The price of homes in Spain has lowered around 30% (average) since the housing bubble burst.  They will continue to lower in 2012 and it would be a good idea to follow certain guidelines to get the best possible price if you are a serious buyer.

These are some pieces of advice that will be useful in buying a “bargain” directly from a particular seller. We recommend an agent but you can certainly find YOUR BARGAIN directly from a seller in this “climate”. In any case, always get legal advice and do not go alone in this venture.

Arm yourself with patience.  Say goodbye to being in a hurry

Buying a home involves the most important expenditure of our lives.  Because of this, asking for all of the possible information, comparing, running numbers, and not being in a hurry to make the final decision are indispensable steps.  It is a must to study up on the prices of similar properties in the zone where your desired home is located, financing, costs associated with the sale, and all of the characteristics that influence your decision.

Paying the property in cash

Having money available in cash doesn’t just contribute to benefits in the moment of negotiating between individuals.  When comparing the price of a flat, counting on savings to tackle the sale or finding yourself needing to finance it (provided that the bank always agrees) will make a huge difference in the final cost.  The differential with the EURIBOR that the banks apply to establish the type of variable interest sets that difference in the form of interests.

The cheap mortgages of the past disappeared with the crisis.  In 2011, the reduction of prices of new properties, that the Society of Valuation cited at 4% annually, was already absorbed by the noted recovery in the costs of financing by almost one percentage point.  Because of this, one should crunch numbers and think about the long term.

Be alert with opportunities to buy a flat

The price of properties suffers important drops under certain conditions.  Locating yourself in a depressed zone or one hit by the economic ups and downs (high unemployment rates, shrinking consumption…) will reduce your price, because the demand for the flat will be less and the difficulties in selling it will increase.

If the property is in need of repairs, the seller will want to look for a quick sale, since the deterioration will increase and its value will diminish progressively, and with these come the possibilities of reducing the initial asking price.  Another option is renting with the option to buy. BE CAREFUL WITH SUB-PRIMES!!!

Revisions to price lowering

If you are pursuing various properties, you can find interesting discounts for yourself in the initial price when the homes stay around for a long time without being sold.  And if the sellers aren’t able to firm up their sale, they will agree to lower their price every once in a while.  Making a reasonable lower offer, but by a specific and firm deadline, will facilitate an interesting discount.

Daniel Talavera www.thespanishbrick.com