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By Christopher Clover
 Download / view a PDF copy of this article as seen in our Marbella Property Magazine - click here
Selling one's property is an art. Although the property
market in Marbella remains very strong, it is quite competitive,
and many sellers without local experience should take expert guidance
as to how to go about it in a realistic manner.
Establishing the Asking Price
The first and most important thing to establish
is a "sales strategy" - a plan! The backbone of this strategy
is the asking price. In other words, if you ask too much for your
property, people will not even bother to view it and the result
is that you won't even reach the market place. Ask too little for
your property, and you are potentially giving away part of your
assets! The right asking price is the perhaps the most essential
ingredient in the art of selling real estate and is the result of
thorough market research. Don't settle for the figure you want to
hear, find out the true market value. What sales of comparable properties
have been accomplished, and at what price? And what other owners
with similar properties are asking? Is your property unique, which
will allow you to ask a higher price as it cannot easily be reproduced,
or are there many similar properties being offered?
The most experienced agents will of course be an
extremely valuable source of market information, and will help you
reach a conclusion as to a proper valuation and a correct asking
price for your property. However, it is important that you insist
that your agent share his market knowledge (and the market comparables)
with you. At the end of the day you must be convinced that you are
asking as much as you possibly can, without the property appearing
overpriced in the market place.
If, after having investigated the market as recommended
above, you are not satisfied with an asking price that the current
market would suggest, you can always put up the price, and hope
the value will eventually increase the towards your expectations.
But you must be prepared for a lot less interest from both agents
and clients, resulting in fewer showings of the property and a waiting
game. There is always the option to lower the asking price in order
to generate viewings.
Beware of agents who tell you what you want to hear:
too many agents purposely overvalue homes to get a listing and let
their sellers down over a period of time. Consequently, there are
too many overpriced properties on the market, sitting there with
no viewings whilst the seller has assumed that the asking price
was reasonable.
Providing market conditions are favourable, and
there is an abundance of clients looking for property similar to
yours, a successful sales strategy should result in at least two
or more showings per month of the property. Finding a buyer is,
in many respects purely a numbers game: the more people who view
the property, the more likelihood that one of them will fall in
love with it and put in an offer. Some buyers will negotiate with
a seller to the very end of his string, and others will be less
difficult. But it's easier to refuse a low offer if you are showing
your property frequently.
Build in a margin for negotiation
An asking price is not necessarily going to be the
sales price at the end of the day. It is considered suicide for
a seller to ask his last price, due to the "macho factor"
of most buyers who want to be perceived as winning in a negotiation
to purchase, regardless of the asking price. So, experience dictates
that the intelligent seller should build a reasonable margin for
negotiation into his asking price.
Get a good agent
Remember that Marbella is not a big city like London, Dublin or New York with a captive market within 50 miles of the centre, but a city of only 135,000 registered residents (about double that if we count the part-time residents) and a market spread out all over Europe and the rest of the World. This makes networking essential in any sales strategy to ensure proper market exposure. Good agents will network your property with other colleagues, both local and foreign, and will share their commission with their colleagues, sometimes up to 70% of it, resulting in better exposure and more viewings. When your agent networks your property correctly, he or she becomes more like the Sales Director of your property, giving out the lion's share of the commission to the agent who brings the eventual buyer.
Avoid quoting a "net"
price
One thing to avoid, if you intend to use agents
in offering your property, is listing on a net basis, that is, "I
want so much net to me and you agents add on your commission".
What will happen is that you will end up with a property on the
market at several different prices. Agent A will show your property
to Mr. Smith at €450,000. Mr. Smith then sees your property
announced by Agent B at €445,000. Confusion and mistrust sets
in. Then, Mr. Smith returns to your property to have a look at it
from the outside and happens to meet your neighbour, who tells him
your net asking price is €435,000! (But maybe you might accept
€425.000!) Result: before the prospective buyer has even thought
of making an offer, and with an outstanding obligation to pay a
commission to your agent who brought you the client in the first
place, your asking price has been reduced considerably and your
sales strategy shipwrecked.
If you list your property with your agents on a
net basis, you are only telling your agents "I'm not interested
in your commission", and obliging your agents to negotiate
against you and the buyer in order to protect an eventual fee. Wise
sellers will form a team with their agents and protect them, as
they expect to be protected and advised by their agents, and fix
one sole asking price for the property.
Also: beware of the agent who encourages you to
list with him on a net basis. He will only be looking after his
own interests and not necessarily yours.
Exclusivity or not?
Should you give an exclusive sales agreement to an agent? If you are an absentee owner of a property, or if you don't feel like playing a co-ordination role among various agents of varying ability, granting a sole agency can make your life a lot easier. You first have to meet an agent (if you don't already know one) with whom you can develop a good relationship of trust and confidence.
Your lawyer or close friends may be able to introduce you to someone of that caliber.
The motivation factor that you give to an agency by granting them the sole agency makes them much more responsible to you as a seller in a way that they are not with their non-exclusive listings. Obviously you must ensure that both you and your agent agree to a specific sales strategy that makes sense, and that he or she take a series of steps to market your property effectively, including advertising, producing a brochure and networking your property with other agents. It is especially important that they report to you regularly on sales activity. In other words, you have the right to demand a lot more service and effort from an agency with whom you have signed exclusivity.
