Last week we discussed ways in obtaining important reductions when buying a home in Spain.
While, we disclosed information whereby you may obtain a reduction of between 5% to 30% in the value of a house, if you have ready cash available; you have direct access to funding or if you are a subtle negotiator, this week we will rolled up our sleeves with items such as direct negotiations with the seller or ways of obtaining transcendental info from the local Cadastral Office.
Negotiation with the property owner.
Once you have visited the property, it's time to negotiate with the property owner. This is the time to make full use of the information you have gathered and inform the seller of similar properties in the same area or better ones on the market at a cheaper price. Obviously the information must be true in case he calls your bluff.
If negotiation is done without intermediaries by both parties, discounts of between 5% to 30% can be achieved. It is a good idea to make a complete list of those items that you have found on other properties and to put a price against it to be able to discount it off the original asking price. For instance if one of the other properties you have seen has a swimming pool of let's say 10m x 5m, find out how much a similar pool cost and discount it.
The buyer has to bear in mind that, generally, the amount offered by the owner is higher than it actually expects to receive and has incremented a certain amount because he expects that the future buyer will prompt to reduce the original asking price.
Typically in today's market, sellers are flexible and do not put non-negotiable conditions, they are happy enough to see someone interested in the property as they are well aware of the excess of stocks in the current market. Also, a quick negotiation is effective for both the seller and the buyer, because the longer a sign "For Sale" is hanged on the façade, the lower the price has to come.
Therefore, the buyer should propose the lowest amount you have seen around the area for a property of similar characteristics or a cost up to 50% of the asking price. If a negative answer is obtained (more than likely) from a hurt seller, you can gradually increase 5% to finally achieve a reduction between 10% and 30% of the original price.
Obtain a "Nota Simple" on the property.
There is never sufficient information obtained prior to a negotiation. The more information is previously researched the better.
Info from the Registrar Office may let you know if the property has been inherited or if there are any pending charges on the property.
With this information, the buyer will have to negotiate a valuable argument. If the property has a mortgage or an important charge, more than likely that the homeowner is willing to sell quickly and you can press for lower price.
Have a valuation report on the property.
As a buyer you should have clear the price you are willing to pay. In this regard, it may useful to request a valuation carried out by an architect, if as a buyer you are very interested on a particular home, an official appraisal can may give you a strong argument to be put to the seller.
Often the survey value of the property is between 10% to 20% lower than the price requested by sellers. These percentages take into account factors such as location of housing, characteristics of the area, depreciation for aging, etc.
There are zones where the scarce supply of properties on sale makes the reduction margin scarce, but there are many properties for sale where it is easier to achieve a lowering in price.
Make the offer.
Buyer must set the exact amount willing to be paid and make an offer that is below the value obtained from the survey. The most logical thing is to make a proposal to the seller at a discount of 20% or 25% on the selling price. Overall, at this time, homes are being sold with similar discounts as stated above. In this sense, in areas where there is a high stock of homes for sale is easier to get a larger discount which could well go up to the 40% mark.
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