The number of purchases and sales of properties in Spain exceeded 400,000 in 2016. This trend is related to the volume of loans that were signed for such acquisitions, surpassing 280,000 mortgages granted on housing. Both indicators confirm the improving property market in Spain. However, every seller should know that the sale price of a home is not fixed, so it is important to take into account the different reasons that can make a property for sale lose value.

1. Antiquity

Spain has a stock of very old properties. This situation has led to new or newly built homes gaining value over the older ones. The preference for unused real estate, the deterioration of the materials or the need for the property to undergo future refurbishments are some of the effects the decision for buyers to choose older properties.

2. Maintenance and Reforms

The maintenance of the house is a factor that can cause a decrease in value.

Once the house has been seen and the buyer has connected with it emotionally, then the buyer will start thinking logically. That is why if the house is bigger, to achieve the sale price you want, instead of valueing it at it's "potential", it makes more sense for the vendor to refurbish the property themselves if it needs it then the asking price will be more reasonable.

That is, of course, if the house hasn't been valued at a lower price to take in to consideration the refurbishment cost. This method has a downside - it tends to attract investors and investors, by nature, think more logically and will be harder to negotiate a higher price with as they mostly have their profit margins in mind!

For lower end properties, depending on the condition of the property, it may make more sense to do a "soft refurbishment" or home staging - make it look homely.

3. Orientation

The orientation of a house determines its interior luminosity, as well as the views. Since Tenerife is such a diverse island in terms of micro climates and landscape, it isn't possible to have one rule to fit all. Especially since the buying market is also so diverse - whereas Canarians prefer the small windows to keep the heat out, Europeans appreciate having large windows to enjoy the views! So try and make the property brighter inside if light is limited using light coloured paint for the walls and keep clutter to a minimum.

4. Location

Everything that surrounds a dwelling affects its final value. This binomial, called in the real estate sector "principle of regression", consists of two houses with the same characteristics and qualities, one located in an area of ​​similar houses and the other in an area with lower quality housing. The second will be sold at a lower price than the second.

The location of a house is one of the aspects carrying greater weight for the customers when it comes to searching. Homes located in areas with consolidated services such as schools, shops, parks or means of transport can be worth up to 50% more than those built in poorly communicated spaces.

5. Stock

The market is governed by the law of supply and demand, which is why if an owner wants to sell his apartment in an area where there are many like his also for sale, there is greater pricing competition. This situation has been strengthened during the crisis, especially in the lower-middle class neighborhoods, where there has been a greater supply and housing has experienced greater price cuts, reaching 50%. On the contrary, prices in the upper-middle class have fallen less, because the sellers had a more relaxed economic situation, less exposure to indebtedness and lower unemployment, which led, to a lesser extent, to have to sell his property.

6. Price

Not assessing the price of the house accurately from day one can put the whole sale in jeapordy. If the price is right, the process of buying and selling will be much faster. Owners are sometimes adament they want to achieve the sale price and recover all the money they spent on the property when they bought - even if they had bought in the boom years! Your estate agent should not let you list the property at an unrealistic price as it simply won't be sold, buyers will be put off by huge price reductions when you come to realise this and it lowers motivation for the owners and the agents who will simply be inclined to sell more reasonably priced properties before they push yours.

Remember, if you are a non resident and you haven't been paying your non resident taxes, you will have to pay the 3% retention tax and you most probably won't be due any of it back. For the sake of maybe €200 a year, it is worth paying your non resident taxes!!!

When selling, as a guide, Residents can expect to pay 5% Agency commission plus IGIC, Plusvalia (depends on area and amount of time the property is owned - anything between 100 Euros to 8,000+ Euros) and capital gains if applicable (difference between purchase and selling costs minus purchase and sale expenses). Non residents pay an additional 3% Retention tax.

7. Timing and the Property Market

In the real estate sector, having a property sitting on a website not attracting any enquiries "is burned", so it will be very difficult to get any interest if there is no further marketing and re evaluation of its' price. This is due to sellers "clinging to an emotional price," not taking into account that the price "varies permanently and currently only sell the homes at market price." - A property is only worth the price a buyer is willing to pay for it.

If a home goes on sale above its value, it loses interest in the first three months of exposure to the public. So it ends up selling "below its estimated price". If the price exceeds the expectations of the buyer by more than 20%, they do not visit these properties, so there is no possibility of negotiation or sale, which leaves those properties out of the market completely.

8. Potential demand

The demand recognised by a real estate agent is the one that allows the owner to set an appropriate price for it. It's also important to recognise the strengths and weaknesses of the property to give an accurate and fair price.

9. Decor

The perception that the client gets of the house when they visit for the first time can determine their decisiont to buy or not. It is extremely important to have your property presentable for each viewing. Even for when the agent comes to take photos as first impressions mean EVERYTHING. Luckily for you, the estate agents at TIBC take great pride and care in their photos so that your property gets off on the right foot from the very start.

It's common sense to try to keep your property as neutral and as tidy as possible to appeal to a wider audience and to allow prospective buyers to easily visualize how they will decorate the home themselves. Also, stay away from sports memorabilia, religious themes and political items as this can also raise minor negative emotions within the buyer and causes them not to feel "suitable for that property". Buyers look at several properties, you do not want yours referred to as "the Manchester City supporters", for example! - not that there's anything wrong with Man City supporters ;)

10. Security

The lack of security in the area where the home is located is as negative as the lack of infrastructure or services. If the security of an area deteriorates, the price of real estate deteriorates. This decline is especially important if the area is addressed to families with children. The same if there is prostitution or other questionable businesses / activities that no parent likes to have where their children spend time.

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Article adapted from www.pisos.com