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Beat the Property minefield

PUBLISHED: March 3, 2009 at 3:23 pm  •  LAST EDITED: April 1, 2009 at 10:20 am
Property  •  6 Comments


Beat the Property minefield

• 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.

Nick Snelling’s book ‘How to Sell Your Spanish Property in a Crisis’ is available from Amazon and all good book stores. For further information or articles see: www.nicholassnelling.com

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Reader Comments »



Stuart Crawford

March 5th, 2009 2:36 pm

Well Nick Snelling – it was an excellant article until near the end.
Excellant infrastructure – not in Spain. Charming Spanish – yes, but corrupt through and through. Wonderful climate – you were not specific, coast/mountains/ behind the mountains – all have different climates and with climate change, a home on the coast is a big no-no.

For all those wanting to sell in Andalucia, even the Brits are beginning to wake up. Water – in many areas for how long, yes, de-salinated water – at a price.

The uplift in the £ will only last for about 2 quarters and then – on the same old path down.

This country has some huge problems ahead and how long will the ECB keep bailing it out.

Social unrest – possibly just around the corner, by the end of the year – 4.5 million unemployed, work it out for yourself.

I googled the mag. – Living in Spain and there were the adds for property ‘with building certificates’ – which are worth precisely what – less than nothing.

I really feel sorry for all those who bought in good faith – Brits/Germans/Dutch and yes decent Spanish people as well.

What will be the end game of this, the most horrific crash in modern capitalism. Only idiots do not realise just how corrupt the EEC is. It was created soley to (1) hopefully stop stupid Europeans killing each other – that’s a success for the moment (2) created to make it easier for big companies to make more money, which is the real reason for it’s creation.

Will the Euro last – I don’t honestly know and I don’t think anyone else does either.

It really is a big mistake to think that Spain will always be popular – many of those who come to live in southern Spain, leave within 2 years, why – unrelenting heat is a big reason especially behind the mountains.

Even when property falls to a realistic level, it still has to be born in mind that ALL and I do mean ALL Spanish property is crap built.

Now if you find the unrelenting heat of summer too much, take a trip to southern Germany and look at the quality and 100% legality of the property. Look at the beautiful mountain scenery. Proximity of so many other European countries and most of all – look at the prices.

Head north to the Bitberg mountains and see what your money wil buy there with genuine first class infrastructure. Or indeed the Ardennes. As the climate changes northern Europe is going to have a much better climate and many from Britain and Scandinavia do not like the intensive heat, so I really do think it is wrong to believe that the unending stream of would be buyers will continue.

The price of foreign owned homes is crashing in France – Euro mortgages funded in Sterling, the middle classes losing jobs hand over fist. No Dutch or Germans entering the market – by the end of summer many Brits will be desperate to sell – at any price.

So, lots of competition for Spain – the final kicker will be when the Spanish start blaming the foreigners for all their problems and turn on them – if that happens it will destroy the whole market.

Peter the Brit

March 6th, 2009 7:26 am

Good thoughts/comments Stuart………

daz

March 13th, 2009 11:38 am

Stuart’s comments are the very words from my own mouth. So much greed and corruption in Spain, particularly within the property industry. It was a disaster waiting to happen and I was stupid enough to get involved too. I’m back home in UK now but still own property and the forecast looks very grim to me. My mistake of relocating to Spain 5 years ago and spending the entire time trying to remain in employment and throwing good money after bad, has left me in a situation which will cast a dark shadow over the rest of my life.

sophie

April 3rd, 2009 3:26 pm

ALL houses are badly built in Spain?
All houses CAN BE badly built everywhere.
Greed and corruption only in Spain?
Are you sure?

You all need to get out more and stop whining… shame that you didn´t see your own greed first.
Spanish builders can do a fabulous build, but mostly expats are just wanting them to-get-on-with-it… er… whilst they visit the UK…

Andrew Belles

August 17th, 2009 2:00 pm

“It really is a big mistake to think that Spain will always be popular – many of those who come to live in southern Spain, leave within 2 years, why – unrelenting heat is a big reason especially behind the mountains.”

yet the population for spanish and foreign continue to grow. Thus there can not be that many leaving? Or there are continuously larger amounts wanting to move here. One or the other.

“As the climate changes northern Europe is going to have a much better climate and many from Britain and Scandinavia do not like the intensive heat.”

AS the climate changes in norther europe, the shift in atlantic winds are going to make countries like england have weather like other nations of the same latitude. Example Mongolia. So hotter summers and colder winters. And has an interesting example, not exactly the best summer ever for the UK is it?

Spain will always be popular, as it does offer a variety of climates, benefits from african and atlantic winds, etc… Whether its for you/me/whoever though is a different point.

Salobrena

September 8th, 2009 12:27 am

Despite Stuart’s comments that many leave because of the heat I have lived on the Costa Tropical (Andalucia) for over 7 years and in my experience most people relocate or return to the UK due to financial reasons/limited job opportunities and in this area lack of fluency. Those that leave because of the heat usually go for a month’s holiday then return. Behind the mountains I don’t know – wouldn’t live there myself – possibly they do leave for the heat but my impression is that you will still find most foreigners living on the coast.

The affects of climate change are unknown – will northern Europe be plunged into freezing winters again – look at the paintings of people making bonfires on the Thames!!! Will the Atlantic conveyer stall??

Times are indeed tough now and whether Spain remains as popular as it has been I do not know but my bet is it will remain the most popular destination in Europe for people looking for somewhere nice to retire.




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