The latest data for the last 12 to 14 months points towards a big fall of at least 15% according to Minister Corredor. “Anyone who wants to buy will definitely be seeing a fall in real prices. It’s unanimous; all the statistics reflect a fall, it’s a reality that we now can’t deny.” However, in the same interview, Corredor went on to say that prices are only falling in line with inflation and the Minister also argued that now is a good time to buy property in Spain, as both property prices and Euribor® (the rate at which euro banks lend each other) are dropping.
In higher-end areas such as Mallorca, prices have stagnated, so sellers who need to sell are having to accept offers. To overcome these drops in property prices, more and more people are selling their property privately, direct to buyers.
This works because the commissions that estate agents charge in Spain can vary considerably, for instance in the south: along the Costa Blanca and Costa del Sol, many agents charge 7.5% upwards, plus Vat. For cheap properties in rural areas, British agents have been known to slice 35%! So selling a €400,000 property privately could save you between around €30,000 and €40,000, so obviously this can provide sellers with a decent saving which can be used for bartering.
Selling your Spanish property privately by placing Se Vende (For Sale) signs outside or on your property or in classified adverts in newspapers are two ways for vendors to make contact with buyers whilst avoiding these high commissions but these options don’t always produce many leads and are not practical for sellers who don't live in Spain.
However, the internet has produced more and more businesses that present a serious challenge to estate agents. Private-property-4sale (www.private-property-4sale.com) is one such company that allows sellers to advertise their properties directly to buyers. The company charges a fee to put your property on its site, but as this is only €38 you can afford to use the money saved by not using an estate agent to bring down the sale price of your property without actually losing equity.
The advantages of selling your house privately
• No estate agents’ fees and commission.
• You keep control over the sale.
• You always know exactly what’s going on in terms of my sale.
• You don’t have to rely on the word of estate agents.
• You don’t have to worry about inflated valuation and selling prices.
• Since you are the one personally handling potential buyers, you would easily know who are really interested. Being the owner of the home, you are the one who is very much aware of its features. Therefore, you know how to explain it best.
• Greater market immunity: Selling by owner makes financial and practical sense in both buyers’ and sellers’ markets. Similar homes being sold can create tight competition. Selling privately gives a competitive advantage to that vendor because they can afford to be more price-competitive than their neighbour who is listed with a real estate agent. The buyer will normally prefer the comparable property which is being offered for a lower cost.
• Convenience: You are in control when you sell on your own property. You can set the schedule of your own appointments with potential buyers. You don’t have to rush into making your home spotless and clean just in case an agent decides to bring a client that day to show the property. You are completely aware when people are coming for a visit. Therefore, you can make the necessary preparations. If you are not living in that property then it is more than likely that you will have someone/a company looking after the property for you who can normally be negotiated with to allow viewers into the property.
The disadvantages of selling your house privately
• You might not have enough time or knowledge to properly market your property yourself.
• You don’t know how to distinguish a genuine offer from a waste of time. Although normally if they get to the point of asking to view the property they will be genuine.
• You will have to deal with and negotiate direct, and might not get the highest price.
• The main disadvantage of selling without an agent is that many direct sale transactions never close. Some of these deals are aborted because the buyers aren't properly assessed before they enter into a purchase contract whereas a good estate agent will make sure that you won't accept an offer from a buyer who hasn’t got the capital. One reason why many direct deals do not complete is because there is no experienced person working to move the transaction along and resolve problems when they arise, of which negotiations are the main cause.
It may sound daunting but selling privately can offer you a sound way of protecting your equity in these rougher times. If you do decide to sell your property directly then your first course of action is to establish a selling price. The most experienced agents will of course provide a valuable source of market information, and will help you reach a conclusion as to a proper valuation and a correct asking price for your property but beware of agents who tell you what you want to hear. Finding a buyer is, in many respects, purely a numbers game: the more people who view the property, the more likelihood that one of them will fall in love with it and put in an offer. Some buyers will negotiate with you, and others will be less difficult. But it's easier to refuse a low offer if you are showing your property frequently. You will need to be able to dedicate some time to dealing with enquiries and be able to negotiate your deal. Once you have found a buyer, the process is exactly the same as if you were selling through an Agent. You will need to find a good lawyer, one that is competent in Spanish property law, to complete your sale and they should deal with leases and exchanges.
For help & advice on selling your property privately please read this article.
In summary, selling a property privately can be as easy or as complicated as any task involving personal affairs. Good, professional help by Spanish lawyers and tax advisors can go a long way to help you manage a sale objectively and more easily.
