SPANISH PROPERTY MAGAZINE 2015 Second Edition Early Summer
SPANISH PROPERTY MAGAZINE (SPM)
Including the Full 2015 Version of The Buying Spanish Property Book
2015 Second Edition
SPAIN
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WELCOME TO THE SPM
Created, Curated and Edited By Graham Hunt and Lisa Sadleir Editor’s Note Welcome to a special edition of the SPM. No properties this time just the full, edited for 2015, book about buying property in Spain and how to do it. Read it and then get in touch with us to tell us how we can help you out in your Spanish Property Purchase.
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If you have any questions or suggestions or simply want to comment get in touch with us by mail at spanishpropertymagazine@gmail.com.
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Sales are going really well in 2015 so far and with many currencies up against an ailing Euro and mortgage purse strings being opened by the banks at the behest of the European Central Bank, the number of foreign buyers is increasing even more dramatically than it already was.
WHAT’S IN THE SPM THIS MONTH FEATURES THE FULL AND DEFINITIVE GUIDE TO BUYING PROPERTY IN SPAIN BY THE SPN
WHAT YOU SHOULD DO TO PREPARE FOR YOUR SPANISH PROPERTY VISIT
BY THE SPN
HOW NOT TO FIND THE PERFECT BUYER FOR YOUR SPANISH PROPERTY
BY THE SPN
100 TIPS FOR MOVING TO SPAIN
PART 26 BY THE SPN
WHY WE SAY THE SPANISH PROPERTY MARKET IS RECOVERING
BY THE SPN
WHAT DO YOU WANT TO SEE IN THE SPANISH PROPERTY MAGAZINE
BY THE SPN
BUYING SPANISH PROPERTY AND LIVING IN SPAIN
Introduction and First 3 Chapters
INTRODUCTION I wrote this book in order to give you some sort of guide to what the buying process consists of in Spain. Lots of the examples come from where I work in Valencia, as do many of the images. I have tried to include some pictures of the typical types of property sold in this area but recognise that many people are looking for the basic two bedrooms, two bathroom apartments overlooking the Med with beautiful views to the next block of apartments just besides you. That is not really Valencia. Whatever you are looking for the guide will serve you as it includes all of the steps needed to take you from the beginning to the end of the process and beyond.
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Enjoy the eBook and if you want to come back for more remember that updates will be made through the magazine here as laws change and the process develops.
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If you have any queries regarding the eBook or would like more information on any of the topics covered within it feel free to get in touch with us.
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Copyright is the author’s, Graham Hunt, and this work is not to be reproduced without permission, or changed in any way without express written consent. All information is up to date at the time of writing, May 2015, and further developments will be noted in any future editions.
Chapter 1; Why Do You Want to Live in Spain? A selection of answers to that question that we hear from people coming over here;
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“Well Britain is just full of immigrant’s innit!” “The weather’s awful”
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“Council Tax” “The country’s falling apart”
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“I don’t feel safe any more”
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On coming to live in Spain you are an immigrant now and yet you expect to be treated like a King. The point of view should change and you should try to integrate into the local culture because, after all, that is one of the biggest gripes of the expat living here, how the foreigners in the UK stay in their own little World.
1: Why Do You Want To Live In Spain? The World Health Organisation describes ! certain parts of Spain as the healthiest places in the World to live Spain is a country with loads of nationalities living here before you even start to include the Brits, the Germans, the Dutch, the Ecuadorians, the Americans, the Moroccans etc...
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“SpainIs... !
a potent mix of hedonism and living for today
A Basque considers himself Basque before anything else, a Catalan is a Catalan first and foremost and will usually deny being Spanish, an Asturian lives in the real Spain because it was never conquered by the Moors but the rest of the peninsula was (Apparently it was to do with the weather as opposed to any heroic resistance) and therefore doesn’t count, and a Gallego is a romantic dreamer who looks first to the Americas and the sea and then to Madrid. That Madrid is the capital is an accident of history is another thing but this book is not about that it is about buying a property and living here.
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The World Health Organisation describes certain parts of Spain as the healthiest places in the World to live. The area that comes off best is Valencia and the Mediterranean apparently, due to the climate, the lifestyle, health issues and longevity. The Spanish Tourist Board has always said that “Spain is Different” but today it is less different as the World becomes more homogenised.
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What makes Spain special continues to be the essence of the country itself, not the people, not the culture, not the climate but the combination of these factors along with a potent mix of hedonism and living for today that make the average Spaniard impervious to thoughts of problems round the corner, or actually on the doorstep right now, yet terribly au fait with the plight of others in the World and in their own country; as an example of this the Spanish give the most of any Western Country per head to help fund charity work in the developing World.
Why DoChapter People 1Move To Spain? Continued Where can you fit into this highly controlled yet anarchic blend of a country is what you must ask before you come here.
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Those who shouldn’t come here are the following;
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* Anybody who is frustrated by delays and prevarication. * Anybody who hates dealing with paperwork. * People who don’t like noise, especially in the Valencia region. Spanish cities are the loudest in the World and they rarely sleep during the fiestas that exist in each village, town and city at various times during the year. * Anyone offended by overt Catholicism, even if only paid lip service to outside the fiestas and church visits. * Anyone who does not have a clear idea of what job they want to do but needs to do it now.
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Those Who Should Come Here;
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* Those who do not believe that there is no such thing as society. Here there is. * Those who want to live in a better climate. Global warming may have the last laugh but after acclimatisation you find yourself complaining it is cold at 10ºC. * Those who want a slower pace of life. It is possible here. Even though people with their own businesses here spend 24 hours a day rushing round they still notice a difference when returning to their country of origin. * Those who want to retire and have lower costs than in many other countries. * Anyone who wants to integrate themselves into a vibrant community. *Young people looking for opportunities in life (if they are willing to set up their own business to do it) and parents of young children who want them to remain children for longer and grow up happier. * People looking to change their lives for the better.
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So if you fit the profile, you fancy a challenge or you simply want to see more of the sun and feel better as a result then start reading, start learning and save yourself a lot of money in the process.
2: What To Expect On The Ground
The majority of the country is open and welcoming for outsiders This is a “How long is a piece of string?” question because each region of Spain has its own quirks and personality. The majority of the country is open and welcoming for outsiders (Although overt racism towards ethnic minorities is very noticeable) However there are parts of the country that are not Spanish really.
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“SpainIs... !
...parts of the country that are not Spanish really.
The Costa del Sol for example is largely considered to be for people who wish to live the life of an Eastender in the sun. The ill fated BBC soap “El Dorado” had it just about right if you think like this, lots of squabbles and Eastender style ructions interspersed with sun, sangria and sex and finishing up with everyone dying in a bus crash on the way to Gibraltar (Well all apart from the last bit of course) If you take into account the corruption problems endemic in the area and still ongoing despite the imprisonment of most council officials in certain places especially in Marbella, then you have an anarchic chic in even the most salubrious places.
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The Costa Blanca has areas that the menus are written in English or German but not Spanish (Or even Valenciano). For some reason Denia has traditionally been German and Jávea - British! (Although that has now changed) They are next to each other.
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Cataluña has a different language and a chip on the shoulder about using it yet the beach resorts are mostly Spanish speaking. The Basque country is an industrial powerhouse which is bucking the trend of industrial malaise and the Cantabrian and Asturian coasts are green and inviting but remember they are green because it rains (and how).
