big agents having problems

[rowlandsbb]

Anyone thinking about buying overseas properties will be sorry to hear that one of the big agents is having problems
This is the press release today:

Parador Properties, which was once considered to be one of Europe’s top estate agents, has gone into voluntary administration.

The company had operations in Ireland, Spain, Sweden, the United Arab Emirates, and the UK, though most of the homes it sells are located in Spain.

The company took a client-centered approach to property sales by flying prospective purchasers to their desired destinations and offering advice about specific areas and communities. Simon Lambert and managing director Jack Hamilton founded Parador in 1998.

Homes Overseas received a statement from Quay West Communications, Parador’s PR company, moments ago. It says: “It is with regret that Parador Properties has announced that, due to the downturn in the overseas property market, it has gone into voluntary administration. This does not affect property purchases by any of its clients, as all contracts were made between the individual client and the builder; Parador Properties acted only as an introductory agent.”




There are still some professional agents selling in Spain. perhaps a much lower profile than Parador, but if you were thinking about buying for life style reasons in Spain this year then agents like me, providing a profesional service can help you

Good buys around and 2008 may well turn out to be a good year to buy!!

Not nice to hear of agents in trouble but life goes on....perhaps an end to the very cheap inspection trips and the ' business model' of the more you take over to Spain the more you sell!!

 

[Olly]

Anyone thinking about buying overseas properties will be sorry to hear that one of the big agents is having problems
This is the press release today:

Parador Properties, which was once considered to be one of Europe’s top estate agents, has gone into voluntary administration.

The company had operations in Ireland, Spain, Sweden, the United Arab Emirates, and the UK, though most of the homes it sells are located in Spain.

The company took a client-centered approach to property sales by flying prospective purchasers to their desired destinations and offering advice about specific areas and communities. Simon Lambert and managing director Jack Hamilton founded Parador in 1998.

Homes Overseas received a statement from Quay West Communications, Parador’s PR company, moments ago. It says: “It is with regret that Parador Properties has announced that, due to the downturn in the overseas property market, it has gone into voluntary administration. This does not affect property purchases by any of its clients, as all contracts were made between the individual client and the builder; Parador Properties acted only as an introductory agent.”




There are still some professional agents selling in Spain. perhaps a much lower profile than Parador, but if you were thinking about buying for life style reasons in Spain this year then agents like me, providing a profesional service can help you

Good buys around and 2008 may well turn out to be a good year to buy!!

Not nice to hear of agents in trouble but life goes on....perhaps an end to the very cheap inspection trips and the ' business model' of the more you take over to Spain the more you sell!!

Oh Dear Brian...what on earth has Parador Properties got to do with this Thread? Not a jot!!!

Things must be bad for you to if you feel the need to advertise yourself on threads outside Spain. Plus, I see you're an Authorised Agent for Polaris who have been publicly discounting like mad to try and stay in the game.

Yes, this is just the beginning the worst is yet to come for most agents. Fortunately for you Brian, like me, you have additional qualifications and training in real property to ensure hopefully more than mere survival. As for the Press Release, I doubt any serious professional missed this sad but predictable moment.

Best wishes to all and, please, back to Spain for you Brian...

Olly

 

[rowlandsbb]

Seems I made a mistake....can the post be moved to the right one?

As we are on DLW post it is also now a good time to buy development land in UK as most of the big developers seem to be writing down their land bank and looking for sales to reduce debt

Anyone with the cash to buy, I can source some good sites for them in NW UK ....may make up for slow sales in Spain and elsewhere!!!!!

 

[Investy]

The Directors of all these big companies were asleep at the wheel. Ordinary joes on forums such as housepricecrash predicted this credit crunch (they use that term) back in 2005, whilst property company directors said it couldn't happen.

Superior Worldwide have also gone.

Smart investors should be thinking about some property purchases soon, but no rush as this crash is still in its infancy.
With lending 50% down, it is certain we have a way to fall yet. Imagine a livestock auction with halve the cash to buy the same number of animals; prices would fall c50%. The same principle applies to property.

Lending will not recover for at least 12 months, possibly 3 years as there is no appetite to lend to anyone other than low risk clients with low loan to values. Do not make the mistake of thinking this will change soon, it wont.

