Thursday, June 09, 2005

Distress / Distressed Sales Costa del Sol

With the Property Market in Costa del Sol having boomed for almost 8 years non-stop now, the general consensus is that the Real Estate & Property Market in Spain and particularly in Costa del Sol (Marbella, Malaga, Golden Mile, Puerto Banus, Sotogrande, Casares etc...) has now reached an unavoidable lull.

Every Cloud has a silver lining, so whats the Good News here? Five Continent Group has been looking into the positives and how to turn this to our advantage as an Investor.

There seems to be a Buyers Market now with many properties being adjusted to more reasonable asking prices on the advice of banks, property valuers & Estate Agents in Costa del Sol.

Defaulted properties / Distressed Sales

Distressed sales can be an excellent way to make money...if you can get hold of the lists of defaulted properties, bank repossessions, distress sales, urgent owner sales and developer "close out" properties for sale in Spain. Unfortunately for the general public, these lists are like gold-dust! (Contact Five Continent Group for an updated selection.)

To avoid accusations of robbing anyone, Five Continent Realty is challenging the usual commissions charged by agents, which can be up to 10 or even 15% per cent in the Costa del Sol, by cutting its rate to 2.5 % and offering Virtual Tours to market the properties to buyers overseas.

Property Auctions

Many are now turning to Real Estate auctions to avoid lengthy waits to sell property on the Costa del Sol. Once a bid is accepted, the buyer puts down 10 per cent of the purchase price and has 28 days to sort out the remaining finance...very similar to the UK. This means vendors are accepting lower prices than before in an effort to liquidate their assets in a shorter time frame.

Buying property at auction can be a profitable business, especially in a falling market where you get a lot more distress sales from people needing to shift properties quickly. Make sure you are well informed, which can be difficult if you're only in the country for a few days. You will need to appoint a Spanish Property Lawyer to do due diligence and ensure you don't inherit any debts with your new property. It's also easy to get caught up in the heady and competitive atmosphere of an auction and end up paying far more than you planned. Make sure you visit the property and see a good selection of other properties in the area so you know you're not paying over the odds, set a price and stick to it, remembering your costs purchasing property in Spain will amount to approximately 11% of the Buying price.

Of course, another positive is you avoid the hard-sell tactics so many Real Estate companies in Costa del Sol & Costa Blanca employ, and being toured by sales agents!


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