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2: What To Expect On The Ground putting a fence five kilometres inland has not been ! floated yet but it would easily separate two totally different nations Madrid has “Nueve meses de invierno y tres meses de infierno” (Nine months of winter and three months of hell) yet is a living, breathing 24 hour party city with fantastic cultural offerings and around it are the historic cities of Toledo, Salamanca and Segovia.
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Andalucía has Flamenco, Gypsies, Bulls and most people’s impression of what Spain erally is from their experiences of Flamenco nights in any number of beachside bars.
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But get away from the coast, just a few kilometres will do usually, and you find the Real Spain, populated by Spanish people, surprisingly enough. The idea of putting a fence five kilometres inland has not been floated yet but it would easily separate two totally different nations. You can find the real Spain very close to the overdeveloped tourist areas and especially within the big cities. Valencia is often described as a collection of villages forming a metropolis and that is what it is. The people of the Cabañal, the old fishing village of the city are fiercely proud that their area is not like central Valencia, they even support Levante football club not Valencia, and the Old Town considers itself bohemian and modern with real life as opposed to the artificiality of the newer areas. These feelings can be found in any major city in Spain.
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The villages as you move inland are immediately different. You may wander into a village and find a third world war of fireworks going on for what is the Feast of an Inconsequential Saint for the rest of the region or country but it is a highly significant moment in the life of the village and extremely important in their social calendar. You can also become a part of this national fiesta. Those from outside are welcomed with open arms into these villages as rural depopulation through movement to the cities has placed the continuing existence of these traditions in doubt. Foreigners help the traditions to continue, they may well morph into something different over time but they will continue to have great significance in the life of the village.
“SpainIs... ...a third world war of fireworks going on for what is the Feast of an Inconsequential Saint...
3: Living Or Investing? Prices rose astonishingly up to 2007, and then dropped right back to pre boom prices or lower
If you are buying in Spain to live or as an investment for renting out or for capital gain over the years then it is now essential to take the long view. Prices rose astonishingly up to 2007, and then dropped right back to pre boom prices or lower, it is certainly a buyers market and the value is now exceptional.
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Living in Spain
“SpainIs... ! a typical Spanish villa with white arches overlooking the Med... (Not)
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You would think that most people would know what they are coming to Spain for and what they want. However, a lot of people come out with a rosy idea of the typical Spanish villa with white arches overlooking the Med and 50,000 Euros to buy it. They get a rude awakening when they can only buy a shack needing reform some 40km from the coast and with great views of the local pig farm for that budget.
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Typically the British came out to the holiday areas and took on a two bedroom apartment that could be rented out for part of the year and thus earn its keep. About 10-12 years ago people started to look at other forms of property ownership and started to want houses with land and their own pool as opposed to a shared pool. This trend remains today but there is also a much greater trend of buying city apartments. Those already here know certain things that the newbie should consider. * Do you know how to look after a pool and keep it clean? * Have you got any idea about gardening in Spain? * Is the house secure when you are not there? * Who will look after the garden and pool when you are not there and make it so that when you arrive for your week abroad you don’t spend half of it emptying, cleaning, filling and waiting for your pool water to warm up?
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Why DoChapter People 3Move To Spain? Continued Most newbies don’t take the advice to get a house with shared facilities so that the community looks after the pool. They still have the “Englishman’s home is his castle” mentality. Remember, Spain is a social country and you should try to become a part of it. OK so maybe you cannot skinny dip at 11pm because all of your neighbours will be watching you but at least the pool is useable.
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Many estates are now building common areas into the fabric of their community so that a central point and meeting place is available and environmentally speaking if a good quality pool is available why waste water in your own pool, they cost quite a bit to run.
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The cost of living in Spain continues to be lower than in the UK and in some ways there are huge differences. The usual drink, cigarettes and food when eating out are much cheaper but utility bills are comparable and mobile phones are more expensive compared with the deals on offer in other countries. It is important to consider whether your house has a phone or whether it is possible to get one quickly because it is not a given thanks to the monopoly that Telefonica has on lines. If you are relying on a mobile the cost soon mounts up although wifi is virtually omnipresent now even in the countryside.
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The utilities are weird. Water is virtually given away, except on the islands, which is strange considering the ongoing drought alerts every couple of years. A typical water bill will be around 35 Euros per two months. Electric bills are higher even than in the UK. Remember you will need heating in the winter and could do with air conditioning in the summer and that doesn’t come cheap. Gas is inexpensive by the bottle and slightly more expensive through the mains system. Broadband internet packages are available but the companies offering them have rather less than glowing reputations. This has got better in the last year or so and if you have a phone line you should be able to get broadband now and in most towns you even have the option of cable.
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Supermarket shopping is cheaper for fresh foods but more expensive for prepared foods. Food shopping in general has a good variety and can be a lot cheaper if you shop around. However, frequenting the English/German or Dutch product shops and living off the types of food you eat in your home country is expensive, nevertheless, the home comforts may be required at times.
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Satellite TV is easy to get in most areas but the further south you go the larger the dish needs to be and if you go to the Canaries you will need something from NASA on your roof to get your weekly dose of Eastenders (A tip here, just don’t watch it and your life will be better)
BUYING SPANISH PROPERTY AND LIVING IN SPAIN Chapters 4-5
ESTATE AGENTS
Chapter 4; Estate Agents Put them all up against a wall and shoot them and the judge might well be lenient because he has surely been stitched up by one in his life.
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Fourteen years ago the market for estate agents was deregulated. This was a good thing at the time because the registered estate agents oered nothing but a closed shop and were absolutely terrible. (I bought my first place here in 1999 and believe me I know)
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API’s as they are known were up in arms about the deregulation because their comfy closed shop now had competition and for a time the competition was good although most that got into the business slavishly followed the methods of working that had previously held sway. Of course the deregulation happened at the same time as the start of the price hike due to huge demand for bricks and mortar and the explosion of cheap flights so many people saw an opportunity.
4: ESTATE AGENTS BUYERS’ AGENTS: ! Make sure they are working for you and not the seller too As an estate agency here in Spain we started joking that every house we sold created more competition because the life plan of many who come over was to become an estate agent without language ability, legal knowledge, knowledge of the market or common sense. Also every builder, developer and DIY enthusiast also became estate agents to take advantage of those who leave their brains on the plane.
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There are various types of agents
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...every house we sold created more competition because the life plan of many who come over is to become an estate agent...
Traditional estate agents. Usually charge both parties 2.5% or 3% making a cool 5-6% on the sale. Of course the buyer always ends up paying it because the seller ups the price they will accept in order to cover this commission.
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Buyer’s Agent. The best ones will find you the property you want and charge you for it up to 3%. The worst ones will just visit a few estate agents and lump another layer of cost onto your purchase. Make sure they are working for you not the seller too and make sure that they are sourcing their own product. If they go through another agent then make sure all commissions are clear. If the answer is not clear when you ask then walk away.
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Property Finders. You give them a property spec and they find it for you. Charge a set fee for their services depending on price. They may go through agents with whom they have agreements so the fee structure is often opaque.
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Why Do People Move To Spain? ESTATE AGENTS CONTINUED Experience. Ask for testimonials and what previous experience they have.
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Knowledge of the Market. Ask the difficult questions about every aspect of living in Spain. If they cannot or will not answer then tell them to take a hike even if you really like a place because you will be able to get it elsewhere and probably at a better price.