 

[JonDavies]

The Directors of all these big companies were asleep at the wheel. Ordinary joes on forums such as housepricecrash predicted this credit crunch (they use that term) back in 2005, whilst property company directors said it couldn't happen.

Superior Worldwide have also gone.

Smart investors should be thinking about some property purchases soon, but no rush as this crash is still in its infancy.
With lending 50% down, it is certain we have a way to fall yet. Imagine a livestock auction with halve the cash to buy the same number of animals; prices would fall c50%. The same principle applies to property.

Lending will not recover for at least 12 months, possibly 3 years as there is no appetite to lend to anyone other than low risk clients with low loan to values. Do not make the mistake of thinking this will change soon, it wont.

Cannot agree more. The banks will be very cautious for a long time. We've a way to go before we hit bottom IMHO.

 

[Olly]

Cannot agree more. The banks will be very cautious for a long time. We've a way to go before we hit bottom IMHO.

Jon & Investy

Of course you're right...

However, I'm also deeply involved with large-scale funding and privvy to a variety of systems which the top 25 world banks employ with these big funds.

Apparently, the most favoured is about to be piloted in Europe - don't know where - from early next year. The system will provide massive security for the banks while offering their customers a far more stable route to follow.

Knowing how well this works in structured finance transactions there's a good chance it will succeed. Probably the biggest losers however will be the buy-2-let landlords of at least the future. Or, any existing who need to refinance from 2010 onwards.

Am looking into creating a complimentary service in advance of the banks / building societies, hence no details for the moment.

One thing is for sure, if they proceed, it'll be the largest shake-up in the mortgage system ever...and about time too. Hopefully most will applaud this creative but intellligent advance.

Keep seeking good property investments everyone...

Olly
PS: As a result, it will slow the property markets of the future. Everyone will need a greater personal stake in the transaction.

 

[OPH]

A number of the bigger agents of gone...........lets think of them all.....not just parador and superior. Viva Estates have shut there doors, Interealty were one of the first to go. Ocean Estates followed and it is reported that Livingstone and ADH are also in trouble.

The main reason............not necessarily the supposed credit crunch (which is just a marketing ploy from the banks)........these agents all cleaned up in the good times in 2001-2004, but unfortunately were too short sighted to move with times and thought their huge marketing campaigns would keep them going. Most continued doing every exhibition under the sun through 2005-2007, spending rediculous amounts of money without the returns and focussed mainly on the UK market. Really think they deserved to close!!!

The successful agents that are still functioning today and doing ok even in a resession market, have looked well beyond exhibitions and glossy magazines, expanded their focus and those working in Spain have learnt spanish and focussed on the local market!.......these guys deserve to still be here and my predicition is that these agents will ride the rough times and will come out the other side laughing at the "big boys" that all fell when the going got just a bit too tough!!

 

[rowlandsbb]

OPH.......a good summary of the current position!

The demand for buying on the Costas in Spain is very large and just at the moment the ' effective demand' is sluggish because of the current economic situation in northern EU

Medium to long term the market will move again, product demand may be a touch different [ always change after a down turn....perhaps a more 'El Campo' or 'el medio ambiente' product demand ]

And buyers will look to the profesional agents

*For example we have a ' el medio ambiente' development which is fully legal, 30 mins from Almeria, infrastructure now underway and first units started...show house ready very soon
2 bed apartments from 99.900 € and a 2 bed semi from 137.500 €

 

[dave99]

EasyAgent - low cost agent - here I come

EasyAgent - low cost agent - here I come

Sounds like a good time to jump in and clean up !!!!
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[Randall]

Hi Dave99

I would not jump in too quick mate.

The development he is flogging is a HUMA one. People purchased through agents in 2004 and never got their properties built on Almanzora Country Club.

People are in the process of taking Huma to court due to not having any bank guarantees and Huma refusing to refund people.

The complex he is flogging is Oasis Thabernax Country Club which also does not have a 100% build licence yet.

This agents track record is one of a purchaser on ACC who had no bg himself and had to transfer to OTCC to safe guard his investment.

Parador who are also rogues were hand in hand with Huma so it will be interesting to see if this development ever gets finished now that they are in trouble.

 

[dave99]

Hi Dave99

I would not jump in too quick mate.

