SpanishPropertyBuyer.com

The Spanish property market has fallen victim to the current recession and taken with it many of the big building names in Spain who have gone into administration. Thousands of agencies have closed but hopefully illegal sellers who took advantage of the boom years will have disappeared also, they are no loss to an industry which is still reeling from bad publicity caused by illegal builds, land grab and corruption. That said, many of these matters are being dealt with and Spain has been addressing these problems for some time, with new legislation covering the building industry and the EU is taking an active part by investigating the plight of buyers caught in financial and legal nightmares over homes they bought in good faith.  

During the boom years, thousands of homes were built and sold as people rushed to own a second holiday home but gave little thought to what and where they were buying, how much they were spending and how it would all be paid for in the future and many were blinded by the glossy pictures and over emphasised spiel of the big agencies that herded them into large urbanisations. Now we see hundreds of ex-pats returning home as the crisis has crushed their dreams, interest rates eroded their savings, losing jobs they thought they had for life and crippled by large mortgages and without the means to pay them, many have had their homes repossessed.

However, for many their life in Spain continues, they are happy and take an active part in the community and town activities in which they live and would never dream of returning to the UK or country of birth.

There are of course properties which have been slashed in price to sell them but what you must ask yourself is, why? It could be that the owner is so desperate that they will take anything to return home but it may be because they bought in the wrong location to begin with? If that is the case, you may buy the property very cheaply and be happy with that but what if you want to sell it again yourself? Will you be able to or will you be in the same plight as the current seller?

Many people still want to buy property in Spain and now is the time to buy before the VAT increases in July and there are many bargains to be found and in the right place to buy.

No, they will not be detached villas with sea views for 50,000 euros, they are piped dreams but there are properties now being sold at thousands of euros below market value, in nice areas near the sea and are good long term investments for when the market recovers. The Spanish are searching along the coast for such bargains as they are well aware that the market will recover and prices will increase, so are jumping on the bandwagon now.

 Some advice:-

• Don’t be deceived by glossy brochures and the hype of property fairs.
• Research areas as much as you can on the internet or your local library.
• Do come to Spain and look for yourselves without the pressure of inspection trips.
• Never exceed your budget.
• Always use a solicitor.
• Choose an accredited agent, who will assist you throughout and after the purchase. We recommend WiseBuySpain.com

Editor 13 April 2010

Banks obliged to report all transactions over 3,000 euros to the taxman.

The Government has decided to tighten fiscal control over the real estate sector, a sector that is under suspicion, and which the tax authorities are scrutinising closely as they believe it is more conducive to tax evasion than other sectors.

From now on banks will be obliged to “clearly” specify all the “methods of payment, whether cash, transfer, debit, cheque or any other form of payment”, used in real estate sales. They will also have to provide the personal details of the seller and the purchaser in each sale.

The aim of the tax authorities is to monitor “more effectively” provisions, payments and collections made in cash through financial or credit institutions when they exceed 3,000 euros. Banks, saving banks, and any other institution which provides collection management services to business people and professionals will now have to report annually any transactions that exceed this amount.

Previously, the tax authorities could access this information if needed by making specific requests to a bank, but under the new Royal Decree the information will “automatically” be sent to the tax authorities´ computers on an annual basis.

Credit: http://www.spainsolicitors.com/

Editors note.

In our opinion, this is an interesting and overdue development which can only be seen as a positive thing for property buyers and the property industry alike, giving transparency to what have been ambiguous areas and may help to remove unregistered property sellers from the industry, who neither pay taxes nor provide a safe environment for prospective property purchasers who have fallen foul of their unregulated activities.

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It is impossible to know everything about your property, your vendor, your builder and you cannot predict the future.

Most people who buy property in Spain don’t have any problems. However, you’ve most certainly heard unfortunate stories of innocent people who bought in good faith but later faced serious legal challenges, financial losses and sometimes even complete loss of their land or properties. Like you, many of these people were diligent, responsible and appointed good lawyers to represent them and their interests.

