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Beat the Property minefield
March 3, 2009
• LAST EDITED:
April 1, 2009
Property • 6 Comments
• Few things are more traumatic than needing to sell your home
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Trying to sell your Spanish property? Finding it tricky? Nick Snelling has written a book on how to sell your home in a recession. He gives Olive Press readers a few exclusive tips on how to get ahead of the two million sellers in the same boat
FEW things are more traumatic than needing to sell your home. However, to see the price of your property disappearing into a vortex in a property crash is positively terrifying.
All of a sudden, to your horror, you find that your greatest financial asset no longer has a value that you recognise and – devastatingly – is something that you cannot liquidate easily.
The first thing you need to do is to come to terms with reality and start by getting rid of any ‘glass half full’ optimism.
Understand the current marketplace, appreciate its medium term problems and make a call as to whether you really want (or need!?) to sell right now.
Ask any addiction specialist and they will assure you that no alchoholic or drug addict can make a recovery until he fully realises the scale of his problem.
As a property seller, you must do the same to have any chance of achieving a sale.
• If houses could speak
Be under no illusions, this is a major property crash. There is no other way to describe it. In Spain, quite simply, too many properties were constructed for too long while prices rose to levels that were inflated beyond any semblance of reality.
Regardless of the credit crunch the property market was going into the doldrums anyway. The global downturn just made things infinitely worse. Already the Spanish construction industry has ceased to exist in any meaningful sense and unemployment levels are projected by the Spanish government to reach 16 per cent this year – and will probably exceed an appalling 20 per cent or more in reality. Massive debt in the UK and the tumbling value of sterling to the euro mean that the number of buyers coming to Spain from the traditionally lucrative British market will be low for the foreseeable future.
Meanwhile the vitally important Spanish tourist industry will suffer this year from a predicted decrease in holidaymakers, both domestic and from abroad.
Tax receipts will be down, welfare costs up and the miserable Spanish salary will continue to have much the same purchasing power as it had ten years ago.
Spain is reeling against the ropes and, if the 1990s recession can be used as a guide then this is a crisis likely to last for the medium term. After all, let’s not forget that it took some nine years before UK property levels returned to their previous highs and for some five years values barely moved.
If the recession in Spain is no worse than the UK in the nineties – then Spain and its property market may be in for a rough ride until at least 2013.
• As a property seller, are you therefore doomed?
No, not at all. But you will need every possible ‘edge’ to successfully sell your home. No longer can you sit back and wait for some credulous, sun-entranced buyer to be led drooling to your property by your amateur local agent.
You are up against genuinely tough opposition comprising desperate buyers who are selling their properties at ‘distress’ prices.
This is a buyer’s market and the buyers know it. Worse still, the buyers are firmly in the minority and have the pick of an estimated two-and-a-half million properties around the whole of Spain.
• Sell, sell, sell
To sell, you have to be more knowledgeable, more ruthless and more proactive than you have ever been before. You need to know every trick in the seller’s armoury and work every angle that exists.
You need to know how to prepare your property for sale, what marketing tools exist, how to deploy them effectively and how to maximise every opportunity so that you close a sale before your opposition.
You would be as amazed at what you can do and I am always astonished by the sheer idleness and passivity of most estate agents – despite the astronomical sales commissions payable.
But then sellers often do not realise that selling is practically a full time job and an activity that requires dedication, knowledge and energy. Some people think they can do a three day week and spend every other weekend in the UK or on the beach. It is just not true. Ask a successful seller.
The key is knowing a few of the industry secrets that, once known, will make your home far more likely to sell than the man next door.
• Don’t hide the price and never agree to sole agency agreement
Start by refusing to relinquish control over the marketing and sale of your property. Unless there are very exceptional reasons, you should never sign a sole agency agreement nor in any way limit the number of estate agents you employ nor your own marketing possibilities. Equally, always have your own ‘Se Vende’ or For Sale board outside the house… and always have the price on the sign.
Let’s face it your sale price is no secret and may attract local or visiting buyers who never thought they could afford a property in your area.
• Pay your agent well
Incentivise agents and never try to squash their commission, particularly in a falling market and be prepared to pay well over the normal rates – even if they seem excessive. You must also be fully conversant with the legalities of the selling process and know how to deal effectively with industry professionals from lawyers to surveyors and estate agents.
Lose the momentum on a sale through poor or slow communication and your only serious buyer for months may disappear for ever.
• Drop your price
You must also try to be a step ahead of the market. All too often sellers drop their prices after the market has fallen and continue to play ‘catch up’ as it drops further. Make a ruthless decision about the lowest price you will accept and work the market to make sure that your price is always markedly lower than your competition.
• Leaflet locally and advertise
Use the internet extensively and consider advertising in the classified section of your local paper.
• Sit back and enjoy the sun
Of course, you can always make the decision not to sell and to wait until the market picks up again.
This will, of course, inevitably happen – just as the volume of buyers from Northern Europe will return again in workable numbers. The desire to move to Spain has not changed any more than the wonderful climate, excellent infrastructure, proximity to Northern Europe or the charming nature of the Spanish.
However, do not underestimate the seriousness of the long term problems inherent in the property market.
Just to clear the existing stock of properties for sale will take years.
So, if you want to sell your house then you have to adapt to the new, tough market conditions and be bold, decisive, knowledgeable and focused.
If you are not – then you may get caught up in a vortex that will damage not just your finances but every aspect of your life and all its attendant relationships.
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