The development he is flogging is a HUMA one. People purchased through agents in 2004 and never got their properties built on Almanzora Country Club.

People are in the process of taking Huma to court due to not having any bank guarantees and Huma refusing to refund people.

The complex he is flogging is Oasis Thabernax Country Club which also does not have a 100% build licence yet.

This agents track record is one of a purchaser on ACC who had no bg himself and had to transfer to OTCC to safe guard his investment.

Parador who are also rogues were hand in hand with Huma so it will be interesting to see if this development ever gets finished now that they are in trouble.

Hi

Not interested in buying anything - I'm just getting going with low cost selling as an agent in Egypt on the Red Sea - no real costs to drag me under.
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[Investy]

As I keep saying - investors should only buy off plan if zero (or minimal) funds required until full handover of fully built property to include all promised infrastructure.

Better still, only buy fully built property and forget offplan all together.

 

[dave99]

Interesting ideas

As I keep saying - investors should only buy off plan if zero (or minimal) funds required until full handover of fully built property to include all promised infrastructure.

Better still, only buy fully built property and forget offplan all together.

If everyone followed your advice there would be nothing for anyone to buy.

Every developments needs some cash flow to keep going.

If any developer has so much money to waste he may as well put it in th bank and settle for 7% profit with no risk or employment for any workers.
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This view also will deny potential risk takers from gaining substantial profit from big discounts during building stage of a development.

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[Investy]

the supposed credit crunch (which is just a marketing ploy from the banksh!!

Lending is 50% down in the UK.

Only one specialist lender is still actively lending in the UK (GE Money, with rates typically around 9%).
All the dozens of others have either closed or are just managing thier existing mortgage customers. Specialist lenders took about 35% of the market 1 year ago.
Now millions of people cannot access the mortgage market as a result.

Buy to let lending has declined by 85% and rates are around 7% which means the rent will usually only cover the debt on loan to values under 75% now.

Americas 2 largest lenders are on the brink (Fannimay & that other one with an equally odd name)

The crunch is real - 4000 mortgage brokers have left the CML register in the last 12 months and that figure is expected to treble. Industry stats released last week show 4 out 5 mortgages are arranged by brokers, so do not think this statistic is unimportant.

 

[Investy]

If everyone followed your advice there would be nothing for anyone to buy.

Every developments needs some cash flow to keep going.

If any developer has so much money to waste he may as well put it in th bank and settle for 7% profit with no risk or employment for any workers.
.
This view also will deny potential risk takers from gaining substantial profit from big discounts during building stage of a development.

.
.

Everyone wont follow my advice, but smart investors should not get involved with funding developers little money making adventures that may or may not deliver.

Fadesa of Spain for example made all sorts of promises when they sought eagre buyers, but now the products have been delived in a terrible state with showers that go cold if you turn on a kitchen tap.
This is the problem with offplan, you just never know what will be delivered.
Fadesa are struggling financially which is a real example of why one should not part with any cash until the product is delivered. The Banks could pull the plug on them any moment.

One method that to an extent aliviates the going bust worry, is where developers sign over the land plot when the deposit is made. Ive seen this done in the Bahammas and Carribean. At least that way the investor owns something if the developer goes bust.

 

[Olly]

Everyone wont follow my advice, but smart investors should not get involved with funding developers little money making adventures that may or may not deliver.

Fadesa of Spain for example made all sorts of promises when they sought eagre buyers, but now the products have been delived in a terrible state with showers that go cold if you turn on a kitchen tap.
This is the problem with offplan, you just never know what will be delivered.
Fadesa are struggling financially which is a real example of why one should not part with any cash until the product is delivered. The Banks could pull the plug on them any moment.

One method that to an extent aliviates the going bust worry, is where developers sign over the land plot when the deposit is made. Ive seen this done in the Bahammas and Carribean. At least that way the investor owns something if the developer goes bust.

Hi Investy...well said!!!

Pretty much agree with everything you've presented in your last two comments in opposition to our Red Sea salesman.

Another time to part with ones hard-earned cash is when there is a full money-back guarantee provided through either a Title Co or Lawyer warranty through Escrow Account. Increasingly the case by law in many countries. Your funds remain yours while held in Escrow and, only released post walk-through (satisfactorily concluded) by the client or their professional assessor.