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Language ability. How can you expect somebody who cannot speak the local language to know about any problems and encumbrances that may be on the property?
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An office address rather than just a phone number. You can meet at commercial centres and places like that because they are convenient but at all times make sure you know where the agency is based.
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Be prepared to go to both local and foreign agents because a lot of local agents will be able to speak English or will know someone who can come in and help you. However, if they don’t then think about going to a translator who knows the market or employ an English speaking estate agent to represent you as they will notice any problems during the purchasing process.
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Don’t fall for the hype. High pressure sales techniques are usually because of pressure to sell and a commission basis to wages. Remember you are paying a lot of money for this purchase and you should get it right first time.
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If you are taken to a load of rubbish first, out of your price range, not fulfilling minimum requirements etc do not be surprised. Spanish and foreign estate agents have long used this tactic to soften you up for the house they really want to sell you which will be the last one in the day.
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Try not to believe the “Another couple have just looked and are going to put a deposit down tomorrow” line. Sometimes it may be true but 90% of the time it isn’t.
ESTATE AGENTS CONTINUED Have a deposit ready so that you can secure a property at short notice but never pay it over to the agent. Insist on seeing the seller and agreeing on the price and make sure you know how much the agent will be getting from your purchase. If you are not happy then walk away. Watch how the price suddenly drops.
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Don’t worry about sleeping on it. Usually the property will still be available the next day despite what the agent says. An early phone call the following day and quick payment of a small deposit will secure the place.
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If the house is newly painted have a really good look for cracks or water damage. You know why. The Spanish do not usually present a house for sale and therefore if it is freshly painted then often the worst sins are possibly hidden. At least wallpaper hiding huge cracks is not a problem here.
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Go to the house again either on your own or at another time of day to make sure you see it not just when the agent wants you there. A nearby working quarry or traďŹƒc jams outside your door may change your mind about a place. Equally it might make you more determined to get it as you can see it in the evening and notice the spectacular sunsets on the terrace and how quiet and peaceful everything is.
If the house is newly painted have a really good ! look for cracks or water damage
5: PRIVATE SALES the words caveat emptor were never more apt There is nothing inherently different about a private sale compared with the purchase of a house through an agent. However the words caveat emptor were never more apt.
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When you go around looking around any area in Spain you will see lots of “Se Vende” signs plastered over the front of houses and balconies. This of course means for sale. Many of them are not really private sales, they are agents trying to look as if they are private individuals.
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Why?
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Because a lot of Spanish people do not like agents. I wonder why?
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You will find obviously that most of the people selling do not speak English if you phone up, so many people are reluctant to phone. Get an agent, lawyer or a translator and get them to phone for you with a fixed fee for arranging things. If there is an agent you trust then get them to do the work for you. They will be able to sort everything out for you and would obviously accept a lower fee as they didn’t have the house on their books.
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However on private sales you must be careful and it cannot be overemphasised the importance of getting a lawyer or professional advice because many people try to sell without using an agent to avoid the costs but also to avoid the problems that they know accompany the house in the hope of hiding them. If the conveyancing process is not followed then you may not find out about the dual carriageway that will be ploughing through your garden next year or the compulsory purchase order so that your land is now the 17th fairway of the proposed new golf course with a ridiculously low compulsory purchase price to be given to you. There are problems associated with buying in Spain at times; it is not always an easy process. Good professional advice is always useful, after all an outlay of a couple of thousand euros now can save you possibly hundreds of thousands in the future.
...an outlay of a couple of thousand euros now can save you possibly hundreds of thousands in the future
BUYING SPANISH PROPERTY AND LIVING IN SPAIN Chapters 6-7
CHAPTER 6: LAWYERS
Or bloodsucking vipers as they are known by many. Spain has a lot of lawyers and they all specialise in something different whilst practicing property law on the side especially if they speak a little English and can “Help Out” foreigners in the conveyancing process.
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If you know somebody in the local area who has had a good experience with a lawyer then ask for their name. And don’t expect the Spanish lawyer to be very proactive. They generally inform on a need to know basis and don’t answer things unless you ask. On the other hand most of them do not charge by the call, will answer you on the phone and talk to you giving you advice on things without charge at times and generally provide a decent service once you get to know them.
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The lawyer usually carries out the conveyancing on the property to make sure there are no encumbrances on the freehold and no planned problems on the horizon. Many times they also get powers of attorney for you and your life in Spain and it is this point which is the most controversial.
6: LAWYERS LAWYERS! do not usually sell off tracts of land for their own benefit There have been stories reported of lawyers with full powers of attorney having sold o tracts of land over a period of years to allow themselves a nice second income without the owner of the land knowing anything about it but this is luckily the exception rather than the norm. ! When should you use a lawyer? Our advice as an agency has always been every time but it must be said that if you are getting a mortgage it is less necessary because the bank will make damn sure that there are no problems on the property as they don’t want a worthless asset on their hands if they need to repossess. Any bank supplying a mortgage will do the conveyancing in the background for their own purposes. They will not tell you anything about it but be sure that it will be done. ! A good lawyer that you choose should do the following: ! * Check out the property registry ! * Check the local council records for debts on the property and plans ! * Check out the catastro for plans ! * Cross check the above with the actual size of the house to look for extensions etc that have not been declared. ! * Check for wills and others who may be contesting the right to sell the property.
Why LAWYERS Do People CONTINUED Move To Spain? * Obviously check that the person selling the house is the owner and has the right to do so. ! * Act as a confidante and somebody that you can place your trust in on your major purchase in Spain. ! If they do not oer the above services, cannot speak your language and do not have good references then think again about using them. ! Many people say do not accept the lawyer proposed by the agent as they have a common interest in deceiving you. Sometimes this is true so here it is useful to sni out whether you are confident or not. Many of the bigger agents and developers have lawyers that work exclusively for them so the conflict of interests is evident. As an agency we have always recommended lawyers but do not mind working with others who have already been chosen by the client. The working relationship between the lawyer and agent is very important to make the process go smoothly and remember that the agent may well know who the bad lawyers are so have a good think about whether to use the recommended lawyer or not. ! A power of attorney is usually signed over all of your possessions in Spain so it is a very far reaching document. It is usually open ended too so it is best to take a couple of precautions. Firstly, once the lawyer has done what he needs to do then take back their copy of the powers. Only original documents are accepted by notaries and therefore nothing can be done without your ok if you hold the original documents.
LAWYERS CONTINUED
However you should not revoke the powers as they may be useful in the future and what is the point of doing them again. Once you have a power of attorney then keep it but you keep hold the document. ! Powers of attorney can also be limited to acting on your behalf on a single issue. However these are very limited in scope and often present problems because they have been signed to buy a particular property with a reference number, catastral reference and address but if one detail is wrong on the documents, which quite often happens, then they are useless. The wider the scope of the powers the more useful they are long term. By taking basic precautions they cannot be abused. ! My opinion, by the way, is that lawyers are really human beings just like the rest of us.
My opinion, by the ! way, is that lawyers are really human beings just like the rest of us.
7: THE VISIT There are usually two types of visit. The guided tour and the self planned visit where you arrange visits with agents in the local area.
! The guided tour will usually make sure that you buy off plan and will not show you anything second hand that might interest you. They will not listen to you and make sure that high pressure techniques are used to get you into buying. Why? Off plan properties are generally paid to the agent at 6-12% commissions. Second hand properties are not really as well paid. However hard you try you will not be able to get these properties at lower prices because the builder and developer are tied into contracts with the agents promoting the properties.
