There has recently been an increase in potential buyers searching for properties on the Costa del Sol that fall into the category of distressed sales or properties that have been heavily reduced.

As is to be expected, many of the cash buyers around or those that can secure funding from lenders, are unwilling to part with their hard earn funds on what they see as property prices that were fueled by the recently-ended credit boom.

This of course is quite understandable, as years of hard work and savings should not be casually spent. So what are you, the buyer, looking for? Distressed sales? Bargain properties? Properties with 20%/30%/40% off? All of these can be found on the Costa del Sol.

First let us look at reductions/discounts

Any property that has been on the market for a minimum of 6 months is going to be reduced from the original asking price. Let’s be honest, why would you sell your property at the moment unless you need/wanted to sell? So the property will start of at X and the price will drop until either sold or removed from the market. Many people are now talking about properties that have been reduced by X amount, and even being advertised as such!

Here are 2 examples that are common.

A 2 bedroom, 2 bathroom apartment reduced from 300,000 to 200,000 Euros is a 33.33% reduction/discount. But is the value there or does it still need to drop by another 50,000 Euros due to the quality of the build, local infrastructure, etc…

Or

A Costa del Sol villa previously valued at 1,000,000 now selling for 600,000 Euros! Valued by whom? Many valuations were until recently…optimistic to say the least. In Spain a property should always value between 20/30% more than the agreed selling price as previously a bank was only willing to give up to 80% mortgage of the valuation. So saying a property is 30% less than valuation is misleading in regard to ’good’ reductions.

Distressed sales on the Costa del Sol

This is an interesting one. This seems to be an increasingly popular term at the moment, which is understandable as people are losing jobs, unable to pay mortgages or other debts owed to lenders. But this is also to a degree a futile search on the internet. In most cases the vendor will inform an agent of his or her necessity to sell and will recommend a price. The agent will then contact as many potential buyers as possible that would be interested in the property. And if they do not currently have a client for the property, they will inform other agencies who might potentially have buyers. These properties will rarely be on a website for long due to the urgent need to sell. And if it is on the website for any extended length of time, it cannot be that distressed.

Now let’s talk about bargains

What makes one property a bargain over another? This is harder to define as it is quite subjective. Some people are willing to spend more to be in certain areas/urbanisations/blocks than others. This can be for many reasons, in fact far too many to state here. But the word is bandied around on quite a few websites/agencies. For me it is quite simple, it is a bargain if the property meets the criteria you are looking for at the lowest price available or at a price you are willing to pay. And even if it is not at that current price, well make a lower offer!

So in conclusion

You need to tell your property agent exactly what you are looking for. Are you looking at a buy to let, if so with what sort of rental yield of you looking for? If it is for a holiday home, does it have the west facing terrace to enjoy the winter sun? Or if a home, what sort of surrounding facilities/amenities do you, or will you, need?

If you are serious about buying on the Costa del Sol, now is the time to get yourself a real bargain property.