How to get an additional discount when purchasing a home in Spain | Part 1

The end of the tax incentives for the purchase of a property and the VAT increase from 4% to 10%, in 2013 has levied the acquisition of new properties and increased the difficulty of buying a dwelling.

However, in a Spanish saturated market with thousands of empty houses, the urgent need to sell by many owners (due to lack of liquidity or debts) makes it easier for the purchaser to negotiate if you cash is available or has direct access to funds.

First thing first.

While, the big banks offer loans for 100% on their stock of properties they have for sale, has resulted in a decrease of the value of properties. Therefore, if you choose to buy a home right now you can get a good discount on the price taking into account certain assumptions, which are detailed in this article.

I can't help you on the first two requirements above but I can certainly help you on the last point; How to obtain a good reduction on the final paid price.

Let me say first that it is more to do with research and subtleness than with "take it or leave it" approach.

You may obtain a reduction of between 5% and 30% in the value of a house, if you have cash; you have access to funding and you are a subtle negotiator.

Tips for lowering the price of a property.

Despite the drop in housing prices by more than 40% since the bubble burst in 2007, the real estate sector is not yet fully adjusted although it is on the point of doing so.

It is a well known fact that when properties are unsold for a long time, owners bring their prices down.

Although vendors have lowered the prices of their property, the unfavourable economic environment, job uncertainty and the drastic restrictions on mortgages has caused that buyers still have difficulty acquiring the necessary loans.

Here are some tips.

However, if you are lucky enough to be eligible for buying a home, there are some guidelines that can help get a better price. They are:

- Study the owner's urgency for selling.

Buying in a condo is almost always the biggest financial outlay that will make a consumer throughout his life, so it's worth to stay calm, get all the information possible about the property you are thinking of buying and find out if the existing owner is in debt to the owners community, this could be a good tip to show that the existing owner needs to sell quickly.

Thus, in many cases, the homeowner has more need to get rid of it than the buyer to acquire it but it is even more so if:

  • The property has been received through an inheritance.
  • The property is jointly owned by a couple who just have split up or divorced.

They are more in a hurry to sell and often offer the most competitive prices.

In these cases, purchase can be negotiated at a discount, if ready cash is available or there is direct access to funds.

Take a good time to review the stock belonging to banks, the largest property owners in Spain, normally these properties can be located at real estate portals or newspaper ads is where you may spot great discounts, look for labels such as "quick sale", "opportunity" or "price negotiable", next to a property sale poster a clear sign that the owner may be willing to lower the purchasing price.

- Analyze the property, its location and compare it with similar ones.

One thing you should take into consideration as a buyer is the cost per square meter in the area where you intend to purchase property. Rather than getting disorientated with bathrooms, bedrooms etc get a clear idea of cost per meter square in your area.

In this sense, the price of an apartment is determined largely by its location. Thus, if the demand for houses is lower in a given area, the difficulty in selling the property is higher, so that the owner will have to set a more attractive cost, and the buyer will be an interesting area in which to search for a house.

Furthermore, when interested in acquiring a particular property you intend to purchase a visit is a must, learn all the features and the area where it is located (if it is equipped with schools, clinics, shops, sports and leisure areas, etc) .

The real estate market has changed in recent years and those who sell now do it because they need it. This data provides the buyer with the unique position to obtain the best possible price for a property.

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As it is impossible to know in detail every case asked in this blog, all our replies are given in good faith but we strongly suggest that you obtain private advice from a solicitor /and /or  architect who will be able to study in depth your own particular case.

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