Editor’s note: A reader of mine recently wrote to me about her experience of house-hunting on the South Costa Blanca. She agreed to turn it into a Q&A for the benefit of other readers.
Answers from Agatha and her husband, from Carlow in Ireland.
Q: What are your property requirements, location, and budget?
A: We are looking for a 3-bed 2-bath villa, detached or semi detached, with a pool, in the Orihuela area of the South Costa Blanca, because of the good infrastructure in that area, and two airports to choose from – Alicante and Murcia. We want to be close to shops, restaurants and 5 to 10 minute drive to beach. Our budget is €150,000 to €200,000 to include all legal fees.
Q: How did you go about searching online, and what were the results?
A: I researched over one year approximately, mainly using the portal Kyero.com. There are plenty of properties for sale but not too many with the criteria I was looking for. Just to compare, I was looking at investing in Florida, but through my research I found the overheads a lot more expensive in Florida than Spain. On the other hand, in Florida the property database and information is terrific. If you research on Zillow, for example, you can find out how old the house is, how many times it has sold, taxes on the property, expected future projections for price increase or decrease, and rental projections. Spain is the complete opposite. There is little or no information on the history of the property, but perhaps I was looking in the wrong place!
Q: How did your house hunting visit go? How many agents did you deal with, and what was the service like?
A: We had two full days viewing booked prior to arriving so it was busy with an average of two hours time per agent/property. We dealt with 5 agents, and looked at 12 properties. Out of the 5 agents we dealt with, 3 of them had an office, whilst two of them met us at the property, and did not have an actual office, which we didn’t know in advance.
The first agent, who had two offices, showed us 3 properties, and I found the sales lady we dealt with to be very nice and professional. But I wondered why they bothered trying to sell two of the properties as they were not well presented (Editor’s note: They might have been put-off properties, which agents use to lower expectations and get clients excited when they are shown a more attractive property). The last property we visited was very well presented and we liked it, but the owner was present while we were viewing, which I find a little off putting.
The second agent we met in a car park near the property. He did not have an office, he spoke a lot, and I found he could not make eye contact, but he answered questions very well, and I found him to be honest in his answers. He showed us two properties, both well presented, however one of the properties was advertised as a 3 bed but in reality it was a 2 bed property.
The third agent, who had several offices, was certainly very talkative, and talked up the market a lot while showing us 3 properties, the first of which had a sign right inside the door stating take off your shoes, and then in the main bedroom the bed was covered in a layer of see through plastic with a big sign saying do not sit on the bed. Again I found this intimidating as a viewer. The house was well presented, but there were shoes belonging to the owners on display in various rooms throughout the house, which makes you would wonder if they really want to sell. The next property was very well presented, but the bedrooms were downstairs and living area upstairs! The agent was quite upfront about not making a cheeky offer, so I got the impression he was trying to tell us what to offer if we were interested in any of the properties. The last property we visited with him the owner was present and she showed us around, something I am not used to.
The fourth agent we agreed to meet at 11 am but on meeting him he seemed disorganised as the property we were to view would not be ready until 12 pm that day, so he brought us back to his office to suggest more properties that we were not interested in. Eventually we got to the property, which a next door neighbour had the key to, and inside the property was very presentable, but outside need some renovation. Again this agent insisted on introducing us to some neighbours, which we had no interest in doing, then he drove us around the neighbourhood, which made us late for our next appointment.
So the fifth appointment we did not make – we arrived in the vicinity of appointment late and could not find the office. I phoned twice but the phone rang out so I emailed to say we would cancel the appointment and apologised.
Q: How did you find the market? Alive and kicking or dead and buried?
A: I found the property market certainly alive and kicking, and if I you believe some of the talking it up it is a great business to be in at the moment. Estate agents on every corner that had not been there previously (we owned a property in this area from 2005 to 2012). There is a lot of new building going on, we were there in early January and the area itself was busy and some nice new restaurants.
Q: What did you think of the properties on the market? Did you find a good selection of properties for sale, and what did you think of prices and value for money?
A: Out of 12 properties we viewed, personally I only liked three of them and thought the prices were right, one of which we put an offer on. The three I liked were very presentable, well laid out, south facing, with a pool. Some of the other properties were very overpriced for the location; for example one of the properties had a north facing pool with a large plot of empty land behind it where you don’t know what will be built, and then the AP7 (motorway) behind it. We struggled to find it with a GPS and thought it was very overpriced even though it was lovely inside. We did not think any of the other properties were good value considering their locations.
Q: Did you find a property you liked?
A: We did find a property we liked and it was one we had earmarked before we went out to Spain. We went to look at it from outside a couple of times prior to viewing, and then again after viewing at different times of the day – including at night to check if we could hear noise from pubs and bars near by – so we were happy to put an offer in. We asked for a second viewing to see if we still felt the same, and we did.
A: What happened next?