When you find a place that you really want then it is imperative ! that you have a deposit ready to The other type of visit is that which you put down. If you return to the organise yourself. Make sure to get in touch UK then do a transfer to the with the agent a couple of days before you agent invariably you will find come over and also the day before just to that Murphy’s Law works confirm they have things to show you that perfectly and somebody else has conform to your requirements. If they have put the deposit down before you. nothing then do not go out with them because I have stated before that the they will take you to stuff that you don’t want property is more than likely to be to see. The more honest you are with the still available the next day so agent about your requirements; price, type of don’t put a deposit down in property, size, area etc... the better the chance haste, however if you let too that a good agent will be able to find you what much time pass, have set your you want. Get in touch a couple of weeks heart on a place and really want before to touch base and make the agent it you can guarantee that aware of what you want exactly. somebody else will beat you to it.
BUYING SPANISH PROPERTY AND LIVING IN SPAIN Chapters 8-9
CHAPTER 8: BANKS AND MORTGAGES
If you have the money to buy a place in Spain and do not need a mortgage then do it. Do not get a mortgage as they are invariably expensive to get at the moment. They are quite expensive to set up, they have a tax on them and you need a lot of paperwork but you have to bear in mind one thing; sometimes you may need the bank in future and having a relationship with them may well be advantageous long term. Mortgages continue to be the cheapest way to borrow money and it is better to have a mortgage than a car loan, credit cards and other personal loans of course. When there was a rising market such as the Spanish one over the five years from 2001-2006, if you are borrowing at 5% but the property was rising at 25% annually it didn't take a genius to work out that you should have used the bank's funding if you could. The situation has changed dramatically now of course.  It is preferable now to extend a current mortgage rather than open a completely new one on an existing owned property as long as there is equity in the property. Many Spanish banks still make this diďŹƒcult but if you can do it then it is the cheapest way by far to fund a purchase.
8: BANKS AND MORTGAGES Banks in Spain tried to make more money by opening up branches and making relationships with their clients. (In many towns the shops seemed to be just a series of banks, bars and estate agents with the odd Chinese 50¢ shop.) Just like in the UK these days your high street bank is very likely to disappear at the drop of a hat but speaking to a branch manager or somebody that can actually make a difference on your mortgage or loan application is still possible at times. ! Your bank manager and those who work in the office are generally very friendly unlike the vultures who run the banks and they will try to make sure that you get whatever you need in terms of attention and more importantly money. They may fail though as they no longer have powers to decide within the branch. ! There are two types of banks in Spain and they can be compared to the situation previously in the UK with banks and building societies although many of the building societies (Cajas) are now disappearing. Many years ago in the UK there was a clear distinction between banks and building societies, then in the great Thatcher sell off everything was privatised and building societies became something to make money with the same as a bank and forgot their original purpose, to serve the community. ! Here in Spain the same has happened. The building societies were run with their social conscience still clear, despite the political corruption in their running, rather like the Co-Operative Bank in the UK. They helped with funding for most of the cultural events that occurred (And I include sponsoring both football and Opera Houses in that) and they had a clear set of objectives to help the communities on a social level.
Why Do People To Spain? BANKS AND Move MORTGAGES You might want to bear in mind when asking for a mortgage what the bank is going to do with your money that you put into your account and the mortgage repayments. The terms and conditions from banks and building societies are very similar but at least you know that your money may well do some good in the long run. They were always involved in funding the local fiestas that make living here much more enticing although that funding is drying up somewhat now. ! Just for your information currently the following costs apply to a mortgage; ! Tax Roughly 1.7-1.8% of amount borrowed. ! Interest Rate Around 4% fixed for the first year and Euribor plus 2-3% for the rest of the term, changed annually. ! Notary, Registry and Gestor costs. Depends on the size of the mortgage but estimate around 0.7% of amount borrowed with minimum fees applying for smaller mortgages. ! Opening Commission; Usually around 1% but check because some bank are now applying a 2% fee. ! Redemption Fees If you pass the mortgage onto another person on selling the house it is their responsibility but is generally 0.5%. On older mortgages it may be 1%. Remember that this is very useful for the buyer of your property as this will save them opening commissions, taxes and other associated costs of a mortgage and is another incentive to have one. There is usually no fixed
LAWYERS CONTINUED Also bear in mind that you cannot take your mortgage with you from one house to another. !
time where a higher redemption fee applies so no need to worry about having to keep a place for a minimum period. Also bear in mind that you cannot take your mortgage with you from one house to another. The mortgage remains on the property and if you sell and buy another place then you must cancel the first mortgage and open a new one for the next property with the associated costs. Â For help with all of these issues around getting a mortgage then firstly ask us and if you are buying a place in another part of Spain then get in touch with us for our recommended brokers and we will put you in touch. They will help you out with the best deals in all areas from a multitude of banks
9: BUY TO LET. THE OPPORTUNITY? There has possibly never been a better time to buy to let in Spain in the last decade. Previously, I described BTL in Spain as a mug's game. Prices were too high and the returns weren't worth it. Now they are. Here's an example we sold recently. Property at 93000 Euros in Valencia City renting out at 60 Euros per night usually and an average of 50 Euros. Rented and fully booked apart from the odd day from May to September. 5 months at an average of 25 days at 60 Euros gives 7500 Euros income in just five months. Over 7% return and much of the year still to come.
! Another example, you buy a property at 100000 Euros and get 600 Euros rental per month average or constantly if you rent it out long term, which is possible as rental prices have not dropped too much whereas flat prices have. Simple maths give you a 7.2% return on your money before costs. What rental will you get on this type of property? Let us assume that it is a city flat, not massively central at that price but an OK area. Short term rents will give you more per month but your empty periods will be greater unless you have a fantastic lettings agency working for you or you do your own great marketing and there are not many of them.
(They will also take at least 10% of income per month to organise things but up to 25%)
! If your goal is capital gain in the long term you may be waiting a long time. However you can get a good rate of return on your money right now renting.
! You will not make a fortune out of buy to let though in Spain at current market levels for purchase and expected income from rental, unless you scale and get a portfolio.
9: BUY TO LET. THE OPPORTUNITY? If you rent out short term then think that when you want to use the flat may well be when you could get the greatest returns, in the months of July and August, Easter, local fiestas and Christmas. Your other times may be dead unless you are right by the beach in an area with little rental competition in a good climate, in a ski area, right in the heart of a big city such as Madrid, Barcelona, Seville or Valencia, get into the conference circuit or you are in a major University area with lots of foreign students coming in to visit on short term study trips. ! If you are going into buy to let, don’t just jump in. Study the market conditions, the area and the possibilities in depth. Remember that long term capital gain is a very good possibility now but it will be long term not short term and you will also be looking at a good return on your money
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BUYING SPANISH PROPERTY AND LIVING IN SPAIN
Chapters 10-11
CHAPTER 10: NOTARIES
The role of the notary is probably to make everybody else feel inadequate, underdressed and scruy.
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The notary oďŹƒce is the place where you will sign for your property and he or she will make sure that everything is legal, paid up to date and with no outstanding debts, personal or otherwise, on the property. Obviously there is usually a debt that shows but as long as the bank turns up to cancel the current mortgage or you are taking on that mortgage then you should not be too worried!
