How to negotiate when buying a property in Spain - 12 Tips from a Professional Home Buyer

Buying a property in Barcelona, for international and expat investors, can sometimes seem like a jungle or the Wild West. There is probably a lot less regulation and transparency than what you are used to. 

So you’re thinking about buying a home in Barcelona. Would you like to make sure you use the best negotiation tactics in order to squeeze the most value out of your hard earned money? Then this guide should provide you an excellent overview of how to do that.  

My name is Benny, and for 15 years I’ve been helping my clients buy and sell apartments in Barcelona and Spain. 

My most popular service is called Real Estate Personal Shopper, where I guide our clients through the whole process so they find the property of their dreams at the best price possible, and save time, money, and potentially costly mistakes. A safe and clean buy is of the utmost importance to our clients. 

Here is the most valuable advice I can give you on how to negotiate the purchase price of property in Barcelona and in Spain in general: 

1. Arm yourself with market info, comps, etc..: 

Appraising a property in Spain is more of an inexact art than a science and many times the property you like will be inaccurately priced. It helps to run some numbers in order to better defend your offer.  

The more you can defend your offer, the stronger your negotiation will be. 

You want to know how many days the property has been on the market.

Find comparable properties listed at lower prices.

Find prices of actual recent sales in the same building or on the same street in the registry (something we have access to for our clients). Armed with all of this you’ll have a much stronger position.

Also remember, many times properties are priced by taking the average price per m2 and multiplying it by the number of m2 the property has. However, from the perspective of an investor, you want to look at the potential rental yield and reverse engineer the final price in relation to the expected ROI you want to receive (approx 5% gross is good). Sometimes mocking up these ‘investor’ numbers will give you a lower price point and an intriguing defence to make a more aggressive offer.   

2. Use any improvements the property might need to bargain:

Try and stay away from a common but not very effective way of negotiating, which is listing your personally perceived faults of the property. Meaning, “I’m offering X because there are only 3 rooms instead of 4 and I really wanted something with 15m2 more space, and there’s not that much natural light…so it’s not really my perfect flat”. 

The flat is what it is, and in my experience this type of strategy both offends the seller and is not very effective. 

Instead, look for valid things that you might need to invest into the property. There might be building works that need to be done in the future. The flat might have outdated systems or installations. The bathroom and kitchen might be dated. 

3. D D DILIGENCE:

Doing due diligence is of the utmost importance when buying a property in Barcelona. First, in order to see if there are any problems that will cost you money in the future and/or make the deal not as interesting to you. Secondly, info we get from diligence can often be used to further negotiate the purchase price. 

Some of the things you want to look into are: 

- That the property has all of it’s documentation in order like the ‘cedula de habitabilidad’ (zoning permit). 

- That the building has passed it’s ITE (technical inspection). That there aren’t costly future works that need to be done (those will eventually be partly paid by you).

- That there isn’t an ‘affectation’ of the building in the city’s urban planning. This can be a very serious problem for several reasons. Many buildings in Barcelona are marked with these zoning issues. Theoretically they could one day be torn down by the government. The property owners are forced to sell at a government set price.

- It’s good to see the last few minutes or ‘actas’ from the community meetings to see in general what is going on and if there are debts by other owners in the building and if there are future costs or ‘derramas’ planned. 

- The ‘nota simple’, which is the updated record of the flat in the registry, which will show you wether the flat has any debts against it, what type, etc…

The more info you have the stronger your potential bargaining position will be, but you need to know how to use this info in your favor.

4. Play it cool: 

This might seem obvious but I think it’s worth mentioning. I’ve seen clients fall in love and start giddily praising the property and everything about it with stars in their eyes. Needles to say, that doesn’t really help you in terms of negotiating a price. 

When you find the right property you usually know right away, it’s sort of a gut feeling. 

But if this happens to you, you should play it cool, don’t let on that you just found “THE one”. You don’t have to be aloof. Play it cool. Let them know it could be an option and that you have other options to see. This will help you setup a more effective roadmap for negotiating the price.  

5. Slow and steady does NOT win the race:

You should do all the preparation before hand so when you see the flat you like you can act quickly. Having a reserve payment ready to send with the reserve offer sheet for example. 

