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You want to buy a property in Spain, but are put off by the fact that you have no idea what price you should pay - especially in today's market.

You know that prices are falling, but how low will they go, and when will they rise again?

In the UK, you would use the freely available Land Registry data as a basis for determining the value of a property, but nothing like that is available in Spain.

Should you make an offer based on advertised or asking price? No, the Kyero Spanish House Price Index demonstrates that even though real-world house prices fell in 2008, vendors have not reduced their asking prices.

Should you use the Spanish Ministry of Housing data for price per square metre to calculate a fair price? Again, no, the Ministry's data is based on mortgage valuations - and is unreliable from a number of perspectives.

Should you use the price per square metre quoted by the largest national property portals, Idealista and Fotocasa? Again and again, no and no, their figures are based on the advertised price and the vendors assessment of the size of their property.

These sources of information are of little use individually, but when combined with three more nuggets of information from the vendor, and Tinsa's index of property prices in Spain, you can build up a realistic price profile for a property - and use it to negotiate a great deal. Here's how.

Let's say you want to purchase a three bed, two bath town house with a pool in Almuñecar - how much should you pay?

1. A Kyero search reveals a whole range of properties & prices, from €189,000 to €480,000.

2. The Kyero price index for 3-bed Almuñecar properties in Q4 2008 is €348,000.

3. The Ministry of Housing data shows a price per square metre of €1,482 / m² in Granada province, and €1,691 / m² in Motril (the nearest town they publish data for).

4. An Idealista search reveals properties priced between €210,000 and €400,000 - averaging €2,459 / m².

5. A Fotocasa search reveals properties priced between €42,000 and €1,400,000 - averaging €2,300 / m².

From these five sources of data, we can only conclude that the average property price will be anywhere from €42,000 to €480,000, and anywhere from €1,482 to €2,459 per square metre. Not exactly precise numbers, but we're zeroing in.

Now, you need three pieces of information from the vendor of the property: The floor area, and the last purchase price and date.

The floor area recorded in the title deeds will almost certainly be inaccurate. Have the vendor measure up accurately and give you a blow by blow inventory of the house dimensions.

More information about how to measure a Spanish property.

Next, the vendor needs to show you the escritura (title deeds) which will detail how much they paid for the property and when. There's a good chance that the figure recorded in the escritura is not the price they actually paid for the house - just the part that they decided to declare.

If there's a substantial difference between what is recorded and what they claim they paid for it, look for other hard evidence like a mortgage valuation document.

If the vendor is unwilling or unable to provide you with these details, or if you get the feeling that the numbers they are providing are not credible - walk away.

In this market, the vendor must shoulder the burden of proving what they paid for the property.

Now you know the actual floor area, use the high and low figures from Idealista, Fotocasa and the Ministry of Housing to calculate a nominal price.

If the house has 200m², at between €1,482 to €2,459 per square metre, we arrive at a property price of between €296,000 and €491,000. Still too big a gap to make a useful offer - but again, this tallies with the Kyero figures and confirms you're in the right area.

Now, take the price the vendor paid for the property and have a look at this graph from the latest Tinsa price index. Why is this data reliable?

Let's say that you're comfortable that the vendors paid €200,000 for the property in 2003.

The Tinsa index for coastal property in January 2003 stood at 1303, while in January 2009, it stood at 2216.

This means that over the last 6 years, property prices have increased by 70% ((2216-1303)/1303)*100.

Applying this to the €200,000 paid for the property in 2003, Tinsa's index says that it's now worth 70% more, or €340,000.

But wait, there's more. Tinsa's index shows that property prices are decreasing, and they forecast a further 20% decrease by the end of 2009.

In effect, Tinsa predicts that their index will stand at 1773 in January 2010 - meaning that this property should sell for around €272,000 at that time.

Naturally, there will be some price variation due to location and condition of the property, and whether the vendors have extended or fitted a new kitchen, etc. But these separate sources of information allow you to work with hard data, rather than guesswork.

My advice? Find a property you're interested in, find a vendor who will work with you, do the maths, share your data with the vendor and try to arrive at a consensus on the value of the property. Not every vendor will be willing to do this.

That's fine - just walk away.

When you're happy with the vendor, and the numbers, find a compromise between the prices for 2009 and 2010 derived from the Tinsa data.

In this example, you'll be negotiating a price between €272,000 and €340,000 - still a broad range, but at least it's based on data from Tinsa, and corroborated by four other sources: Kyero, Idealista, Fotocasa and the Ministry of Housing.

More importantly, it means you can negotiate based on the price the property will be in 2010 - without having to wait.

Martin Dell, Kyero.com

Is any property below €50,000 a cheap Spanish property? Are cheap Spanish properties only to be found at auction or as bank repossessions? How much below market value does a Spanish property need to be to be considered cheap?

Continue reading: What IS cheap Spanish property?