An Irishman is behind one of the first ever property auctions on the Costa del Sol. Kate McMorrow reports
An Austrian princess's mansion and an apartment owned by restaurateur John Howard are among properties going under the hammer in Puerto Banus's first ever property auction next June.
This is according to Monaghan entrepreneur Barry McEntee of Costa del Sol agency First Choice Properties, who moved there three years ago when his company, Monaghan Poultry Products, closed down.
Property auctions are an unusual concept in Spain, except in a few rare sales. Why have established Marbella agencies, such as Viva Estates, not gone down this avenue?
"The market was so buoyant three or four years ago, nobody thought about it. With sales of apartments and villas in the Marbella area slowing down, drastic action is now necessary to clear the backlog," says McEntee. The first auction takes place on June 3rd in the Andalusian Plaza hotel in Puerto Banus. Locals do not trust auctions because of their immediacy and the fact that deposits have to be paid on the spot, says Sol Royo Erausquin of Irish-based Tom McGrath Solicitors. It will, however, appeal to Irish buyers who know what to expect, she adds.
The boom times, it seems, are fading in this part of Spain, where there are probably more Irish owners per square mile than in Manhattan. There has been a significant move westwards to the coastal strip from San Pedro to Sotogrande, the new "in" place where some well-heeled Irish families own second homes.
Rumours that Ryanair is planning to fly into Gibraltar may cause properties in this location to shoot up in value. Price-conscious new entrants to the Spanish property scene are targeting Alicante and the south-east coast, where property is considerably cheaper and the sun still shines.
Some vendors will reinvest in the Estepona area where there is more happening. Others are moving to the Canary Islands, where year-round sunshine is almost guaranteed.
"Hopefully, the auctions will address the imbalance caused by the large amount of re-sales on the market. It will clear the decks out," says McEntee, who blames the proliferation of new construction on the declining fortunes of the resale property market in this area.
"It's just building, building, building on the Costa Del Sol. People are buying off plans and getting in earlier. That's not good for resales."
About 40 properties are expected to be on the books by June, with UK auctioneering firm Main & Main conducting the bidding. Properties on the books so far can be viewed on at www.direct-auctions.com.
Reserves are set at a realistic level to encourage sales, with an average of €30,000 knocked off the current asking price. Be warned, however, those interested in snapping up a bargain should have their homework done before bidding begins. Once the gavel drops, the deal is binding for the buyer and seller. Ten per cent is expected on signing the contract at the auction, the remainder on completion within 28 days.
Buyers will be offered a choice of two English-speaking legal firms, but can hire their own. It is always wise to seek independent legal advice prior to auction. Dublin company Tom McGrath Solicitors advise buyers to be aware of any charges attached to the property for sale by asking for a copy of the Nota Simple.
Get as much information as possible in writing on the property, such as contents and management and community fees, which can be high in an exclusive development. Conditions of purchase should be scrutinised before signing any contract.
A survey is important, although not customary with Spanish apartment purchases. Factor in about 10 per cent on top of the deposit for legal and tax charges. There is also a buyer's fee of €245 for administration, payable to the property agency.
Prospective buyers will need to travel out to Spain a few days before the auction, to view properties, talk to solicitors and arrange surveys. On June 3rd, those familiar words, "going, going, gone" could mean someone has found a bargain on the Costa del Sol.