Where you can find a lot of bargaining power is if you’re either a cash buyer (not using financing). Or if you have a pre-approval on your financing. Venders are often interested in a ‘fast close’ and the faster you can close the more leverage you’ll have. You might say “I’m able to pay 80% of the asking price, but we’ll be signing in notary and you’ll have the full amount in 7 days”. Not always, but sometimes that really moves the needle. 

6. More deposit = more interesting:

Not everyone can buy a property without financing in cash. One thing you can do that is effective is to offer a higher deposit or ‘arras’ payment. “I’m able to pay 80% of the asking price. However I'll be able to pay you 15-20% in the arras contract (the standard arras payment is 10%). We’ve found this works well because venders are motivated by getting more of the total price up front. Of course this also depends how motivated they are in general to sell.  

Which leads us to our next advice…

7. Determine motivation as much as possible:

Why is the vendor selling? Did they just buy a new home and need to sell this one? Are they getting divorced? Is it an inheritance between siblings the they want to liquidate asap? How long has the property been on the market? How many price reductions has it had? Have there been other offers? If so why were they not accepted?

The more you can play detective and find the answers to these questions the better you’ll be able to gage how motivated (read desperate) the vender is to sell and hence how much you can push on a price reduction. 

Asking polite but direct questions to the listing agent can often get you quite a bit of info. In the end, he or she is trying to close a sale. Often they are surprisingly forthcoming with info to facilitate this end. 

8. Your actual offer: 

How much margin there will actually be depends on quite a few factors. As a very general guideline, a 5-10% offer under ask is aggressive but reasonable. Especially if you can back it up with the right arguments and strategy. Of course how hot the property is, how long it’s been on the market, and the vender’s actual level of motivation will also come into play. 

Throwing out low ball offers doesn’t tend to work too well and can be counter productive in Spain. You run the risk of offending the vendor and having them not take you seriously or doubt your credibility.

Of course sometimes a price seems almost too good, and there are instances when this is the case. Usually it is the result of a very motivated vendor. If you analyse a deal and the price seems great, you can actually lose it by making any offer under asking. Sometimes it’s even worth putting in a very slightly higher offer in order to get a leg up on the competition and jump to the front of the line. 

9. Set a firm limit with the agent:

This might seam obvious but set a firm limit with the listing agent. They will feel they have gotten you to your best offer. Now they will work on bringing the owner down. Always in that order, though, because it's the vendor that pays them. 

10. Use a buyers agent to avoid conflict of interest: 

There are quite a few factors working against you when looking to buy a property in Barcelona. Not having proper representation is where we see buyers lose the most money. A real estate buyer's agent, or real estate personal shopper, as we call our service, takes away the inherent conflict of interest in the Spanish market, and ensures that you have a professional looking out only for your best interests. Simply put, it will save you time, money and costly mistakes.

11. What's the bottom line?:

Ask the listing agent for what they think the sellers bottom line might be.

I know this must seem counter-intuitive. I mean, who's going to tell you that?

They probably shouldn’t give up this info but you'd be surprised at how often they do so.  In the end the listing agent is trying to make a sale and get their commission. They often will let you know at least a range of the lowest the vendor will go. 

12. Make the right initial offer:

Your first offer will set the basis for the negotiation. Depending on the a milieu of things, your starting offer should be substantial. At the same time though it should be realistic and not offensive to the vender. 

I really hope I've given you some deeper perspective on purchasing a property and the best ways to negotiate in Barcelona and Spain in general. I'd love to hear your feedback in the comments or if there are tactics you think I should add. Have you had good luck in negotiating when you've bought property in Barcelona? If you'd like some free Spanish real estate advice I'd love to hear from you any time at benny @ suitelife dot com or text/whatsapp @ +34 615 38 47 45! ~Benny Mouckley

SO WHAT IS THIS REAL ESTATE PERSONAL SHOPPING SERVICE?

Hi! I'm Benny, and I'm a real estate personal shopper, or buyer's agent.

I've been in real estate in Barcelona for over 15 years now and I've done it all. Rentals, sales, investments, golden visas, buildings, hotels, you name it...

My biggest passion though, is helping my clients buy properties in Barcelona and Spain.