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The second part of the ITV program last week covered the fact that foreign buyers had bought plots and had built individual homes in Andalucía. It was not a question of “Land Grab” as has been rife in the Valencia area but a simple case of buying from a builder who did not have permission to build on “rustic” land, i.e. the land had not been ratified for change of use to housing or a public urbanisation by the autonomous community of Andalucía. The builder has made his money and is no doubt long gone and whilst it appeared in front of the cameras that the local mayor was trying to be helpful, the local town hall was not actually assisting in any depth to resolve the matter.

The program did not go into any specific areas of how the purchases were made, can we really believe that all of the buyers went through this builder in total faith without one of them using a solicitor? We heard that the properties had been registered and had habitation certificates but in effect were illegal because of where they are, built on rustic land. The question to be asked is that if solicitors were used to purchase these homes, whose solicitors were they? Suggested by the builder or found locally or recommended? In any case they failed to do their searches or from their point of view, were never asked about the land itself. Herein lies the problem, if you know nothing about Spanish land then find out and ideally before you throw thousands of pounds to the wind.

Another tip, if you are purchasing a plot of land to build your dream villa, you are advised to be careful when choosing where it will be. Before you even start to consider the purchase you must find out what is planned for the area in the near or foreseeable future.

There have been cases where people buy a plot, build their villa and then find that an urbanisation will be built around them. Then not only is your peace going to be shattered but when the infrastructure goes in for those urbanisations, you will find that you receive a bill for 20,000 euros or more towards that infrastructure, lighting, pavements and council facilities. No, you will have no choice but to pay it or sell up. This can even happen within established areas if you have land surrounding or abutting your property that someone else owns and either sells for building or builds on themselves.

It ends up as a sad state of affairs for those involved and many abandon their dream because of costs or ill health, for those who battle on, it is usually a long and arduous road within the Spanish judicial system and sometimes without a happy ending. Take time, beware the pitfalls that can arise.

Editor: 2 July 2009-07-02      Credit: Additional information from Buscar Propiedad S.L.

We waited with bated breath for the first in the latest series of programs designed to give Spain another mauling over property buyers who dreams have crashed, intertwined this time with bargain hunters. Having viewed the program it yet again showed the little thought that people give to buying homes abroad and also what happens when prospective buyers are pushed, cajoled or just plain pressured into buying a property, which they later bitterly regret and rue the day they ever set foot in Spain. However, was it Spain, was it the constructor or was it a case of company policy to get results at any cost, or did you forget, or maybe you just didn’t know how to really  disseminate the information that was given, blinded by glib talk and a rosy picture that forms in your head ?

Remember, we have all said it at some point, there is no such thing as a free lunch, so that probably applies to inspection trips too. Everything has to be paid for at the end of the day and that means sales and that creates pressure, on all parties, so, buyers beware! Also, we advocate the use an independent solicitor, ask questions and if you still don’t understand perhaps you are getting the wrong information and need to go elsewhere. In our opinion, “in-house” solicitors are not always independent of the company they work for or with.

Looking for a bargain can be fun, it doesn’t have to be pressured or filled with angst if you have given the matter some thought, think about where you want to buy and if you don’t know Spain, take a holiday or read the numerous books on Spain and there are copious amounts of information on the internet these days. You can always rent a property and test the water before you put the “pinkies” in and buy but even then, when you think you know everything (which you don’t) get help, employ a solicitor.  A good solicitor will look at the details of your prospective purchase before you buy.

So, you have bought a property and have been told it will be easy to rent out and the property is in an expensive area and cost quite a lot of money and you find that the urbanisation is unfinished and renters are not interested and the very people you bought through are no help and of course they blame the constructor. Whose fault is it? That will never be answered with any conviction, as you may have bought in the wrong place without genuine research about renting, the constructor shuts up shop and says that the companies selling the properties took his profit and the selling agent probably a big company says talk to the builder it’s not our fault. Well maybe it was, there are big companies that demand massive commission’s for directing their clients to and advertising specific projects and that was fine until the property bubble burst and prices fell, leaving the builder with a meagre profit with which to carry on. Invariably, too many properties were built at a time, forgoing quality over quantity, ending with a glut of houses to sell but in doing that, the discerning buyer turns away. The worst case scenario applies; the few buyers are left in an untenable situation and end up handing back their keys and appearing on TV programs! Never just hand back the keys, seek advice.

