we need to look for different properties in the same area.
The rep should note your thoughts, comments and scores and move on to the next property based on your requirements.
Amazingly the reps I spoke to stated that if somebody was genuinely interested in purchasing that they only ever showed 3 or 4 properties before they found the perfect place.
Do not be surprised if at some point during this day that the reps manager accidentally bumps into you either in a show home or at a café somewhere (those furtive phone calls the rep makes or receives when they slope off out of earshot are the management gauging the progress of the tour. If you hear the rep saying amber or green you might know what they are talking about now). The manager is there to check on how well the tour is going, check up on the rep and try and point the clients in a new direction should they need to, or to reveal a deal that can be done or a special offer that has only just become available.
The pressure will be really on the rep towards the end of the day as you should have seen a property that meets all your requirements by now. The pressure exerted on the rep will be passed down to you in a more subtle way in the form of more direct or leading questions.
You will be dropped off again at 6pm and collected at 8pm for dinner. The conversation at dinner will be a lot more focused. You may also find that on this evening all the reps and their clients eat in the same restaurant, often taking it over. The reps are allowed to bring their partners to this meal. This is all part of the sales process as the partner has been thoroughly briefed on what to say. The reps manager and partner will also be present, so the sales process continues until 10pm. You will be dropped off at the hotel at 10:30pm with another 13 hour day under your belt.
By this point in the tour, if you have not purchased the chances of you doing so are minimal. Not only will you be feeling the effects of the long days, but so will the rep as their working day is on average 15 hours a day. Be prepared for a battle of wills.
Yours reps phone will be a lot busier today as they are pressured from above to get a sale. You will almost certainly call into the office to have a look around, with the real intention of putting some pressure on from the manager, finance person, company owner etc. This pressure will never be too excessive as this could be off-putting, but it will be pressure none the less. “We have found you the property within your budget in an area that you loved that meet all your criteria…… its what you asked us to find and we have, so lets do the paperwork!” The rep will pull out the property scoring sheets with you favourable comments and score on the top property. You will be told that if you do not buy now then you never will. Your “bottle” will be questioned and you will be asked why you bothered coming out if you had no intention of purchasing I the first place.
This is the make or break part of the tour. The pressure to purchase will be considerable but not overbearing, more subtle than high pressure.
You will find yourself looking at properties that had previously been rules out because of comments made in other properties. If you comment in one property that the kitchen is too small, the rep will then rule out taking you to dozens of properties that have small kitchen and will only take you to properties that have bigger kitchens.
The rep will keep going because they are paid on a commission only basis and have nothing to lose. As a self employed, commission only sales person, if you do not buy, they will not be getting paid for working some 60 hours and they could be one step closer to getting fired, especially if the sales manager thought you were a good purchasing prospect. In Spain if you are not on a contract you have to pay approximately €250 per month to the tax office to cover social security as well as €50 towards your accountant. Even if they do not work or earn no money one month they still have to pay out €300. Their company will say that this keeps them lean and eager. The reps will say that it leads to unnecessary pressure and often hardship.
With the realisation that there is no prospect of a sale, most reps will give up come the end of the day. You will find that you will be dropped off at the hotel at 4pm, the rep will offer you the chance of going for a meal on your own (at your own expense) and you will be given the opportunity of a later collection on the final day.
The meal on this last evening if taken will be a more casual affair as the rep is resigned to a “no sale” tour. The meal will be taken earlier and finished quickly. The rep out of spite will often take you to a restaurant that you have expressed that you do not like. If you don’t like Chinese food guess were you will be eating come the last evening if you have not purchased.
If you have purchased you will have spent Thursday completing paperwork and contracts in the office. On the Friday the rep will have you out of bed at 5am and standing outside the local town hall in a queue to get your NIE number (needed for purchase). You will be taken to a bank to open a bank account and introduced to a solicitor. If you want the solicitor to have power of attorney you will need to go to the notaries office as well.
As a word of caution I would always advise you to seek out your own solicitor rather than one suggested by your agent. Your solicitor should be working exclusively for you and some agents have far to a cosy relationship with their solicitors. Just check out some of the internet forums for details.
If you have not purchased, this will be a more relaxed day. You will have to check out of the hotel by 11am but the hotel or rep will take your cases. You will need to fill in an end of tour report where you can comment on the rep, company and tour. You will have a little time to sunbathe , go shopping, go for a walk. The chances are that you will be dropped off at the airport a good 3 hours before your flight and your reps car will disappear in a cloud of dust ready for the next clients.
Taking everything into account would I recommend partaking in an inspection tour?
The case for yes:
If you are looking for a new or off plan or key ready property, the prices are set by the builder not the agent, so you will be paying the best price for the property. Despite the sales tactics, the reps in general have a fantastic knowledge of the area, builders and developments and despite what you may think, they are chosen for their personality more than sales skills. The agents can use their size and power in your favour and you do get free flights, accommodation and use of car and tour guide. You will cover more area and see more in one day with a good rep than you would do in a week on your own. If you do purchase you are actually paying for your free tour out of the agents commission. It’s a great way to learn the area and see property at their expense, however please remember that your rep will not earn a penny if you do not buy.
The case for no:
You only get to see the side of Spain that the rep wants to show you. You are never on your own and are always being questioned as to your opinions. If you are considering a resale property then you will have to pay the agents fees not the seller. Agents can charge up to 20% commission. One a villa valued at €200,000 the agent will put it on the market for €240,000 . An agent can make €20,000 on a small apartment. If you have an idea of the area or what you want and the sort of property you are after you can save a fortune doing it your self.
There is an alternative. There are now companies who offer the best of both worlds. They are independent of any builder, promoter or agents. You pay for your flights and accommodation and meals. They pick you up and take you out looking at areas and properties and charge you a day rate. The late afternoons and evenings are yours. People come out for 7 days, spend 3 looking at properties and the rest of the time on the beach. Because they are independent they have no loyalty other than to you and could save you thousands. In these times of hardship it really is the best solution to a problem you never even knew existed…. Until now.