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Remember that personal debts can be encumbrances on a house in Spain so the Notary on the morning of the signing gets a Nota Simple to show what debts are on the property, makes sure the buyer realises what debts exist and hopefully makes sure that they are cancelled or that a retention of monies has occurred for the bank/credit or to cancel the debt.
10: THE ROLE OF THE NOTARY You must make various payments at the Notary’s office which are often surprising to those whose agent has not explained everything. The NRG as we know it is Notary, Registry, Gestor. You pay the Notary for the services stated above and witnessing that the transaction is legal. You pay the registry for taking the property registration off the previous owner and putting it into your name and you pay the Gestor to do the spadework for the Notary and Registry, making sure the papers get to the right place and eventually come back correctly. ! On the day of the signing you can demand a Simple Copy of the deeds to prove ownership and our experience suggests that you should as the Simple Copy allows you to change utility bills, transfer water shares, sign up for community fees etc.... Without it you may well be waiting about three months or more for the full deeds to come through. And they will come to you even though the bank has a mortgage for example, so guard them well as there may be many times when you need them again but most importantly when you sell on they are quite useful. ! Remember that if you have a mortgage then the Notary will do the same process for this and you will have to pay the costs of the NRG for a second time. Estimates of the amounts are given in the next chapter as things can get complicated depending on whether you are taking on a current mortgage, extending one or having a totally new mortgage. ! Having a Notary make sure that everything is legal is a very useful thing. The process of signing for a house in Spain is much more hands on and you can feel you are involved rather than just receiving the odd call from the estate agent or the appointed lawyer in the UK telling you the deed is done.
Why DoROLE People Spain? THE OFMove THE To NOTARY Notaries are also notorious for suddenly needing to leave the room for calls of nature. What this signifies is it is time to hand over the Black money so prevalent in Spain. The rules have been tightened up by the government and the tax authorities in Spain but they still have some way to go. It is estimated that 80% of deals in Spain have some element of black money in them, the declared prices often bear little resemblance to what is advertised in the newspapers and estate agents’ windows. Until a foolproof system comes into place the temptation for Spanish people will always be there on selling because they know they will probably need black money on buying and when your tax on purchase is 10% then the attraction is easily seen for the buyer. Nevertheless you must realise that all money over 2500 Euros in cash is supposed to be tracked and signed for by the banks these days. ! We recommend declaring all of the money paid over for the simple reason that 10% on purchase is better than 21% on a large capital gain when somebody insists on not declaring black money when they buy it from you. Common sense really. However, sometimes you cannot get the property if you do not declare black money. It is up to the conscience of the individual to do what they want to at this point but what you must know is that it is a crime to underdeclare, petty up to 60000 Euros and not petty and quite serious over that amount. Consult, talk and make an informed decision and remember at an away ground you sometimes have to play by the rules of the opposition.
CHAPTER 11: HOW MUCH WILL MY HOUSE REALLY COST ME? There are costs on top of a Spanish Property Purchase of Course. The biggest is the tax element of course! One agent in the Valencia area used to put the whole cost of the transaction in their prices. They never sold much because their prices were so much higher than everybody else’s and they eventually changed the system they were using. Unfair but why? ! Well when you buy a property in Spain you have the base cost, let us say for argument’s sake 200,000 Euros with the full total declared. You have tax on this purchase at 10% (8% in some areas), agency fee if buying through an agent will usually be 3%. Don’t forget the NRG (Notary, Registry and Gestor) which can easily add another 0.7% although fees are slightly variable between Notaries offices.
HOW MUCH WILL IT REALLY COST? Oh, and if you are getting a mortgage then add in the NRG for that depending on the amount, about 0.7%, again for argument’s sake and to make the figures easy let’s say a mortgage for 100,000 Euros and it is a new one and not taking on somebody else’s.
! Tax on the mortgage works out at around 1.6% although the formula is slightly complicated depending on various factors but as a rule of thumb it works. And don’t forget the opening commission which the agencies always forget on the costs when they pass you the amounts, as do the representatives of the banks funnily enough, but will vary from 1% (Normal) to 2% (Difficult Cases and wide boy agents) to 3% (Special Circumstances). And don’t forget that you have already paid for the bank to do a valuation which depends on the value of the house but for this amount would usually be around 300 Euros.
! So to list the whole cost you might come up with something like this BELOW;
200000 Euros cost
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20000 Euros Tax 7260 Euros Agency Fee (3% Plus VAT at 21%) 1400 Euros NRG 1600 Euros Tax On Mortgage 700 Euros NRG 1000 Euros Opening Commission on Mortgage 300 Euros Valuation Fee ! Total 233260 Euros
WHAT WILL IT REALLY COST ME? So there you have it, almost 16.5% on top of the cost of the house when getting a reasonable mortgage. This can go up to 17 or 18% when getting an unreasonable mortgage and down to 10% or below depending on whether you used an agent and the declared price of the property. Your rule of thumb should be to add 13-14% on top if using an agent but not getting a mortgage and 16-17% if getting a mortgage. ! Is this reasonable? No it isn’t obviously, but it is unavoidable if buying a property in Spain. When you play away you need to play by the rules of the host country remember. ! As for the mortgage repayment, most banks will be oering fixed one year deals at between 3 and 4% by the time you read this. That means a typical repayment mortgage of 100000 Euros will work out at around 510 Euros pcm. If you manage to get an interest only deal you will start out at around 350 Euros pcm.
BUYING SPANISH PROPERTY AND LIVING IN SPAIN
Chapters 11-14
CHAPTER 12: COMMISSIONS
If it seems that the commissions are high then you must again recognise that you are in a different world. In the UK the agent charges less but in theory does less and doesn’t even accompany you to the viewing preferring to stay in the swanky office which your commissions have paid for. Here an agent will do everything they can to not let you out of their sight in case you speak to the owner separately and find out the true price of the house or defect to another agent in the local area who may have the same house cheaper or other better houses to offer.
12: COMMISSIONS There is the hard sell of the guided tours where you are placed in a hotel, picked up early, dropped o late and not allowed to do anything else whilst having high pressure sales techniques used on you constantly. ! Remember that most agents charge you and the seller. If they don’t charge you then the price includes their commission and you will never find out the true price of the property. We know of cases of agents taking 50% in commissions fiddling little old ladies out of their true price. All of the black money going straight into their grubby hands and deep pockets. Do not be afraid to ask. If you ask and get an unsatisfactory answer you can be pretty sure that the backhander will be quite good for the agent. ! Assuming a 3% charge for buyer and the same for a seller what do you think the seller does? They put the price up to cover their costs. Thus a 200,000 Euros house is often advertised at 206,000 Euros or more, a little added on for negotiation but without taking it into another price bracket. While writing this I saw a property advertised at 24000 Euros more than my agency has it. That is almost 10% dierence so shop around agents because very few have exclusives on properties. ! Can you negotiate a commission with an agent? I suppose it depends on how popular the property is. If they have had it on the books for some time and cannot move it then you are in a stronger position. An agent who only charges the buyer will in theory be less inclined to negotiate because they are not also receiving from the seller and neither will the price be artificially raised. But as you know, everything in life is negotiable! (As long as both parties are willing to negotiate)
Why Do People Move To Spain? COMMISSIONS The banks charge a commission for opening a mortgage. Is this negotiable? Some agents say they have negotiated but the bank won’t move and therefore, unfortunately, there is no chance. Absolute rubbish! Agents have agreements with banks to receive a certain amount of the opening commission paid. If a bank is charging 2% then it is virtually certain that the agent is taking 1.5% of the mortgage amount. Only if you are a difficult case might this not be true, not enough income shown or highly geared for example. Therefore it is negotiable but don’t expect to make progress always. ! Be prepared to go into a bank and arrange your own mortgage or get a friendly agent to do it for you. We have arranged mortgages for clients buying from other agencies as we have offered much better terms. The link between agent and bank is quite useful sometimes you see because the agent has preferential valuations made and better terms in the interest rates offered as they bring business into the bank. ! In the end don’t just sit there and accept everything but do be flexible, you don’t want to endanger your dream home by quibbles about half a percent commission from the mortgage.