A good agent, whether he or she works with you on an exclusive basis or not, can be extremely helpful in dealing with the sale in an objective and analytical manner, helping you to reach the right decisions at the end of the day.
Many sellers do prefer to spend the time and effort working with several agents and others will find that they prefer to try to sell their properties themselves, directly and without getting agents involved. Sellers should obviously choose the course of action with which they feel most comfortable.
Rates of Commission
Agents in a resort area such as Marbella will usually
ask between 5 and 7% commission, which they will really earn if
they are top negotiators. As indicated above, a good agent will
network your property, brochure it, advertise it, promote it in
Internet, show it frequently and communicate well with you. Agents
don't give keys out to clients, as in London, but they spend an
enormous time and energy in their efforts to find the right buyer
for a seller. At the end of the day, the commission can often be
negotiated along with the other variable factors in an eventual
sale (sales price, form of payment, number of agents eventually
involved, the skill of your agent in negotiating on your behalf,
etc.).
Essential tips for selling your home:
- Get your main agent to put up the "For Sale"
sign. This always results in enquiries.
- Facilitate viewings on as short a notice as possible. If you leave your keys with a neighbour who plays golf three times a week, you are losing a vital chance to show the property at the client's convenience. Bear in mind that the first properties that agents tend to show are the ones they have the keys to. Properties that need appointments set up will generally be shown less.
- Ensure that curtains and shutters are open and that lots of light floods the
property when it is shown.
- If there are any small repairs or repainting that would enhance the overall appeal of the property, it's well worth getting this work done now to eliminate any small “objection factors” from buyers. Although it goes without saying, a clean house is a desirable house, and many buyers are put off if the property is grubby or untidy. Make sure the place is spotless and you will instantly create a favourable impression. Selling a property, in this sense, is like selling a second hand car: fix the dent and polish it up, and you will always facilitate the sale, and maybe at a better after-negotiation price!
- If you intend to sell your property with some furniture, it is most important to make an inventory right at the beginning and give it to your agent. Many sales have been on the brink of falling through when a buyer thought, for instance, that the painting over the fireplace was included in the sales price and felt that the seller was “too mean” when he learned that it was not! Negative energy during a negotiation can be avoided by having a clear inventory in writing from the outset.
- If you are frequently travelling, it often makes sense to leave a power of attorney with your lawyer enabling him or her to sign a private contract on your written instructions. You can negotiate the details of the sale with your agent by telephone and e-mail and the power of attorney allows the “first step” towards the sale, the signing of a private contract, to take place without delay.
- Make sure that you are fully aware of your tax obligations when you put your property on the market. Meet with your lawyer and tax advisor, and find out the options open to you to ensure there are no surprises when you eventually enter into negotiations to sell your property.
- Remember that selling a property in a resort area is not usually a rapid procedure, even in good market conditions. Properties can stay on the market from three months to well over a year depending on the market, the location, the condition and general desirability of the property, the effectiveness of your sales strategy and, of course, the asking price.
- Let your agent form a team with you with respect to handling the negotiation in an eventual sale, checking points with your lawyer and tax advisor when necessary. This is your agent’s job and one of the reasons you pay the agency’s fee. Once this is accomplished, your lawyer should take the lead role (in coordination with your agent when necessary), draft the sales contract and supervise the eventual completion of the sale.
- Points to consider when a negotiation is taking place: Is the buyer expecting a counter offer from you or has he or she given you a one-and-only, take-it-or-leave-it offer? Do they have other properties in mind if they don't buy yours? Is their offer a fair one? Are all details included in the offer – price, target contract date, deposit, completion date, precise understanding of what is included in the sale in the way of fixtures, fittings and furniture, etc.? These items should be agreed upon at the outset and before lawyers are instructed. To avoid unpleasant surprises, under no circumstances should these items be negotiated "piecemeal".
- Don't allow yourself to be pressured by your agent or anyone else in making up your mind to accept an offer! A good agent will simply point out your options and support any conclusion that you reach. But once you make up your mind to proceed, and considering the “emotional factor” of many buyers of second or retirement homes where they can change their minds abruptly, make sure you move quickly (but surely) to close the deal.
In summary, selling a property can be as easy or as complicated as any task involving one's personal affairs. Competent, honest, professional help by agents, lawyers and tax advisors can go a long way to help you manage your sale objectively and easily.
Copyright: Christopher Clover 2007
Christopher Clover is an honor's graduate of the
University of Virginia (1969 and the founder, owner, and Managing
Director of Marbella's longest established real estate agency, PANORAMA.
e-mail: info@panorama.es
Other articles by the same author.
Marbella Property Market Report
An up-to-date report on how the worldwide economic crisis is affecting the property market in Spain's most important resort city.
Property Buyers Guide
The buyer's problem in finding the right property, negotiating its purchase and closing the sale is much more difficult than in one's own country.
Q & A buying a property in Spain
by Christopher Clover, Managing Director of Panorama, Marbella’s longest established Real Estate Agency.
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Panorama
Marbella's longest established Real Estate
Agency, with three offices on
the Marbella's Golden Mile, offering new and resale properties
of all types
in the Greater Marbella area. |
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