To sell a home in Spain on the best terms it’s important to hit the market with the right asking price, or risk wasting time and energy just to end up selling for less than you could have.
The best window of opportunity you have to find a buyer is when you first put a home on the market. “The most serious clients usually show up in the first month of marketing,” explains François Carriere, boss in Spain of the international agency Coldwell Banker. “After that interest tails off, so if you start off asking too much you are going to miss your best chance to find a buyer.”
Time is money, and the longer a property hangs around the on the market, the harder it is to sell. It’s as if it starts to smell bad. Then all you can do is start lowering the price in search of a buyer, and the chances are you will end up selling for less than you could have had you started with the right starting price, and take a lot longer to do so.
High asking prices put off buyers but also demotivate agents who don’t waste time trying to sell overpriced homes. If anything they use overpriced properties to guide serious buyers to other homes that look like good value in comparison. If you get lots of visits but no sale that’s a clear sign you are overpriced.
How many vendors start off with the wrong asking price? “Easily more than 50%” says Carriere. “The majority start with an asking price that is 15% to 20% too high. That’s why it takes seven months on average to sell a home in Spain, compared to two weeks in the US and one month in the UK.”
Why do so many homes go onto the market with the wrong price? Because many vendors are badly advised on asking prices, or choose to ignore good advice.
Low professional standards in the Spanish property business are partly to blame. Almost anyone can set up as an agent in Spain, so many vendors are advised by the wrong people. “The lack of professionalism is a big problem” admits Carriere. “Brokers with no experience or sales data give vendors unrealistic expectations in the fight to get listings.”
The lack of transparency compounds the problem. Vendors can’t check the sold price of homes, like they can in most other developed markets, so “they have don’t have a clear picture of the market,” says Carriere. Vendor’s end up believing what they want to hear, not what they need to hear.
Given the lack of transparency and professionalism, choosing the right agent is more important in Spain than other markets, and can make a big difference to your results “It’s the job of a professional agent to help vendors set the right asking price that buyers are prepared to pay, using sales comparables and good data,” says Carriere. Deal with the wrong broker and you might start off asking too much, waste lots of time and energy, and end up selling for less than you could have.
So what’s the best advice? “Hit the market with the right price and 10% negotiation room and you have a good chance of finding a buyer quickly,” says Carriere.
But selling quickly creates its own problems for agents in Spain. As Carriere explains, “If you sell quickly in Spain then vendors think you sold cheap, because people are not used to selling quickly. You do your job, you get good results, but then Spanish vendors think you have done something wrong.”
Compared to other markets in Europe and the US, the Spanish property market doesn’t rank well for efficiency. Transaction costs are high, transparency is low, the sales process gives you heartburn, and the standards of professionalism are wanting. All of which makes life hard for vendors (something potential buyers should also bear in mind, as one day they will need to sell). So don’t make life even harder for yourself. If you are serious about selling, find a good agent and hit the market with the right asking price, as you will never sell an overpriced home in this market.
I’m a fine one to talk. When I sold my boat, I started off asking €13,000 on the advice of my local boat dealer. Five years later I sold it for €4,999, having spent around €1,000 per year on maintenance. If I’d done my research and put it on the market priced to sell, say at €8,000, I would have sold straight away and saved myself a lot of time, hassle, and money. What I learnt is that if you want to sell, then price to sell and get out quickly.