CHAPTER 13: AFTER SALES SERVICE After you leave the notary’s office considerably lighter in pocket but less worried about walking down the street a lot of agents bid you good luck, say they will see you soon and you never see them again. ! Nevertheless there are still loose ends to be tied up after purchase. ! In many areas water supply is not from the national grid but from a local well which may be large, serving many thousands of customers, or small, serving just a couple of hundred farmers for example. The differing rules and regulations for each supply company are amazing so there is never a clear answer of what is needed to sign up and how many shares in the company you may need in order to have a supply. ! In the case of towns, water is usually from the mains supply and the change of documentation over to your name can be done by a phone call giving personal and bank details sometimes accompanied by a fax copy of the Simple Copy of the deeds. However the wells may have masonic labyrinths to change the details. Firstly, most of them operate that you become a part owner of the water company, two shares for example, and that gives you the right to have a supply and vote at meetings.
AFTER SALES SERVICE? Some water companies need you to come to the office at the top of a mountain in the first month of the year with a “Z” in the name between the hours of 10 and 10.15 at night bringing with you both great grandparents and a copy of every single paper you have ever been issued with in your life and some money because newfangled ideas like cards and direct debits have not yet been introduced.
! Some require you to hand a piece of paper with your requirement in “how many minutes water you want” 4 days before you want water so that you can get it from the guy who brings it down from the mountain as if it were a cow. If you don’t do it you can be without water for a couple of weeks because he cannot break the rules for you because then everybody would want him to break the rules. You get the idea I am sure. Make sure that the lawyer and agent between them will sort it for you because if not you will spend the next two years of your life trying to sort it out.
! Electricity is similar to the mains supply for water. If you have it then a simple phone call will do, unless you catch someone at the call centre who says that you have an irregular supply etc...
! The phone is a world of its own. Telefonica as the only supplier of lines is capricious and the people in the call centres unfathomable. Some will let you change the details from any number and some only let you if you call from the number to be changed. If you get one of these hang up and ring again because you will get somebody else. Call centres are big.
! Sometimes you need to change the gas supply details too. This is the easiest one but unfortunately not many people have piped gas they still rely on the bottled sort outside the towns and if the previous owner took his bottles then you need to take out a new contract which will involve a survey by the gas company during which they will tell you that you need to put an extra grill in to allow more air circulation. This justifies their existence and means they get more money than just the contract.
! All of these actions should be supplied by an agent if you used one or you can ask a lawyer or translator to do it for you. If the lawyer has powers of attorney then he/ she should get on with it as they can sign the contracts for you if needs be.
AFTER SALES SERVICE? Sometimes there is no postal service to your house. Correos, the postal service, have decided in recent years that they can make much more money if they don’t actually deliver letters. They get people to come round to pick them up from the office where they will be held in a cardboard box and employ one person to serve a queue of 20. It’s really fun. You are well advised if they do not deliver to your area to get a PO Box which is usually available for around 45-60 Euros per year. Even if they do deliver don’t expect to be eating your breakfast and opening the mail over a cup of tea and some toast. Deliveries are made at some stage in the morning if they occur. I live in a town and service has improved slightly recently but previously our delivery day was Tuesday. It always seemed strange that 40 letters would arrive on a Tuesday and nothing the rest of the week.
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Three months after the purchase, or longer if the summer or a fiesta intervenes, you will receive the full deeds. They may be sent to your bank or the notary may inform you or your agent. You have a right to them so make sure you get them. Also at this point the excess of the provision of funds that was made for the NRG costs will come back to you. There is almost always an excess of between 20 and 200 Euros depending how the estimates were made out. Therefore some people suspect that the notaries often don’t tell anybody that the deeds are there so that they can keep the money earning interest in their bank until eventually somebody thinks, “We haven’t got any deeds”, and goes to pick them up.
CHAPTER 14! (THE LAST ONE)! WHAT NOW? Well now you have your property in Spain and you can enjoy it in theory. Make sure you do because, just as is the case in the UK, snags will come up, bills will arrive and neighbours will be gossiped about. However, the sun will shine most of the time, the wine is cheap as is the fresh food and the lifestyle is excellent if you know how to take advantage of it. ! Some companies are now oering a full problem solving service for people who have bought a property in Spain whether they live there or not. For a monthly fee you can get them to sort out any problems that may crop up and this service should be considered especially if you are not there. Also if you do not speak Spanish, a good translator or company of this type should become your friends so that you can call on them to help you out. ! Companies exist to look after your pool in your absence, keep your gardens neat and tidy, clean your house or flat and even walk your dogs if you have them here. You will probably want some work doing on the property and project management teams and interior designers are now available. Builders, plumbers, electricians and odd job men abound from Spain, the UK, Brazil, Rumania and virtually everywhere else on the planet so someone, somewhere should be able to sort out a problem for you while you enjoy the flat or house you have in your own idea of paradise. ! Then, when you are settled, you start searching for your upgrade property, your project or your dream home to move into and the whole process starts again.
Of Course You Know You Need A NIE Number Right? If you are thinking of moving to Spain or are already living in Spain, we will save you time, money and headaches by helping you with Spanish paperwork issues . We will keep you updated with changes in rules and regulations. You will avoid unnecessary fines and penalties that many people incur due to misinformation or ignorance. This Introduction to NIE & Residency in Spain is designed to: 1. 2. 3. 4. 5. 6. 7.
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What You Should Do To Prepare Your Spanish Property Visit
What You Should Do To Prepare Your Spanish Property Visit “Preparation is everything”
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Over the last months all I can say is that busy doesn’t even begin to describe it. Clients from all over the World coming to Malaga, Valencia and elsewhere looking for properties through the SPN, Move to Malaga and Valencia Property. However there have been a few surprises and some disappointments. Therefore I thought it pertinent to point out what you should be doing before your visit to search for your ideal Spanish Property. We wouldn’t want you to be disappointed by your Spanish Property Visit would we? We want you to have the best service possible and in order to do that there are some things you should be doing before you come and visit.
Initial Contact
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On initial contact with the SPN don’t just ask for information about a single property. Also let us know what you are looking for ideally. There is a good reason for this. There is usually a time gap between your initial contact and when you visit to look for property. If you are interested in a particular property then the likelihood is that others are also interested so it may well be sold by the time you get here. If you have limited yourself to coming to see just that one property and not given us an idea of what you are looking for then it is unlikely that we can help you by offering a selection of others.