You see, in Spain, there is usually only one agent involved in a sales deal, and although they are supposed to be 'intermediating', they get paid by the seller...

This is a HUGE conflict of interest. They will never fight for the best deal for you, the buyer.

They want to nudge both sides to the middle, push the deal through, grab their commission and run.

THIS IS WHAT A REAL ESTATE PERSONAL SHOPPER DOES, AND WHY IT WILL SAVE YOU MONEY AND YOUR SANITY

We act as your exclusive real estate buyer’s agent, guiding you on your journey from start finish, to make sure you find your ideal property, at the best price possible, and that you make your purchase safely without any costly surprises or mistakes.

SOME OF WHAT THE SERVICE PROVIDES:

👂🏻 Initial meeting where we dive deeply into your needs, give you feedback, and establish exactly what you’re looking for, as well as answer any questions you might have about anything about the process and requirements to buy.

🏘️ Extensive and exhaustive property search. We have access to the entire Barcelona market, as well as tools which give us inside info on properties. This way you’ll never miss an opportunity, we have everything that exists on our radar.

👀 Property visits. We will take care of all the logistics of setting up visits for you as well as accompanying you on the visits, acting as your eyes and ears, asking critical questions, taking videos for you for future reference, etc...

📊 Analysing. We’ll help you analyse each of the properties we see in a way that’s customised to your needs, situation and desires to help you make the best choice.

🩻 Diligence. One of the most important steps, we’ll do all the diligence for you looking deeply into the property’s situation legally, urbanistically, and in terms of potential future community costs in order to help you avoid a potentially costly future situation, and to give you more ammunition when negotiating.

💶 Negotiation. We have years of experience in buying property in Barcelona and know all the best strategies and leverage points in order to make sure you get your dream property at the lowest price possible.

⌚️ 24/7 access to us. We are simply always available to you.

JUST SOME OF THE BENEFITS:

⏳ Your time is precious. We save our clients literally 100’s of hours in each of their journeys, doing all the hard and tedious work for them so they don’t have to. This is a big project that requires countless hours of dedication in order to achieve the best results, but for our clients, they experience it as fun and pleasurable as if they were shopping with a friend.

👫🏻 0 conflict of interest. The way the market is here, there is usually only one agent (who get’s paid by the seller btw) between both sides, and this is an inherent conflict of interest, which always ends up costing you money. We help you buy as if we were buying the property for ourselves.

🤓 An expert on your side. With a deal this big there are many moving parts that need to come together, and having an expert on your side, who’s been doing this for 15 years, always makes the operation more profitable for you.

🤯 Costly potential mistakes. We offer you peace of mind. The market here is not as regulated as you might be used to. There are issues areas that, if not looked into properly, will not be declared to you and will often represent unseen future costs and worries, affecting your investment and happiness. We make save you these future costs.

THE COST:

As we work tirelessly and exclusively for the buyer there is of course a cost for our service, which is a small percentage of the final purchase price of the property. However, what we see with all of our clients, is that the amount of value that we provide them in terms of time and aggravation saved, providing expertise in negotiation, and avoiding potentially costly mistakes, we always save our clients considerably more than they pay us.

On top of that, it makes the whole process extremely enjoyable. It feels like shopping with a friend, but if your friend was an expert and shark. We always end up becoming friends with our clients and finding them their dream property.

If you'd like to know more about what we do and if we can help you, or just chat and get some free real estate advice, we'd be super happy to hear from you!

Cheers,

Benny

Hi there! I'm Benny, and I'm an expert on real estate in the Dominican Republic as well as Spain.

Real estate is one of the best investments around, am I right?

But we usually look for real estate investments in our own country or region as they seem more familiar.

If you’re looking to maximise your profitability though, I find that looking internationally is the way to go.

Real estate in the Dominican Republic is exploding right now, with no signs of stopping. Here is why you should be looking right now to buy new build investment properties there:

Why to Invest in Real Estate in the Dominican Republic Reason #1: Strong Covid Rebound

The New York Times says that the DR is “a rare pandemic success story… In 2021 the DR surpassed 5 million tourists, more than any other Caribbean destination… and had its best year economically in 30 years”.

