Selling property in Spain
You would have to be living on Mars to not know all the recent problems in Marbella in particular but Spain as a whole. From openly illegal cash deals to under the table bribes for building licenses, there is not a corner of Spain trusted by the rest of the world.
The local press and political parties maintain this is excellent, a time to finally make bare the chest of corruption and to instead install the virtues of honesty and correctness in a system so corrupt that its roots are long forgotten.
Excellent that is for everyone except for the innocent owners of numerous if not tens of thousands of properties caught up in this nightmare. From licenses illegally gained but granted being revoked which is one end of the scale and along to developments where people have completed and are living in now forced to take legal advise after finding out their developments have been built on green belt land.
The political view ranges from full demolitions to legalizing the majority of developments in due course.
All very good news but hot air as far as owners trying to sell now have found. Recently banks have decided a first occupation license is required before granting a mortgage to a buyer. For owners desperate to sell this leaves one of two options. Keep the property until their situation is finalized – which could be years, or sell now. To sell a property without the relevant paperwork is nigh on impossible, after all who would want take on such a headache? This seemingly insurmountable problem comes hot on the heels of a heavily oversaturated and price sensitive market.
Seemingly there is no good news on the horizon except for one company I came across in my research. Direct Auctions SL, based in Marbella and headed by two veterans of the real estate industry, Barry McEntee and Inez Rix. The company has been in operation for nearly four years and specializes in selling properties fast.
As Inez says ‘we recognized there would be a massive oversupply in the Spanish market, creating a niche where some owners would have to sell fast. Most properties for sale are buried in and among the thousands of units all very similar and all at varying market prices, so we decided to be different.
By setting up an auction house, we market directly to buyers looking for accurate pricing structure and we deliver these properties in the room. Assuming there are several interested parties, the one willing to offer the highest amount wins the property. This method thus shows the true market value of a property. Our selling fee is only 2.5% - a huge decrease from the general real estate market averaging 6% and this helps owners to drop their price.
But surely one of the criteria offered is the properties have all their documentation in place – due diligence is one of the companies strongholds.
‘Ordinarily yes’ answers Barry, ‘but there is an answer for sellers without all the documentation. There are some buyers who would speculate on a positive outcome in the distant future and they would have to pay cash. The downside is these buyers will not offer anywhere near the current bank valuation of the property just in case they lose their investment, but at least it offers a solution to some owners having to sell.’
I asked about the ease of selling a property in this current marketplace which had all its documentation in place. Surely there are buyers wanting to invest in Spain and certainly in the Marbella area which for all its downside is still the most sought after area for the British to buy into.
‘We do have numerous clients wanting to buy into Spain, says Inez but only at the right price. This is a buyers market and buyers are driving a hard bargain. Even properties we offer at prices well below market value are still sitting on our books waiting for interest to be shown. Some deals do fly off the shelf as soon as we enter them, but in the main it is a few weeks until interest truly picks up, usually just before an auction.
We offer our properties via auction at a range of venues. In spring we have five auction dates with the auctions held at some of the biggest overseas shows in London, Dublin and Birmingham over 3 days at a time attracting thousands of interested parties.
We receive an average of 3,500 unique visits to our website every week, quite a few come through as enquiries but still the properties are taking time to sell.’
So is there a sure-fire solution to this ongoing situation?
Seemingly in this market sellers have two choices. The first is to lock up the property and forget about it for the next few years until there is some recovery in the marketplace, or to bite the bullet – get out now and use any leftover funds to recoup any losses elsewhere.
For further information on selling your property through Auction contact Direct Auctions 0871 990 30 90 or www.direct-auctions.com
by Roberta Hewitt
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