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As an example, a client got in touch at the start of February asking about two properties and informing me that they would be visiting on the 8th-12th of April. I sent back details of the two properties and asked for information about their requirements etc… to be able to send more suggestions as they came up. I got no response… until the day they arrived. Their mail said that they wanted to go and see the two properties that day. Well, one had sold the previous week and the other two weeks before and, as I had no information or any sort of contact between the start of February and the visit, I had nothing prepared in case. Equally, I also had two other clients that day who had been in constant contact since they initially enquired the month before and had a great selection of properties for them to see with everything arranged. I am afraid therefore that the client who hadn’t contacted was out of luck and may had a pointless trip.
What You Should Do To Prepare Your Spanish Property Visit It’s not difficult to keep in contact these days, there is twitter @grahunt or @familyinspain, Facebook, phone, Skype, Youtube, LinkedIn or any other number of methods. Oh yes, a simple email too can keep things organised. Whatever you do make sure to sign up for the newsletters which come irregularly
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Ongoing Contact
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Keep pestering us on an ongoing basis. Ask us whether anything else has come up, keep us up to date with your plans and most importantly give us your contact details. Always send us (Maybe even using the contact form on our site) your email, phone number, your dates and where you will be staying (eg; Hotel, AirBnB, Property Rental) so we can arrange to meet you and take you around to what you are looking for. Even if your first visit is just factfinding let us help you by having a first meeting where we chat about lifestyle, requirements and what you really, really want so we can help to direct you, not only to the property but also to the services you may need to help you save a lot of money.
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Property Finding Service
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Our most satisfied clients are always those that choose to use our property finding service rather than arranging their own visits with lots of different agents. Why? Because we take out the legwork, the disappointments and the sharp practice that some other agencies will subject them to. No bait and switch here (“Oh that one has just sold so I am going to take you to a load of inferior places at higher prices“), no lies about how far places are from the city, no only two bedrooms when you stipulated a minimum of four.
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You tell us what you want. We listen and find it. And if you want our best service allow us to suffer the agents for you. Trust us to get you the best possible selection and don’t go with another agent just in case, believe me we will have talked to them if they are good. We have already filtered out the bad ones for you in each area so you don’t have to worry about it.
What You Should Do To Prepare Your Spanish Property Visit After Your Visit
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If you have visited and not yet bought then keep contacting us on an ongoing basis so we keep you in mind. On the daily treadmill of clients, people who do not contact regularly can get lost and forgotten about and it may be that the ideal property for you comes up but we miss you because, as they say, “Out of sight out of mind”. Don’t let that happen. We are good but we are also very busy. We hate it when someone misses out on a property because it goes before they have a chance to even see it when we know it would be just about perfect for that client. In order to keep up to date make sure to sign up to the newsletter, keep reading this magazine and don’t forget to fill in the contact form on our site.
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We don’t say this out of a desire to have a large mailing list, it’s just we have so many potential clients that we don’t want to lose you down the cracks. We want to do the best for you so that buying your Spanish property is as stress and hassle free as possible.
How Not To Find The Perfect Buyer For Your Spanish Property
How Not To Find The Perfect Buyer For Your Spanish Property At the Spanish Property Network we have properties in many parts of Spain of course, and most come through our network of collaborating agents, but we also get our own properties from people who recognise that we are one of the best chances of them being able to sell their property because of the reach of both our network and contacts. However, this is not always the case. Sometimes sellers of properties and even agents can confound even the most obvious common sense. So today here is a guide of how not to find a buyer for your house if it is for sale. If you are a seller of Spanish Property then help us or even your local friendly estate agent by not doing the following please.
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The seven deadly sins when promoting your property to the foreign market
1) Tell us that it is not to be put on a website because the owner doesn’t want people who are not seriously interested coming round to see it. This may seem counter intuitive but there is a reason for this which although patently stupid is understandable. In Spain as in many other countries people are curious. They want to see what their neighbours are doing and in the case of property sales, they want to know how much their neighbours have their houses on sale for.
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However, not wanting your property advertised on the world wide web to international buyers because you don’t want Jose, your neighbour, to know how much you are selling for is the height of stupidity. Firstly, the web is a rather large place these days (in 2013 the number of active websites on the web went over half a billion, or one for every 14 people on the planet). I guess Jose is a genius at searching through that lot, probably in a language he doesn’t understand, to find your little apartment. Secondly, what does it really matter if Jose knows? You never know but he may have a friend or family member who would like to buy it. Unless you have voodoo dolls of Jose dotted liberally around your house or compromising photos of Jose and his family adorning your walls I am guessing that Jose doesn’t really care about your house as he already has his own.
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2) Tell us that, yes, we can promote it but we cannot take pictures. Most searches for property these days start on the internet and the web is a predominantly visual medium. If your images are either not good or non existent then you will be cutting down the number of visits you will receive massively compared with properties that are well photographed, have a story behind them and are presented well. Again it’s common sense but it seems to escape many sellers.
How Not To Find The Perfect Buyer For Your Spanish Property 3) Tell us you don’t like estate agents so you will not be using them. I don’t like McDonalds so I don’t use them. But then again McDonalds are never going to help me out and open my property to a new market. If they did, I possibly would. Currently just over 20% of all sales of Spanish Property are to foreigners. On the Costas and in certain areas such as Malaga and Valencia this rises to up to 40% and in some specific locations well over 50%. Getting the word out about your property by using agents and networks like ours gives you a much greater chance of reaching this demographic who otherwise would definitely not find your property online. Think of us and other agents as the medium to sell your property rather than the devil incarnate (And yes, I know some agents may well have a touch of Lucifer about them but we try to avoid them of course)
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4) “I already have a sign on the property telling everyone it is for sale.” And are we to suppose that everyone in the World goes past your badly written, half hidden board every day? The truth is that a board outside a property saying “Se Vende” and a number will attract a lot of callers if it is in a place where a lot of people see it. However it is also true to say that the vast majority of foreign buyers will never ring that number because they do not speak Spanish of course and the vast majority of calls will be from agents looking to get a listing. Even more true is that the perfect buyer for your property may not ever pass by where your property is for sale so you need to go out and find them.
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5) “It’s already on the net through Juanita“. Juanita may be the biggest internet guru on the planet but she still won’t reach everyone who may be interested in buying your property. This is especially true if Juanita doesn’t speak a word of English (Not to mention Russian, Chinese or Urdu as examples)
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6) “You can send it to people who will be interested but I don’t want it on your website for everyone to see“. Similar to number one but the chicken and egg scenario or maybe putting the cart before the horse. I may have a particularly interested party but all of those chickens and all of those eggs cannot be put in just one basket of course. There may be 100 people reading my website who might be interested but if I just send it out to John in Idaho (The previously mentioned egg in basket) because he has already said he will be visiting Spain sometime in 2016 once he has sold his farmstead I think I am seriously reducing your chances of selling your property to anyone else within the Spanish Property Network.
How Not To Find The Perfect Buyer For Your Spanish Property 7) “I already have photos, I will send them to you“. The words that strike fear into many an agent’s heart. If you are not David Bailey then most estate agents really won’t accept this. After these immortal words you can virtually guarantee that we will receive five grainy pictures of an open toilet taken in the dark after it has just been used with someone accidentally photobombing in the background. We once received thirty pictures of a property and around 20 of them had a very curious dog sniffing around in them. Nice dog, but it wasn’t for sale.