Tourist numbers have not only recovered from pre-Covid, they are trending up and breaking records. February 2022 for example set a record with almost 600.000 tourists coming to the DR. Their goal is to have over 7 million tourists in 2022.

Making this all possible is a government system that both has very lax Covid controls for its visitors but at the same time 100% vaccination of its tourism industry workers.

Why to Invest in Real Estate in the Dominican Republic Reason #2: Your money goes further in the DR

This is obviously relative to where you live but I live in Barcelona, Spain. Here, 100 to 150 thousand USD wouldn’t even get you a breadbox. A nice new well located property for that money is out of the question.

When talking about real estate in the Dominican Republic though, for roughly 100 - 150 thousand US Dollars, you can get a brand new 2 bed 2 bath property by the beach in Punta Cana with as many amenities as you can dream up. And while you’re not using the property to vacation it can be rented on touristic sites like Airbnb and be making you passive income.

Which leads us to our next point.

Why You Must Buy Real Estate in the Dominican Republic Reason #3: Higher profitability

Buying property in the Dominican Republic is so profitable for a few reasons.

If you buy properly you can expect to pay both 0% land transfer tax (that tax is 10% of the purchase price in Spain for example) and 0% property taxes over the first 15 years.

The ratio of the purchase price to the potential rental yield and capital appreciation is very significant. Think about it, you’re paying a relatively very low price for the quality of the property you’re getting, but at the same time the tourists you’re catering to are mostly from Canada, the USA, and Europe and are happily paying the type of rates they are used to in their countries.

If purchased and managed properly, you can expect to yield up to 15% annually on the rental income as well as a minimum of 7% anual capital appreciation if you get into a good project early enough.

Why to Buy Property in the Dominican Republic Reason #4: Tax incentives

I’ve touched on this but the tax conditions when buying real estate in the Dominican Republic are very interesting. The government has made an aggressive effort to attract foreign investment and it’s clearly working and has been a driving force to their accelerated economic growth.

If you buy a property that is part of a special government program call “Confortur” you can expect that many of your initial closing costs and tax obligations to be diminished or scratched.

If you do some more investigation and with the help of a professional setup a Dominican LLC and offshore accounts, you can even further enhance your bottom line.

5. Why Not to Wait to Buy Real Estate in the DR #5: The Golden Visa

The Dominican Republic has a very attractive residency by investment program where if you invest just 200.000 USD, you qualify to receive permanent residency in the country. So for people looking for permanent residence somewhere else, or fiscal residency, this is a very low barrier to entry.

After only 2 years of permanent residency you will qualify for citizenship as well. The DR allows dual citizenship so you don’t need to give up your existing one.

6. Why Not to Wait to Buy Real Estate in the Dominican Republic #6: You Can Vacation at Your Property Whenever You'd Like

What’s better than having a gorgeous and highly profitable income property in the Caribbean?

Being able to book it any time you want and enjoy your own vacation! You get total flexibility to stay in your home whenever you want and of course you greatly reduce the cost of your trip as you only need to pay for flights and not hotels.

Reason #7 Why to Buy Real Estate in the Dominican Republic Right Now: Crazy growing economy and top quality tourism

The Dominican Republic is the biggest economy in the Caribbean and one of the fastest growing in Latin America.

They’re really doing everything right.

The country is gorgeous with its plentiful natural beauty and turquoise warm seas with white sandy beaches. It oozes culture.

It’s safe. The people are warm and friendly and speak English. It’s politically very stable and always has been. And there is just so much to see and do.

Well, that’s it for now!

If you’d like more information or are interested in investing, I would love to hear from you and have a chat about how I can help you. My company, SuiteLife, has just signed on to be brokers for one of the most exciting and recognised new build developments in Punta Cana. The properties are selling quickly but there is still time to get in on the 'ground floor' so to speak. If at the very least I can answer any of your questions or just give you some friendly free real estate advice, I'd be happy to do so.

Benny Mouckley - benny@suitelife.com - Whatsapp +34 615 38 47 45

Hacked by CoupDeGrace

Hacked by CoupDeGrace

Hacked by CoupDeGrace

Hacked By Tempix 0day

Hacked By Tempix 0day

Hacked by CoupDeGrace

Hacked by CoupDeGrace