Look away from the big-name coastal towns
Popular towns or villages are often points of reference where buyers start their search, but they soon realise that if they are prepared to compromise on location – even adding just a 10-minute drive – then their budget can generally go further.
This can mean looking inland – for example from the popular Costa Blanca town of Quesada, which comes with a premium, inland to Algorfa. Or looking outside of Alicante to Gran Alacant, where access to the city and airport is superb. It might not mean moving inland – just further along the coast from an airport by a 10 or 15-minute drive, for example Casares/Manilva instead of Estepona on the western Costa del Sol, where your money might go 15–30% further.
Be prepared to renovate
Not everyone wants a fixer-upper, but if, like Jasmine Harman, you are prepared to do a bit of work then you won’t be competing against the bulk of buyers today who only want turnkey. There are often Spanish homes to be found that have lain empty due to probate or a change of circumstances.
In areas where there are big expat networks and Facebook groups, it can be easy to get recommendations for tradespeople if this is your worry. Just ensure you get your lawyer to check that any changes you wish to make are legal, plus seek any structural advice from a surveyor, and make sure you budget for the works – but why not add value to a property?
Make a cheeky offer (negotiate)
The Spanish expect you to negotiate and, as viewers of A Place in the Sun will often see, a cheeky offer can save you thousands. It can help if you have a lawyer or buying agent to advise you, but even if you don’t, you will be in a much better position to negotiate if you know how long the property has been on the market and how urgently the owner needs to sell.
There are often overseas owners who need to return to their home country through death or ill health and need a swift sale without too much hassle. Also consider whether there are times of the year that might be in your favour for tax or seasonal market reasons.
Go early – off plan
How soon do you need to use your Spanish home? If you are planning long term, such as semi-retirement, then buying new-build – especially at the off-plan stage – can make sense. By buying early in the build process, you will get discounts of 10–20% as developers need funding for the further phases. You will be rewarded for investing at a stage when others are less confident about buying into something they cannot touch, feel – or visualise.
Further advantages of buying off-plan include being able to pick your unit within the scheme and also the finishes you prefer – tiles, fittings etc. Just make sure you have done due diligence on the developer and that you use a currency broker for phased payments (see next).
Make currency exchange work in your favour
When you have a budget to buy abroad you will likely have your hard-earned savings in pounds, so don’t overlook the fact that exchange rate fluctuations might make a big difference to how much you’ll pay when you find your dream property a few months later.
A movement of just 1–2 cents in the exchange rate could cost you thousands. If you’re buying a €250,000 home, and the rate moves from €1.17/£1 to €1.13/£1, the cost jumps from £213,675 to £221,238. That’s over £7,500 more – just because of the exchange rate.
Ask A Place in the Sun Currency how a forward contract can lock you into the exchange rate at the time you put your deposit down, so you’ll know exactly how much you will pay in sterling when you need to transfer funds for completion, whatever the pound-to-euro rate is. This is especially relevant if you are buying off plan, making stage payments over 18 months or even more.
You will also save more money when transferring your funds abroad using a specialist service, compared to a typical high street bank on any given day – up to 3.5% in some cases – another £7,000 in the example above.
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