Negotiate Your Way To A Great Deal...

Scope for Negotiation
ALIS is keen to assist you in getting the best value for money out of your Spanish property, and there are a few points that you should bear in mind before you sign on the dotted line. Firstly, it is important to recognize the differences between the UK and Spanish property markets; and what the margin for negotiation might be so that both parties are satisfied that they have struck a good deal. In the UK, vendors are typically allowed the freedom to drop the price by around 95 per cent of the asking price, as even in a good market they rarely expect to sell at this. If you manage to haggle them down to 90 per cent you have done extremely well, and it is unlikely that they will be willing to discuss reductions beyond this mark. However, the strategy in Spain is very different, with developers deliberately pegging their prices at a much higher rate than they expect to receive, enabling the buyer to knock them down by several thousand Euros, as much as 35 per cent in some cases, and walk away feeling that they have been granted a really exclusive deal. Others will be more open about their pricing structure, advertising the property with a given discount from the outset. Meanwhile, those in a prime locations such as first line golf course, beachfront or penthouse homes, which developers know will sell quickly, might be advertised at the asking price from which there will be no scope for negotiation. There is also less flexibility on the price of new off plan properties, but this often depends on how sales are looking at the time.

The best advice is never simply assume the one size fits all UK style strategy of negotiating at around 5 to10 per cent, and if you are uncertain of the lengths that the vendor will go to in order to secure a deal then don’t be afraid to test the water. After all, the worst that they can say is no, in which case they might offer an alternative solution which will still swing in your favour!

Do Your Homework
Another useful negotiating tool is to find out how long a property has been on the market for, and how long has it been stagnant at the current price. A property that has been for sale for sometime could be overpriced, giving you licence to try to encourage the vendor to reduce it to something more realistic, and more importantly, within your budget. Alternatively, if it has recently been reduced it is likely to be snapped up more quickly so you better act fast if you are really interested. If you are buying through an Agent or Property Advisor, they should be well placed to offer guidance on how flexible a vendor is likely to be, which will enable you to compile a sensible viewing list of properties that are within reach. This will help to save time and prevent disappointment if something you have your heart set turns out to be beyond your budget.

Sell Yourself
If you wish to get a positive response from the developer or vendor, then it is important that you also promote yourself as a serious buyer. Both are quite accustomed to receiving a trail of viewers through the doors, all in search of their dream home in the sun. However, the reality is that only a fraction of these “potential buyers” is actually in a position to negotiate a sale, whilst the remainder are just window shopping and will continue to dream for the time being. Others will attempt to negotiate a purchase, putting in an offer long before they have looked into finance and without a penny to invest, based on the assumption that they will not have any trouble so can deal with the boring stuff later.

This attitude is extremely frustrating for vendors, who have learned from experience that it is not worth wasting too much time or patience in accommodating their demands until they are in a better position to complete. Therefore, whilst they will not be impolite or upset the viewer on the off chance that they might return in the future, they will not go over the top to gratify them either!

To avoid being labeled as a “time waster” it is important to present yourself as someone who has all of their finances in place, even if this is only an agreement in principal from the bank, or as a cash buyer who is in a position to invest a soon as a desirable offer is on the table. If the vendor knows that you are serious and would like to complete as soon as possible, you are more or less guaranteed their undivided attention and in a favorable position to get exactly what you want!

Gifts
In spite of the continuing poor state of the Spanish economy and extremely shaky property market, some builders are still reluctant to publically reduce their house prices, perhaps because this gives the impression that they are struggling to attract interested parties. However, they might be more willing to reward potential buyers with the offer of “gifts” included in the price, such as a furniture pack, air conditioning, a private swimming pool or even a car. The sum of these can easily substitute a sizeable discount, but the developer is more satisfied with the result as they have still received the asking price.

Be Realistic
Before you enter into negotiations of any nature it is important that you decide on a maximum budget that you are prepared or able to stretch to, and do not be tempted to spread your finances too thinly. It is best to have this figure clear in your mind before you undertake any viewings, to avoid setting your heart on something that you simply cannot afford. It is also vital that you keep this price limit to yourself during the early stages in your property search, which will give you greater bargaining power later on. Once you have reached your limit, make it clear that you cannot pay any more than the offer on the table, and it is then up to the vendor to accept or decline. Adopting this open strategy will save you time in the event of your offer not being accepted, allowing you to move on other properties which are more suitable rather than dwell on something that will never happen.

Finally, ALIS recommends that you remain optimistic and realistic throughout your search, as ridiculously low offers may be taken as an insult and will not bode well for further negotiations should you wish to reconsider! Do not expect the seller to simply accept your first offer as this might not square up to their expectations; and if it is a property which you really want, do not feel too proud to increase your bid if it is still within your budget, even if you have already made what you hoped was your “final offer”.

Primarily, the aim of the venture is to secure your dream home, and even if that means eating humble pie you will be grateful you did when you have the keys firmly in your grasp!