10 Mar 2012 05:38:

Adding it up, you are paying 60,450 to buy a property that could be sold at 39,000 less selling costs of say 10% resulting 35,000. All that hassle to make an instant loss of 25,450! In addition there is the interest on the mortgage payments over the period of the loan. Why on earth would you want to do that? Prices generally are still dropping so its likely to get worse.

Save yourself a lot of hassle by renting, maybe even this property with an option to buy. You have the added benefit of being able to move if the neighbours become troublesome or you find friends elsewhere yand you'd like to move closer to them. You said that you wanted a place in the country, but the loans were only in the towns so you looked thare. Go live where and how you want and wait until the market changes. Remember its a personal loan that you are taking that just happens to be 'secured' by the value of the property. Even after spending all the additional costs of 21450, you cant just throw back the keys and walk away if your circumstances change. You are stuck with that loan until it is all paid off, even if you move back to the UK.

No, at present you should just rent, enjoy the sun, warmth and culture.

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25 Mar 2010 07:52:

The banks are reluctant to take back any property as they have so many already, which is one of the reasons why they have very poor liquidity at present. For that reason they can sometimes be quite willing to negotiate. It might even be worthwhile delaying a  mortgage payment  just  to show that you are serious, but beware that doesn't move you into their 'bad boys' book.  Have you asked if the loan can be extended?  If you have a loan of 25 years and can extend that to 35 years that can reduce the  monthly payments considerably.  Also, if you have a mortgage that  was set up some time ago it might be that more modern style mortgage available from the same bank could have better terms. Part of the monthly payment may also be associated insurance premiums. See if you can get these reduced in some way.

This really isn't a good time to be having a property revalued for handing back to the bank as, hopefully, we must be close to  the bottom of the market. I still have concerns that the banks are going to be coming under increasing cash flow and regulatory pressure to get rid of some of their stock, which they will only be able to do by discounting significantly.  If you can hang on for a few years, assuming the property is in a reasonable location, then you should see an increase in your investment.

I'm not certain on this point, but I'm sure that in your mortgage document there will mention that the loan you took out was of a certain value, but that if the property is put to auction considerable expenses and penalties will be added and so your debt will be at a much higher level, sometimes almost double the original. It may be by handing back the property to the bank that you will trigger this item and find that your debt is so much more. Remember that it is effectively a personal debt that you have with the bank secured by the property. If you or the bank sell the property and the proceeds do not pay off the whole debt, then you will still be liable for the remainder. Undoubtedly, it is much better to hold onto the property if you can or to dispose of the property yourself even if that is below the level of mortgage that you have. If you can prove to the bank that without the property you can repay the remainder of the loan over a reasonable period, then they may agree to it being sold without the whole mortgage loan being repaid.

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24 Mar 2010 11:32:

Some contract will say that you must acquire when the Architect issues the 'Fin de Obras' - stating that he is satisfied that the building work has been completed according to his plans. Like a Building Control certificate in UK as it has to pass through the local Colegio of Architectos. If your contract says that you may have more difficulty in insisting that you only have to acquire when the Licencia de Primera Ocupación is issed, although our legal friends will advise whether that is now an improper condition in a purchase contract. that can be ignored. The LPO is issued by the Ayuntamiento and confirms that the property and whole development has been completed according to the planning permission and building licences issued at the start the development and any variations granted during the development. Also confirms that all the paperwork is in place including the FdeO and Bulitenes (not sure how that's spelt!) confirming that the water/plumbing and electrics have passed all the tests. It's now a criminal offence for a local authority official or politician to issue an improper LPO and that's why there can be long delays and insistance on everything being correct. It's in the buyer's interest.

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22 Mar 2010 19:24:

Hi Friendly. As mentioned before, get somebody responsible and independent to look at the property for you. With a 'snagging' report you should be able to know  definitely whether the property is finished sufficiently  and, if not,  it will provide you with the evidence you require from the court. However,  My understanding is that without a  of first occupation licence the promoter cannot force you to purchase the property as it is not habitable as the electricity and water companies are prohibited from supplying you with that.  It may also depend upon the exact wording of your contract.

By coincidence, I am an RICS chartered surveyor and director of Survey Spain www.surveyspain.com and we carry out building surveys, valuations and snagging surveys  in Andalucia and through the Survey Spain Network anywhere else in  mainland Spain  and the islands.

With apologies to the administrator for the advert, but you do appear to be in need of our services!

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18 Mar 2010 14:34:

I've sent a private e-mail to SurveyScotland giving details of services.

For everybody else and in reply to Faro's comments, I provide the information below

We have now created the Survey Spain Network, which provides RICS chartered surveyor services from the Western  Portuguese Algarve all along the Costas and their hinterlands of Spain to the French border, plus the Balearic and Canary islands. All the surveyors are UK qualified, resident in Spain and have many years experience working in Spain on building surveys and/or valuations for private individuals, banks, investors, developers, etc. We are all independent of banks, solicitors, town halls, etc. All our work is covered by RICS compliant professional indemnity insurance and is subject to 'peer review'. 

We are independent, experienced, ethical and professional, acting 100% on behalf of our clients and shall be pleased to help any expatriates with all property matters.

www.surveyspain.com

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