This situation was aptly demonstrated in the program with a gentleman brushing sewage from his door who now knows he was pressured into buying and a couple feeling that they are living in a war zone. However, some research into those particular cases evidences the fact that several urbanisations of the same buildings had been built and sold, not without previous or current problems and almost exclusively from new by a large property company, so why did the constructor close down, why were there no funds to complete the ongoing projects, perhaps the point is covered above? The property agency is no doubt happily continuing its practices on new clients.

Some construction companies build a small amount of properties at a time and sell them, then they go on to the next phase and do the same, small outlay and enough profit to see the whole project through to the end, it may take several years, but each phase if finished to the satisfaction of the buyer. A happy buyer tells other people looking at the next phases and the buildings speak for themselves if of good enough quality and selling is easier.  

Smaller property companies sell these types of property and their bread and butter is giving an excellent service to their clients because they cannot afford not to, their client base is small and they want them back and to recommend their services to others. Be a person not a number and enjoy looking at property. It will cost you a trip to Spain but it makes you independent and invariably you will see more.

You should know your budget and stick to it no matter what or as portrayed you will end up in a miserable situation and probably lose the home you saved long and hard for, if pressured about anything just say no, if they don’t like it there are other companies, places and properties to see. There are areas that give good value for money, the Costa del Sol may look exciting with a jet set life style and big villas but isn’t the point cutting your cloth and enjoying your home abroad? Think of your house as your Riviera pad no matter how small, you can chintz it up and holiday in as much style as the big boys but at a fraction of the cost! Beaches are free everywhere and areas such as Murcia, Mar Menor and the Costa Blanca south have much to offer and are still only a few hours from the “beano” resorts like Benidorm, the cultural Valencia with its magnificent buildings and have airport services to the metropolis centres of Madrid and Barcelona.

Don’t become a victim of paradise lost, just lower your horizons and find a delightful alternative.

Editor: 20 June 2009

Thousands of people have been on inspection trips to Spain, whether they have bought a property or not, some just want an insight into buying abroad, some are genuinely going to buy and others are just taking advantage of a free trip with no intention of buying.

At the end of the day, the inspection trip is not free, it has to be paid for by the company and as such they will put pressure on prospective clients either at exhibitions or on home visits in the UK, followed by the inspection trip itself.

Remember, these trips are subsidised by large companies, corporations or big development companies and they have one aim and that is to make money. The companies have to maintain huge budgets which are spent on glossy marketing material and advertising and they demand a return on their money. They may employ all sorts of marketing tricks and gimmicks to get people on planes to inspect property abroad, anything from limited availability for free flights to special competitions so that they know your contact details and follow up by bombarding you with phone calls from their telesales offices. They may even insist that you take a deposit of 3000 pounds or euros prior to leaving for your trip and then they have their foot in the door to a sale.

Their representatives are usually self employed on a commission only basis and therefore need to earn to cover their monthly outgoings and will exert pressure on a client to secure a sale. Failure is not an option or they lose their jobs and invariably are dismissed and stand to lose previously earned commissions. High risk but these companies charge large commissions and as such the reps feel they have a chance to earn a high salary by return, but they will probably do an 18 hour day to earn it and you will be chained to their side for most of that time, morning, noon and night! They will assess from the beginning whether you are a definite, might or no chance buyer and if the latter then your hospitality will be up and you will invariably be left to your own devices on the last day or dropped off early at the airport. The worst case we ever heard of at first hand was a couple who failed to buy from a large well known company, they were dropped at the airport at 12 noon when their flight was not leaving until 10pm, the flight was delayed and they had to sit in the airport until 3am the following morning before they could return home. The gentleman was disabled and they had little money to last over the period, not that company’s finest hour.

