CRISIS – WHAT NOW?

 A  1,120 word article for

Olive Press

By

Nick Snelling

CRISIS - WHAT NOW?

Few things are more traumatic than being unable to sell your home.  However, to realise that you are in the midst of a property crash with the price of your property disappearing into a vortex is positively terrifying.  All of a sudden, to your horror, you can find that your greatest financial asset no longer has a value that you recognise and, devastatingly, is something that you cannot liquidate easily.

So, what can you do?

Firstly, you must come to terms with reality and ruthlessly dispense with any absurd ‘glass half full’ optimism.  Understand the current marketplace, appreciate its medium term lethality and make a ‘call’ as to whether you really want (or need!) to sell your property now.

Ask any addiction industry professional and they will assure you that no alchoholic or drug addict can make any recovery until he fully realises the scale of his problem.  As a property seller, you must do the same to have any chance of successfully achieving a sale.

Be under no illusions, this is a major property crash.  There is no other kind or accurate way to describe it.  In Spain, quite simply, too many properties were constructed for too long whilst prices rose to levels that were inflated beyond any semblance of reality.  If there had been no credit crunch then there would have been a property slump and possibly a crash in any event.  However, the world credit crunch did occur and has made matters in Spain infinitely worse.

Already the Spanish construction industry has ceased to exist in any meaningful sense and unemployment levels are projected by the Spanish government to reach 16% this year  - and will probably exceed an appalling 20% or more in reality.  Massive debt in the UK and the tumbling value of sterling to the Euro mean that the volume of buyers coming to Spain from the lucrative British market will be low for the foreseeable future.  Meanwhile the vitally importaant Spanish tourist industry will suffer this year from a significant decrease in both internal and external holidaymakers.  Tax receipts will be down, welfare costs up and the miserable average Spanish salary will continue to have much the same purchasing power that it had ten years ago.

Spain is reeling against the ropes and, if the UK nineties recession can be used as a guide then this is a crisis likely to last for the medium term.  Do not forget that it took some nine years before UK property levels returned to their previous highs and for some five years values barely moved.  If the recession in Spain is no worse than the UK in the nineties - then Spain and its property market may be in for a rough ride until at least 2013.

As a property seller, are you therefore doomed?

No.  However, now you need every possible ‘edge’ to successfully sell your home.  No longer can you sit back and wait for some credulous, sun entranced buyer to be lead drooling to your property by an amateur local agent.  You are up against genuinely tough opposition comprising desperate buyers who are selling their properties at ‘distress’ prices.  This is a buyer’s market and the buyers know it.  Worse still, the buyer’s are firmly in the minority and have the pick of some 2 – 2 ½ million properties within Spain.

To sell, you now have to be more knowledgeable, more ruthless and more proactive than you have ever been.  You need to know every trick in the seller’s armoury and work every angle that exists.  You need to know how to prepare your property for sale, what marketing tools exist, how to deploy them effectively and how to maximise every opportunity so that you close a sale before your opposition.

In fact, you would be as amazed at what you can do as the average estate agent is astonished by the sheer idleness and passivity of most sellers – despite the astronomical sales commissions payable.  But then sellers often do not realise that selling is like a full time job and an activity that requires dedication, knowledge and energy.  It is not ‘rocket science’ but there are industry ‘secrets’ that, once known, will make you far more likely to sell than anyone else.

For example, you should never relinquish control over the marketing and sale of your property.  Unless there are very exceptional reasons, you should never sign a sole agency agreement nor in any way limit the number of estate agents you employ nor your own marketing possibilities.  Equally, always have your own Se Vende board and place the sale price on the sign.  Your sale price is no secret and may attract local or visiting buyers who never thought they could afford a property in your area.

Leaflet locally, use the internet extensively and know how to deal in person with potential buyers so that you understand intimately how to close a sale.  Incentivise agents that you use, never try to negotiate an agent’s commission down in a falling market and be prepared to pay well over the normal rates – even if they seem excessive.  You must also be fully conversant with the legalities of the selling process and know how to deal effectively with industry professionals from lawyers to surveyors and estate agents.   Lose the momentum on a sale through poor or slow communication and your only serious buyer for months may disappear for ever.

You must also try to be a step ahead of the market.  All too often sellers drop their prices after the market has fallen and continue to play ‘catch up’ as it drops further.  Make a ruthless decision about the lowest price you will accept and work the market to make sure that your price is always markedly lower than your competition.

Of course, you can always make the decision not to sell and to wait until the market stabalises.  This will happen - just as the volume of buyers from Northern Europe will return again in workable numbers.  The desire to move to Spain has not changed any more than the wonderful climate, excellent infrastructure, proximity to Northern Europe or the charming nature of the Spanish.

However, do not underestimate the seriousness of the long term problems inherent in the property market.  Just to clear the existing stock of properties for sale will take years.  So, if you want to sell your house then you have to adapt to the new, tough market conditions and be bold, decisive, knowledgeable and focussed.  If you are not - then you may get caught up in a vortex that will damage not just your finances but every aspect of your life and all attendant relationships.

Copyright Nick Snelling (www.nicholassnelling.com) author of three books on Spain including ‘How to Move Safely to Spain’ (www.movesafelytospain.com)