A: We went back to hotel to discuss our tactics and talk through the other properties we had seen but none of them were right for us. So we put in a very low ball offer 20% below asking price to test the waters. This was rejected. As we are cash buyers and we hoped to seal the deal within six to eight weeks we came back with another offer 13% below the asking price. We put in the offer and we went for a swim in the hotel to relax. Judging by what the estate agent was saying we felt our new offer would be rejected but we were not prepared to go any higher. Sure enough when I went back to the room an hour later there was an email saying our offer had been rejected, but on my way back down to the pool to let my husband know the estate agent rang to say that the vendor had done a u-turn and accepted.
Q: What was the procedure to close the deal?
A: We went to the estate agent’s office to sign the reservation contract and pay a deposit. Before we signed we enquired about the Habitation Certificate (Editor’s note: all properties need an Habitation Certificate, or Cedula de Habitabilidad), and also queried if planning permission existed for the third bedroom, which we had also asked when we viewed the property. We were informed that all was in order and that the Habitation Certificate was up to date until November 2016. The contract stated completion within 6 to 8 weeks, which we were okay with as we were cash buyers.
We returned home to Ireland tired after a hectic couple of days but glad we had been successful in finding a property to buy. Next we informed our lawyer of our plans to buy (we already had one from owning our previous property, and also had NIE numbers), and open up a bank account, which our Spanish lawyer was also able to help us organise. I got a quote from them and paid a deposit upfront for their work.
All was going well until the end of January. Firstly my lawyer emailed the contracts and asked us to sign them, but I enquired again about the Habitation Certificate, as I did not want to sign until she had seen this and was happy. Two days passed with no new until I emailed the estate agent enquiring about measurements for furniture for the property. Then bang! my solicitor emailed saying not to sign the contracts as the third bedroom and pool were not on the title deeds. What a blow this was. To say we were disappointed is an understatement, as we had asked several times about the extension in particular, and had been informed by the vendor that they had got an architect at the time, and it was all in order. The following few days were a flurry of emails and phone calls back and forth between estate agent and solicitor both telling different versions of the story. I did not know who to believe; the estate agent convinced me the third bedroom was a garage that had always been there. It had been converted into a bedroom and now just needed a change of use, which could be done in the Town Hall, so the only problem was the pool. I was trying to convince my solicitor that all was in order, and that the garage was always there, and had just converted into a bedroom.
Then my solicitor informed me that the title deeds of the property stated a built size of 90m2 but the property being sold was 98m2, so there was 8m2 unaccounted for that needed to be measured by an architect, and a report on the extension and pool was needed. Furthermore, the vendor would have to get permission from the urbanisation’s community of owners that they agreed with the extension and pool. This would take time as the AGM was several months away. The vendor would have to put to a vote at the AGM for the legalisation of the third bedroom and swimming pool, and have to wait for one month after that so that anyone not present could be emailed to cast their vote.
So that is where we are. Once the vendor has agreement from the urbanisation, and the architect’s report is done, we can then proceed to the notary and get the extra room and pool put on the title documents.
The estate agent proposed another solution, suggesting we complete now and withhold some of the money pending planning permission being granted, but it turns out we would have to pay the full amount in the end, with or without planning permission. Needless to say we did not go with this! We did, however, offer the vendor a lower amount because of the delay in completion, which now looks like five months later as opposed to 6 to 8 weeks from date of reservation contract.
Q: Any advice for others looking to buy in Spain?
A: Research the area, do a lot of research online, and go on holiday there prior to buying. Before we bought our first property back in 2005, I did a lot of research on the area, and we weren’t disappointed.
With regard to what type of property you want to be clear about your needs and how you will use it – is it going to be a holiday home where you will use it every couple of months? Do you need to rent it out to cover the mortgage? Location is everything, as the day you buy is the day you sell (Editor’s note: this is a very good way of putting it). Lastly, haggle down the price and make sure to ask plenty of questions. Sometime you find the answers you get are far from the truth
Happy house hunting!
Editor’s note: A couple of thoughts came to mind reading Agatha’s answers. 1) It’s best to find one, maximum two, good agents and do all your search through them. Pretty much all the properties on the market are available to all good agents, as in most cases agents collaborate with each other in order to make a sale. If you go with one good agent you will get more dedication from your chosen agent, and waste less time dealing with lots of agents, some of whom don’t even have an office. The problem is, how do you know in advance which agent to work with? I’ll soon be offering a service to help solve that problem. 2) Get your lawyer ready before you sign any documents or pay any deposits. 3) It’s definitely worth getting a survey done before you buy a villa in Spain, and get the whole property measured up and compared to the deeds, so you know exactly what you are buying. As I wrote in my news bulletin last week, discrepancies between the deeds and reality are highly common. They are not always a problem, but you need to know what you are getting into. 4) And finally, Agatha’s comment that the day you buy is the day you sell is so true. Whenever you buy, you should always have an eye on how easy it might be to sell one day. Falling in love with a property is one thing, but getting stuck with it is another.