Costa Blanca Estate Agents Closing Down - Spanish Real Estate forum - Spanish property

Homefinder · 09-05-2008, 07:39 PM

Dear Colin S

You have been kind enough to write about current real estate problems so perhaps you can answer this one. In a recent post you said -

Quote:

This is obviously not a good situation for smaller estate agencies but Hamiltons has the experience and divergence to take advantage of the situation.

Hamiltons is a fairly big organisation, possibly the largest local estate agency. It is no secret that they have closed some offices recently so perhaps a short explanation, about how they intend to cope with the current crisis, would reassure a lot of selling clients.

I guess you would want to think carefully about this because all the members of the SREF will see it as well. Have a nice weekend!

Homefinder

Richie · 09-07-2008, 11:02 AM

I think all of the bigger estate agencies are having to think about the present and how best to ride out the storm.

Here on the Costa Blanca south many of the bigger companies have been forced to close offices, simply assessing which ones are performing better to help cut costs - other smaller companies have simply shut up shop and called it a day instead of throwing good money at a failing business.

Many are still operating either from home or partnering other estate agents.

I think everyone knows (obviously!!!) that times are tough and all companies (not just in the real estate industry) are looking at all avenues to save as much money as possible.

But even with all the talk of recession, credit crunch, unemployment, etc - people are still coming over - which I find really surprising!

Homefinder · 09-07-2008, 02:37 PM

Quote:

But even with all the talk of recession, credit crunch, unemployment, etc - people are still coming over - which I find really surprising!

I am not surprised at all. I have found that, no matter how hard it gets, most would spent there last pennies on a holiday if only to get away from the UK weather.

Yesterday they whole of the North of England was covered in fog and the airlines were bussing passengers down to Manchester and East Midlands.

There is always a glimmer of light at the end of the tunnel - From someone who has already lived through TWO recessions.

At any given time there are X-million northern European families (mainly British), of widely varying age and economic groups, who plan to sell their property in order to improve the remainder of their lives by adquiring a property in the sun (and Spain has always been their first choice).

Then along comes a world economic recession, property values fall and the X-million people have to shelve their plans, which has an alarming effect on Spanish real estate values as well. One must bear in mind that there are more than enough dwellings in Spain already (and a lot more besides) for the population and the Spanish construction industry is driven by sales from outside the country.

Eventually the recession eases, economies start to pick up and property prices start to rise but this does not happen in Spain at first because they have very little to export other than tourism and construction.

Meanwhile that X-million has increased to 4 or 5X-million, they finally get their chance to sell, property prices in Spain are still depressed and

. . . Alleluia, away we go again!

Homefinder

Colin S · 09-08-2008, 06:31 PM

Sorry guys and gals but I've been a bit snowed under closing down offices, I'll try to answer in full tomorrow

Colin S · 09-13-2008, 06:22 PM

I promised to explain how we in tend to beat the current real estate crisis.

Facts have to be faced and better sooner better than later. Right now we have a credit crunch and virtual wide-wide recession, which have had a catastrophic effect on Spanish real estate and property values.
We had hoped, at the beginning, that the recession in Spain would be short-lived. However it has become obvious now that the US sub-prime crisis will have a long-term knock-on effect around the world and we must plan accordingly.

Disregarding national and multi-national estate agents, like Ocean Estates, Don Piso, Rushcliffe International etc (who have already closed all or most local offices), Hamiltons of London is the largest retail estate agent in Costa Blanca North and cover the whole costal area from Benidorm to Gandia (Costa de Azahar), including many inland towns as well such as the Jalon Valley.

Sales during 2008 have been fairly steady at just around 25% of the peak year (2006) and about the same as pre-boom years (before 2004).
Curiously the number of enquiries has been as high as ever.
Obviously, attempting to continue with sales reduced to a quarter is an invitation to disaster and we are forced to make changes but the principal considerations were how to reduce expenses and serve our clients as before.
By “clients” I mean both buyers and sellers.

