Karl SmallmanBy Mary Beker
AS an independent estate agent who has lived and worked in this area for over 30 years the most common question I am asked is “How much is my house worth”? Especially at the moment when prices are dropping drastically. I personally think that they have hit bottom, and so what does it mean?
People often have an inflated idea of what their house should sell for, not what it will sell for in the present climate.
The real answer of course is whatever somebody is prepared to pay for it.
Everyone knows that prices have dropped and the buyers who are around are looking for bargains, some of them to my mind make pretty insulting offers, thinking that everyone is desperate to leave.
However people sell for a variety of reasons: ill health and down sizing are only two of them.
Many of us would not dream of living anywhere else than this beautiful area of Spain.
There are many bargains to be had, the prices were, I think, inflated before this particular bubble burst and some properties were were never worth what their hopeful owners thought.
This situation was not helped by some agents from the coast – hoping for an exclusive – who quoted silly prices.
However, this is not the Costa Del Sol, thank goodness.
However there is much more interest this year, many more clients and hopefully more sales – but people will bargain.
Be prepared for some serious negotiation.
Having just put in a new kitchen or bathroom will not increase the value but it will make it easier to sell. Kitchens and bathrooms are still one of the best selling points.
Personally I would not sell at this time if I could help it – unless I was buying something which was equally reduced.
The current situation is not going to be over for quite a while and it could take years for the prices to rise.
It is definately a buyers’ market and will be for a while.
It sounds like doom and gloom and doom but it’s not really.
Be realistic and remember that you are living in one of the loveliest places in the world.
These arrogant agents! Why is a low offer insulting? Any offer is always a sign of interest. There are still many agents who will not even pass a low offer. And proudly admit that. In fact however they obstruct doing business. As there are more houses to choose from than there is money to buy, it makes perfect sense to make a low offer. With the way prices went up for years, an owner might still make a small profit, at the same time have lived there for free for years, and I get a second hand house. I dare say that if the gouvenment would prohibit agents all together, it would be better for the economy. Insulting? It is the agents themselves that need a firm insult. All greedy b******s.
How it all works here. Last year I had a dream deal. Direct with the owner. Smile on my face. Told some friends we will move soon, not much more. Friends. Haha. Owner did not reply to anything for two months. Only found out later that an agent pieced the whole puzzle back together (she posed as a friend for some years) and called the owner to say she had a better offer. Which in fact she had not. She was just pissed off that I did not buy from her. One month more the owner contacted us again. No way. Currently, I decided I am very happy where I live. It is paid. Yet with these kinds of people, I just looooovvvvvveeee to tell any new potential buyer that is about to get the dream sold the bare simple truth. This article above already starts with a LIE. The lady claims she is “independant”. She is not. She depends on high commissions she takes from vendors. She does not respect buyers. They are stupid people who only see the sun and should be plucked. “Buyers market”????? I put all my cash in well protected investment funds. No more crap. I stay where I am. My point is that in general this is not good for economy. In a good economy euros should roll, because they roll further after that. But sorry and thank you. All “agents” should be deported. I suggest to all buyers to first get a good picture on where commission goes and then compare that with the hourly fee of a lawyer, doctor, prime minister. These agents would take thousands on a deal and then complain they had to pick up clients from the airport!!!!! How much in gasoline is that???? Ahhhhh sell the dream… Sorry. I am here to tell the truth to anyone I encounter. Telling the truth is no slander. It is the truth. You leaches!
To reply to the agent haters .you do not have to use an agent at all ,you can spend a lot of time and money tramping around the Andalucian countryside if you wish.If somebody offered you 60,000 Euros for your 350.000 Euro property ,I am quite sure that you would feel insulted,I would .Personally I always pass on offers .No one seems to consider the fact that I could show a property 100 times ,then the owner sells to a friend which he has every right to do so ,even though I have spent money advertising their property.Where can you find someone to work for you for free,with no guarantee of ever being paid.Greedy,there may be agents on the coast that sell houses like sweets off the shelf,,but in these times not many.I am not a liar,independant,of course,I work for myself,not for some big chain Keep your money in investment funds,most of my clients are buying a home to live in.Incidently we agents pay a hefty wack of tax on commisions. I certainly do not think my clients are fools,many of them have become friends. I assume you work for money ,most of us do ,including us poor maligned agents.
I certainly don’t think that estate agents help themselves much in poor scenarios, have just been reading this article – http://news.kyero.com/2010/07/20/despite-property-glut-there-are-few-real-bargains/ – reading the comments it seems that a lot of agents want to sell you a dream whether one exists or not …
Just as an appendum, had missed Mary’s post, all agents can’t be tarred with the same brush for sure! Finding the good from the bad is another matter altogether
Ok. Here is the proposal. I want someone to work for me. Find a 12 year old property, willing to pay the price of 10 years ago. No more. Owners still get their money back plus some profit. Enjoyed it for more than free all these years. All hours and expenses paid. But I want direct contact with the owner. Still your effort will be rewarded with a lawyers fee plus a bonus when you find it within 3 months. Does not sound bad to me. But such people do not exist. First of all because your colleagues that you all share commission with will not accept you anymore. Second, while you talk crap about a buyers market, you still have virtually NO respect for buyers. And no I am not speculating. I just wanted another place to live that was just a little bit nicer even than I have now. Glad I changed my mind. Can you imagine trying to sell my current house, having to tidy up for 100 viewings and the stupid cow is so incomptent that she keeps showing it to tourists who can no way afford it but just use the agent to have a nice day out looking at expensive villas? And than moans about all the time she had to spend on viewings? The number of zeros this woman mentions in here exagerated example tell a story too. Does she know how many beers a hard working bartender has to sell to reach such an amount? And no I am not that bartender. I just got a more realistic perspective. Agents are crap.