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Photos with no outside shots of the building, no full reports of each room, no video, no context, nothing that really tells us anything about the property really, well, they don’t wash. Remember the more visually appealing your property is the greater the chance of selling it.
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You get the idea of course that the way to sell a property is through getting the word out about it being for sale but that is because you are a sensible and sane person. What is it about most other property sellers that makes them unable to see the obvious nature of the above points? Why are they blinded to common sense just because they have a property for sale?
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If you think that you would benefit from us being able to promote your property then get in touch with us. We have many buyers in our database looking for properties all over Spain. Maybe we could marry up one of them to your property.
CONTENTS • • • • • • • • • • • • • • • • • • • • • •
INTRODUCING THE SPANISH PROPERTY NETWORK SPANISH PROPERTY MARKET OVERVIEW 2013 LET’S TAKE A LOOK AT GANDIA THE OLD AND NEW SPANISH VISA PROCESS EXPLAINED 10 GREAT THINGS ABOUT LIVING IN SPAIN HOW DO YOU FIND THE BEST PROPERTY IN SPAIN SPAIN - GET USED TO IT FOREIGN BUYERS OF SPANISH PROPERTY THE NEW PODCAST ON SOUNDCLOUD BARCELONA - SANT MARTI 10 THINGS YOU SHOULD BE DOING EVERY DAY IN SPAIN GOING IT ALONE, ESTATE AGENTS OR USING A PROPERTY FINDER RENTAL WITH AN OPTION TO BUY ARE THE GOOD OLD DAYS BACK FOR SPANISH PROPERTY BUYERS? WHAT HAPPENS WHEN THE SPANISH PROPERTY BARGAINS DRY UP? 10 WAYS TO SAVE MONEY WHEN BUYING YOUR SPANISH PROPERTY THE 17 WORST THINGS ABOUT LIVING IN SPAIN WORKING WITH THE TV COMPANIES - MOVING TO MALAGA FOREWARNED IS FOREARMED NEW PROPERTY TAXES CAN I BUY THAT WRECK? AN UNCOMMON GUIDE TO PROPERTIES NEEDING WORK WHAT CAN A BARCELONA PROPERTY FINDER DO FOR YOU? 10 MAD REASONS FOR NOT BUYING A PROPERTY IN SPAIN
CLICK ON THE TITLES TO GO TO THAT PAGE Remember this
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• TOP TEN FAMILY TRAVEL GAMES • MOVING TO SPAIN WITH CHILDREN • VALENCIA’S BEACH AREA - THE • • • • • • • • • • • • • • • •
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Why We Say That The Spanish Property Market Is Recovering
Why We Say That The Spanish Property Market Is Recovering Sometimes agents are accused of overselling the recuperation of the Spanish Property Market because the recovery is not uniform all over the country of course. There are areas that are “hot” and there are areas that are “not“. In this post we are going to look at the reasons why we are predicting the recovery based on evidence, real world stuff that is happening right now, rather than anecdote (OK some of it is anecdotal :-)). Take a look.
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Firstly, (And this is Graham writing from Valencia), we have made more confirmed sales in the first quarter than any year since the business began in 1999 and that includes all of the boom years. I believe there are three reasons for this which are all contributing to the rise in sales.
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“We have made more confirmed sales in the first quarter than any year since the business began in 1999”
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The Three Factors Affecting The Spanish Property Market
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1) Prices are not going to get lower. Every trusted and not so trusted source has now called the bottom of the market in Spain with a proviso that there may be further small falls in areas that are not prime (Personally I think none prime can still fall quite a bit more) but nothing significant will happen on the downside in the prime areas, central big cities and favoured coastal areas.
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2) People in areas of countries that have experienced large price rises in the last few years are cashing out at the right time as they see their market stalling now. This is especially prevalent in the London market where we have had a deluge of clients cashing in the 30% rise in prices over the last two years.
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3) The Euro has fallen a lot in value against a basket of currencies but mainly against the Pound, the Dollar and the Krona. Prices in Spain for people in countries using these currencies or working and getting paid in these currencies, especially employees of the oil companies who get paid in dollars, look extremely attractive. The British are definitely back in the market after a few years with the Pound in the doldrums. A very happy client last week got 1.39 Euros on transfer using our preferred currency company.
Why We Say That The Spanish Property Market Is Recovering The next factor which shows the new found confidence in the market is the proliferation of new agents opening up all over the place, offices are springing up everywhere again and the large franchise chains are expanding their operations again. Engel and Volkers at the high end of the market are taking on 100 new staff in their Madrid offices alone. Redpiso are a new kid on the block opening up offices in many places and Don Piso are starting to up their number of offices too after withdrawing support from their franchisees around five years ago.
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There are new building companies doing both new builds and modernisations of existing stock and new shops in Valencia such as Bauhaus (German DIY chain), IKEA obviously with their expansion, Jysk from Denmark and many other existing chains such as Leroy Merlin are either expanding, increasing the size of their current shops or are seeing greater footfall. The new IKEA in Valencia is particularly huge.
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Interestingly we are seeing a large growth in the numbers of “reformista� companies and individuals who are buying tired stock and renovating and selling on at a profit. The fact that they can do this even with 10% tax rates on purchase and the associated costs of purchase show that there are lots of properties on the market that are currently massively undervalued and it is interesting for people to put in their work and design ideas to increase the perceived value of the properties.
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Anecdotally, because the figures are not out yet, we are hearing from town architects in councils all around the region that applications for building licences for renovating property are up very strongly and even new build licence applications are on the rise.
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Enquiries are up strongly with a plethora of enquiries about renovated city flats for example and an increasing tendency towards smaller villas in inland areas away from the coast. We are also seeing growing numbers of enquiries from investors looking to buy into the market and ride what they perceive as eventual rising prices. Allied to this we are still seeing as trickle of non EU residents looking to buy into the country and get residency by spending over 500,000 Euros. (You can see more about the Spanish Residency requirements here)
Why We Say That The Spanish Property Market Is Recovering We have recently started a renovations company in Valencia (Contact here for more information) as the number of great offers we are getting is ridiculous and the numbers of builders applying to work with us is growing exponentially. They are offering their services at really good prices and we are allowing them to do small jobs for us to test their reliability and work ethic before we start using their services on the major modernisation jobs we are currently involved in. The funny thing is that they are mostly from companies set up in the last six months by experienced builders who lost their jobs and work during the great Spanish crisis. The renovations company will be expanding into Madrid and Malaga very soon too.
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Finally we are now starting to see banks coming to the table with mortgage offers and credit lines for companies as they have been directed to do so by the European central bank. The European central bank and the EU have injected a large amount of capital into the markets, quantitative easing, and they have been told to let it filter down to small and medium sized businesses which is giving some startups in the construction sector the seed capital to start with their projects.
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Choose what you want to believe but there is definitely something better than just green shoots happening now in the Spanish Property Market and you would be well advised to strike while the prices are at their lowest and there are plenty of bargains available. One proviso, be careful. There is still a lot of rubbish around at higher than it should be prices. Avoid it like the plague. How? Contact us for the best advice and tips.
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Thanks for reading the latest issue of the Spanish Property Magazine. We hope you continue to enjoy what is a great amount of work each issue as much as we enjoy producing it. !
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The Spanish Property Magazine is the reference point for the Spanish Property Network, Valencia Property, Move to Malaga and the Spanish Residency projects. We will continue to provide you with excellent quality properties and stories from Spain in the SPM every few months.!
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