The only logical solution was to close half of the offices and reduce the staff accordingly, leaving the remaining offices to cover a larger area.
Whilst considering which offices to close we took the overall cost of running each into consideration and the Denia office is a good example of this, which was closed 4 months ago.
Denia has always attracted lots of interest but the cost of maintaining an office in the city centre made it the most expensive of all.
The cost of the lease was quite high, especially for the size and type of unit we were renting. However, as the Denia office figures in our overall plan, it meant closing the current one and finding another commercial unit in the right location at the right price.
Being in the industry, we can see what is happening to property values, both residential and commercial. Many businesses will fail during this recession; there will be more and more commercial units coming back on to the market and driving down the average price.
We therefore decided to wait until after Christmas before opening it again, as we feel that prices for commercial units would have gone down enough to warrant the investment of opening another office in the city centre.
We may have the same situation elsewhere and it is quite likely that we must spend the next few years closing some offices and opening others.

Just 2 years ago we had eight offices: Gandia, Pego, Denia, Javea, Moraira, Gata, Calpe and Albir plus our headquarters in Jalon.
We have now consolidated the network as follows –

Denia (covering Gandia/Oliva/Denia/Pego/Javea). Scheduled to re-open early 2009.
Moraira (covering Javea/Moraira/Benissa/Benitachell/Calpe)
Albir (Covering Benissa/Calpe/Altea and Albir)
Jalon – our headquarters (covering the Jalon Valley - Jalon, Alkalali, Lliber etc.) plus Denia/Pego/Javea on a temporary basis.

This arrangement provides an office within 20 minutes drive of any location, so that two offices can cover a location where we no longer have an office.
Hopefully this will allow us to cut costs until the market improves and we can then re-open when we feel the time is right.

ColinS
Hamiltons of London - Jalon
Manager

Homefinder · 09-15-2008, 07:14 PM

Quote:

Disregarding national and multi-national estate agents, like Ocean Estates, Don Piso, Rushcliffe International etc (who have already closed all or most local offices), Hamiltons of London is the largest retail estate agent in Costa Blanca North and cover the whole costal area from Benidorm to Gandia (Costa de Azahar), including many inland towns as well such as the Jalon Valley.

That's a very well but Hamiltons has developed it's reputation over the years as a "high street" estate agent, because of the numerous offices, and local advertising, with property listings for every town.

You are closing offices and obviously reducing the covereage of your local advertising. Are you not worried that you could lose that "high street" name as well?

Homefinder

Colin S · 09-16-2008, 07:31 PM

Hi again Homefinder

I understand your question but in these desperate times we have to think about the continuance of the business as a whole and in order to keep that household name out there we need to cost cut. The alternative is to simply cut our losses and close completely but we are still a strong player in this area.

Our marketing and our name have proved that you don't need offices in every location. From start up we had just the one small office selling property in the Jalon Valley and because of our savvy marketing strategy we were picking up Costa Blanca properties for sale in all areas. We do, on a daily basis receive requests for us to market properties from as far away as the Costa del Sol but I'm afraid popping there for a listing and/or viewings wouldn't really be too cost effective

Hamiltons of London will still maintain offices in Moraira, Albir, Gandia and Jalon with a new office opening soon in Denia (the original office closed recently due to the end of our commercial lease), and we will continue to market property in the same professional manner that we always have with the only difference being, that there will be no commercial presence for a while in certain areas. Our vendors will continue to be covered by marketing and staff from head office.

Our client’s property will continue to be marketed in both Spain and the U.K. by the varying different strategies that Hamiltons of London employ and it will not matter where that property is located or whether or not there is a shop front in the area.

Also, I'm proud to say that both vendors and purchasers recognise us as an 'English Estate Agent' and one that gives a much more professional service than many others, without any form of pressure sales. We constantly receive word of mouth recommendations even from those that do not end up buying through us because customers recognise good quality service when they see it and are more than happy to recommend us to their friends.

Just today, I had a client who told me that another agent that I had never met, spoken to or had any dealings with tell them to come to Hamiltons of London to list their property because they felt that they were not best suited to their needs so you see word of mouth and the quality of service you give is just as important a tool as any marketing strategy you can dream up.

Homefinder · 09-17-2008, 01:33 AM

Colin - Sorry but I had to moderate your post for too many URL's which would not have enhanced the content matter.
Nevertheless, thank you for a very good article. Hopefully we will hear more others from others about how to overcome the real estate crisis.

Homefinder