As a 'Licensed' international professional obviously this is the only way I operate but, also, as commercial finance broker I arrange funds for developers. Nowadays, all they need is 1.5% of the total cost of land purchase & construction cost to fund their project. Let's put this in persepctive. Yes, that's just 375,000 Euros to obtain 100% funding for projects requiring say, 25M Euros at current rates of 5.5% interest.

So, there's absolutely no reason for a developer to seek to 'use' a buyers money unless their credentials don't match standard banking requirements. (Not a good sign if they don't!!!)

Of course the buyer should expect to 'park' funds into a 'safe' Escrow Account while the homesite is under construction and to lose a proportiion of their money if they withdraw for reasons outside the buyer/developer agreement. Since these clauses are usually very well-defined, the buyer should understand their full liabilities and either accept or not.

Next time any slick salesman is trying to convince a buyer to part with their funds and not offer for this to be held in a secure Escrow Account, tell 'em to take a hike. Keep your funds to developers who automatically offer this security with their sale.

Good luck with your investing wherever it might be...

Olly

 

[Olly]

If everyone followed your advice there would be nothing for anyone to buy.

Every developments needs some cash flow to keep going.

If any developer has so much money to waste he may as well put it in th bank and settle for 7% profit with no risk or employment for any workers.
.
This view also will deny potential risk takers from gaining substantial profit from big discounts during building stage of a development.

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Dear Red Sea Dave

Surely as a developer or agent you can afford to include your full name and address on the website? Afterall, if you're selling to, or are based in the uk, it's a legal requirement I believe. Feel certain you'll wish to also remain within the law?!!

Olly

 

[Markp]

It is not that you dont give good advice sometimes, but other times it is, well i fell you forget which Blog you are on

I wholeheartly agree that there are a lot of bad deals out there that give the cutomer limited protection and have limited obligations to the developer, and there are inherant risks in buying off plan. Any developer selling to the UK will be fully aware of all the insurances and protection methods for clients and will accept them as part of the deal if he is a genuine developer. If they dont and the contract is not balanced, then your head should tell you to walk away. Although even then not everyone is a crook and that is what should be remembered!! If you are unhappy with the contract, but like the development ask to speak with the developer directly, or via your lawyer and see what happen, if they value your custom and listen to your requests then....

Anway to your points:


Only buy deals where you pay nothing until all work is completed???

So, reserve a property at todays prices, without putting money down and only pay when the builder, at his own expense and no security builds a property for you and completes it?
Show me where these deals are and i will buy ten.



or 'Dont by off plan property???

A good developer, that offers total protection to a client and builds out in two years will be selling at least 50% more for the same property when it has been built and when it is off plan. Full stop

what so, dont take advantage of the better prices and potential capital gains and developers offer?

Your strap line says something like " i have invested in years and made loads of money"

Obviously very very slowly, if you follow your own advice.

As I keep saying - investors should only buy off plan if zero (or minimal) funds required until full handover of fully built property to include all promised infrastructure.

Better still, only buy fully built property and forget offplan all together.

 

[Lysos]

Investy,

As you probably know Fadesa have gone under, leaving half finished projects such as Costa Esuri, planned to have over 2,000 properties in all. Obviously, the promised facilities won't materialise and for those poor unfortunates who have already bought, what chance of resale ?.

 

[rowlandsbb]

Fadesa has gone into administration but that does not mean that they will not finish current developments
Any buyers should of courses take Spanish legal advice to protect their interests straight away and establish the exact position of the development on which they have bought

This is not the first in Spain or other EU countries in the current economic climate and that applies to UK also

But also it does not mean that all developers in EU including Spain & UK will go into administration and provided you do your research, get good advice and a bank guarantee for your money there is no reason why anyone should not buy off plan, if they have decided for life style reasons that time is too short to wait to improve their quality of life or they just need a holiday home in the sun

Whatever anyone may say about Spain , it is easy to get to, lots sun and good food and medium to long term for life style buyers it should turn out to be a good investment

The predictions are for the market to be slow for 18 months or so and start to pick up again circa 2010....next boom circa 10 years....bit like UK.....although if the price of oil keeps falling you never know!!!.......this economic slow down may only be short lived