If you do decide to buy then everything will be put in place before you leave to seal the deal, in order to lessen the chance of you backing out when you return home and mull over what you have done. Some enjoy the trip and purchase a home without problems but for others once the sale has been made they become a number and then they are dealing with the company and not the nice rep they met in Spain and updates and resolutions to problems may become difficult.

Another option is to do it alone and that is great if you know what and where you want to buy and how to do it but remember the old saying, “buyer beware”, make sure you really know what you are doing or you may end up paying thousands more for a property from unscrupulous developers who see you coming. Not all people are honest; make sure you do not inherit debts on a re-sale property.

The alternative is to travel under your own steam to Spain and then you have the best of both worlds, you can holiday in the area and decide whether you like it or not and use smaller independent agencies for some of the days you are there, you can make arrangements before you leave. Those companies invariably give a more intimate service and show you properties that the big companies will not and re-sales at very competitive prices without the loading of the big company commissions.

All that is fine but the smaller companies have overheads too and although accommodating with time and information it is pointless them showing you properties if you have no intention of buying. Owners of re-sales do not want endless traffic through their homes just to be nosey they want potential buyers, so please, be honest as to whether you are in position to buy or just seeking information.

You can take it all at a leisurely pace without pressure but you should have given thought to buying and made financial arrangements before leaving, just in case you find that bargain property!

Editor: 23 July 2009

The property business gives an insight into the deep recesses of peoples’ thoughts and often we have used our knowledge to lighten the blackness! Why do people generally hate Estate Agents? Is it because they are not aware of the property selling industry or is it because the industry puts up a barrier against the client and as such there is little real communication on a personal level? Then again we all remember the bad things that go wrong and not the good. It is a service industry and no matter what a service is expected and must be given.

In the UK and Ireland when buying property, buyers and sellers usually use the local papers to pick one or more agents to deal with or go on recommendation. They walk in discuss their requirements and leave and then the only contact is when they have viewings or want to see a property from the information sheets they have been given or phone the agency to see if anything is happening. A property is bought or sold, the public deal through their solicitor and the agent passes into the night probably to be forgotten for ever.

In Spain it is different, potential clients may use advertising material in glossy magazines, papers or exhibitions to find out details of property available or go on recommendation. Once they decide to actually look at properties they either come through an agency or come alone to look and buy or find a local agent. That is of course if they know where they want to buy. Some buy on a whim, some with long hard thought and others buy without any knowledge at all. Overall, there is much more contact (or there should be) the client is taken on viewings; they eat and drink with the agent and generally have on going contact before and sometimes after the sale and in some cases become good friends.

It could be said that when dealing with a large company the client feels safer, they see other clients, big offices and copious amounts of advertising material, therefore it must all be true, but is it? In a crisis it has been just those companies who have struggled to survive. Also, many misery stories have been generated from large company sales. Pressure from the large company comes out of necessity to sell and if the client isn’t ready or just doesn’t see what they want, they may be cast aside.

Looking at the smaller company, they have to be competitive; they have a small slice of the market but must increase their personal knowledge of the industry because there are no “in house” experts to pass clients on to. That also gives rise to the fact that “in house” experts will not necessarily give independent advice and is that advice free? Invariably no, it is an extra cost. In that respect we have found that potential clients were happy to take advice from a small company but some then bought from a large company, feeling safer as one of many. Also, it must be said that there are illegal sellers still in Spain and you should check that the company you are dealing with is properly registered in Spain or the UK.

It is always better to take independent advice from a Spanish speaking lawyer and when asking for that advice don’t stint on the questions you ask, no question is silly if you do not know the answer. Make a list of things you want to know about and make sure you fully understand the answers and the implications of buying abroad. So many cases exist where buyers have lost their life savings or large deposits through going it alone because they thought they were saving the solicitors and agency fees. In many cases it can be money well spent; you obtain the right property and have a guiding hand throughout the processes. Buying a property does not have to difficult if you go about it the right way.

 Editor, original script, copyright reserved.