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Buying Property in Spain - How to Avoid Paying over the Odds
Spain has a lot to offer Northern Europeans and until recently there was a marked difference between the price in their home country and a similar Spanish property. However many buyers have found to their cost that they paid way over the odds.
Why is this and how can you avoid falling into the same trap?
Being in a different country you are unsure of the process, don't have time to compare prices, so many agents take advantage of you - in fact sellers will even increase their price if they know it is a foreigner buying.
One of the biggest differences between the Spanish and the UK market is that Spanish sellers set their own prices and agents add their commissions to this. In the UK you get a valuation which includes the agents commission.
One problem with this is that buyers set their prices too high. This happens for a number of reasons.
1. They have more negotiating room
The second problem is that agents will add anything from 3% upto 25%+ if they think they can get away with it - and often do.
Most agents are reliable and honest, but a handful have given the business a bad name - and typically it is Foreign agents that rip off their own countrymen. A lot of this is down to there being no regulation of the Spanish Property Market, agents create contracts between themselves and the buyer and themselves and the seller - ensuring that the buyer never finds out how much has been charged.
It is especially true for agents who use persuasive subsidised trips (wine dine and sign on the line) that give the buyer little or no time to make comparisons with other property. But saying a property isn't worth the money is not the same as it won't sell - because they do - by preying on buyers that don't know the difference between a cheap property and a good value property.
The result is that buyers find they have bought a property and cannot sell it - even at break even - for at least 2-3 years because they have been caught out.
So how do you ensure you don't pay over the odds for your property in Spain?
1. Research the area. This is easy with the internet where many properties in the same area can be compared (and in fact the same property on with different agents)
2. Note important features and compare each property against features (i.e. number of bedrooms, property type etc). Although there is no proven formula you will at least have a better idea as to whether a property is worth the asking price.
3. Use a good agent. Most agents (regardless of what they tell you) act on behalf of the seller. If you can - find a buyers agent. But if not research which agents in your area are reliable, honest and don't overcharge. This can be done by asking around and asking the agent how they operate. A good agent will try and achieve a fair price for both seller and buyer and will be happy to disclose their commission
4. BEWARE of agents who charge both seller and buyer. Regardless of what they tell you THIS IS NOT acceptable nor common practice. They do it because they know they can get away with it and it means they get double their stated commissions. But the price you see is not the price you then pay.
5. Don't be afraid to negotiate. British buyers say very little about the price and will accept the price given. They are often told there is no room for negotiation - but there very much is. Remember if you walk away they have no sale - and likely have no body behind you either
Unless you push for a discount you wont get it - So negotiate hard - or get someone to do so on your behalf. Offer too low and you will get to where the seller wants to be - offer too high and you leave money on the table.
So in short if you wish to avoid paying over the odds for your dream Spanish home keep your eyes open, ask lots of questions - and don't accept anything you are being told without checking it out first, and remember that everyone is out for themselves - you wont go far wrong.
Vince Barnes is the owner of http://www.SpanishProperty-Direct.com - a website aimed at informing buyers about the process of buying in Spain and keeping up to date with news and regulations affecting the Spanish Property Market
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