There is a difference between a “low offer” and a derisory one. Not all agents are equal, so lets stop making sweeping generalisations shall we.
@Simon & Mark: I agree. You have to use common sense, ask around for advice (friends and locals) and what they think of the Estate Agent you will be using. I work for a small family run agency with 10 years of experience. We are still going strong because we are honest. We may not always be popular for telling things as they are but at least we can look our clients in the face when we pass them in the street.
What are selling at the moment are the bargains, at least in inland Costa del Sol.
@Simon & Mark: I agree. You have to use common sense, ask around for advice (friends and locals) and what they think of the Estate Agent you will be using. I work for a small family run agency with 10 years of experience. We are still going strong because we are honest. We may not always be popular for telling things as they are but at least we can look our clients in the face when we pass them in the street.
What are selling at the moment are the bargains, at least in inland Costa del Sol.
The simple facts are this. Spain has to either leave the euro or be bailed out. In the case of Spain leaving the euro, which I’d say is a 50/50 possibility before 2015, the euro value in your house will then be cut by half – the Peseta will be worthless against the Sterling and Euro. Unless Zapatero changes his policies and faces reality, Spain will be the next Greece, and it will be much worse.
Spain has as many houses for sale as America does currently, and the US is six times bigger than Spain. Just shows you the extent of the problem.
@FRED: I didn’t know that about the America-Spain homes for sale ratio. Would you mind posting a link to where you got that information please? It sounds like interesting reading. Thanks.
“http://bit.ly/OzZuv”
The article above is about a year old, but nothings changed in that time. The investor websites and forums are the best places to watch about what will happen to the economy; they know everything that’s coming, sadly, and most say that Spain is very close to removal from the euro.
More interestingly Chris, what do you think the change back to the Peseta will mean for the property market? It would a very interesting to hear your take on that.
@FRED. Thanks for that article. The financial future of Spain certainly doesn’t seem healthy according to that writeup.
As for the change back to the Peseta, I know the majority of the Spanish will be happy (including my wife) as they never stopped thinking and working with the Pesetas. Maybe they will see how vastly over-priced things are as I can’t imagine the prices of things coming down a great deal with a change back to the peseta. My colleague David would be in a better position to talk about that, as he has been in Real estate for over 10 years. (I’ll try and get him to reply and give you his insights!)
On a personal level, I’d dread going back to that currency. I’ve never been able to get my head around ‘cientos’, ‘miles’ & ‘millones’ de pesetas, although a ‘menú del día’ in Málaga for 500ptas seemed a good deal about 10 years ago.
How would they go about changing back? Do you have any ideas? Maybe it would be good for some old folk or ‘black money’ horders that still have a few millions of the old stuff tucked away under the bed! At least it would keep the advertising agencies and printers in a job for a while, having to print out their adverts with the old currency.
Have a good weekend. Thanks again.
Chris, I think you will find that hardly any writeups are positive about Spain’s economy (please correct me). Spain ultimately needs a shift in its culture to get back on its feet. No more doing deals, black money, cutting corners, nepotism, and ‘enchufe’ – all that has to go out the window, for good. It has definitely contributed to Spain’s problems, but more than this Spain also needs to be more innovative and productive.
Regarding changing back, it would be undertaken by the markets ultimately. They would value Spain’s overall “wealth” (taking into account its loans and debts and other factors) and then over a period of a few months a new value for the Peseta (exchange rate) would arise, and settle. Many economists say it would be around a 60% devaluation from Euro/Peseta, such is Spain’s debt.
The Spanish people I have talked to say that they cannot wait to get back to their original currency – it’ll be like the old days, they say. It will be a total disaster for expatriates of course, who have invested in Spain only to see their properties devalued by around 30% already, and then by by 50% or more, overnight. Bad times ahead; can Zapatero pull it off? I doubt it – Spain’s debts are too large and it is too big to bail out.
For those of you really worried about which Estate Agent to use in Spain, here’s an article written by a colleague of mine who details the pointers that you should be looking for in a professional agency:
“http://www.ideal-country-property.com/blog/2010/03/estate-agents-in-spain-who-to-trust/”
Hope this helps.
I arrived at this topic using a search for property values. I own the mortgage on an apartment in Nueva Andalucía, currently living in Singapore I rent out the apartment. My tenant has indicated he would be interested to buy the property and has asked for a price. Well I know what I paid for it in 2006 but have no idea what a fair price would be now.
Some of the comments regarding real estate agents seem to me to be a tad insulting; presumably the majority of agents are like everyone else just trying to make a living. At the time of purchase most agents in the Marbella area were requesting commissions of 8% which frankly I found to be outrageous, (fee’s in the UK at the time were between 1.5 and 2%). So I can see why people hold a negative view of agents however resorting to insult in my view is unnecessary. One can simply choose not to use an agent or negotiate a discounted rate.
I digress, the point of my post was to ask a couple of questions, currently in UK it is possible to go online to sites such as Zoopla and obtain the sale price of properties, and in some cases historical data is available. My questions are 1. do similar sites exist in Spain? And 2. My research indicates that prices continued to rise until end 2007 and then started to drop and are currently 20-30% less than the 2007 Peak. Would a fair estimate be 20-25% of the 2006 sale price?