Property in Spain: How and when can you negotiate the price?

The average square metre price of property in Spain stood at €1,996/m2 in July 2023, which means that for an average 100 sqm two-bedroom apartment, property hunters can expect to pay around €200,000. That’s 7.2 percent more than in July 2022. 

This upward trend in Spain’s real estate market is no different from that seen across the globe, but it does mean that it’s harder to bag a bargain in España as many foreigners used to find. 

However, it’s still very much possible to get a price reduction. Fifty-five percent of property hunters in Spain do attempt to negotiate.

According to property portal Fotocasa, two in three sellers agree to drop the asking price by between 7 and 10 percent. 

This applies to second-hand homes, as with new builds the price tends to always be fixed.

When is it a good time to negotiate the price of a Spanish property?

“Although negotiation plays a relevant role, the closing price is really going to be determined by the demand for the particular house,” argues Francisco Sierra, general manager for the Spain and Portugal branch of property company Casavo.

Fewer people interested in buying a home in general due to an unideal property and financing climate tends to mean fewer people interested in a particular property.

So how do things stand in terms of negotiating powers for property buyers in Spain in 2023?

Price rises have slowed down due to lower demand caused by higher mortgage rates, with the rate of signed hipotecas (mortgages) dropping consistently throughout 2023 and by 18 percent in April to just 27,503, the lowest monthly sum since December 2020. 

That increases bargaining power for buyers as sellers don’t have as many people interested, although Spanish real estate isn’t as overvalued as the EU average, 9.8 percent compared to the eurozone average of 16.7 percent. 

All in all, Spanish property experts see that the negotiating power of buyers and sellers is evening out over the course of 2023, with property hunters gaining more of the upper hand.

Is the property bubble going to burst in 2023 as it did in 2008? Most see it as highly unlikely, but buying at a time of lower demand always gives more bargaining strength to the seller.

 

Tips on how to negotiate the price of a Spanish property

Study the market: Knowledge is king in this sense, and analysing the state of the overall real estate market and comparing the price of a particular property to that of similar homes in the same neighbourhood or street can give you a clearer picture of what you should be paying. At worst, the seller will have to justify why they are selling it above market value.

Location, location, location: According to property website Idealista, the seller tends to have the upper hand in cities whereas in rural areas or in dormitory towns where there’s less demand it’s the buyer who can haggle down prices more.

Build a rapport with the seller: If you can strike a chord with the person buying the property, they’re more likely to budge. Most property experts conclude that a property sale is a lot more emotional than one may expect, so for example instead of saying “the flat is old and I’m going to refurbish it”, say “I like the flat, but I can only pay X amount because I plan to refurbish it”.

Find out as much as possible about the seller: Try to ascertain their reasons for selling as this can give you useful information with which to negotiate, particularly if they have reasons to want to sell quickly.

Don’t make unreasonable offers: Don’t expect the seller to want to negotiate if you suggest a price well below the price of properties in the area. Nine percent is the average price drop negotiated in Spain. But keep in mind that some sellers do vastly overcharge. In cities such as Granada or Vitoria, most sales were closed at 21 and 22 percent below the initial asking price.

Use an expert to check the property for flaws: Enlisting the help of an architect to pick up on anything from structural problems, leaks or any other issue you may not notice so easily will strengthen your side on the negotiating table if there are flaws. You should also make sure you get a nota simple to check if the seller has any unpaid debts or legal charges regarding the property. 

Try to close the deal fast: You should aim to give the seller a deadline of no more than a few days for accepting your counteroffer, thus preventing other potential buyers from turning up. According to Fotocasa, six of every ten reduced price transactions are finalised within a month.