WHAT IS A SPANISH PROPERTY REALY WORTH

By the way mark, did you say something about me saying the buyers and sellers have equal force?   

Please don't make things up to support your own argument because that isn't something I will say.  My consistent view is  that an item is worth what a buyer is willing to pay and a seller is willing to accept.   That's what I say because that's what's true  

Anything else added to that is from someone's imagination, not from me.  Hope that's clear

 "My consistent view is  that an item is worth what a buyer is willing to pay and a seller is willing to accept."

To test the logic, let's first agree one something being worthless; a scribble on a piece of paper that no-one would pay ten cents for. But the seller wants £1 million. It will obviously remain unsold. I cannot see that in any way the seller's estimate of it being worth £1 million has any relevance - and to say that the true value is somewhere between £1 miilion and ten cents is absurd. The buyer alone dictates value.

This my humble opinion and I'd enjoy arguing the point over a beer. 

"Whats valoracion?  Is that the amount a lender places as a value for lending to protect their interests?   If it is I am guessing the surveyors will use a formula there.  That's the area this poster needs to explore to obtain a valuation I reckon. "

Yes briando55, before the bank would grant me a mortgage (something difficult to get in 2012), they sent an 'expert' surveyor at my expense to evaluate the place.  The surveryor arrived, took measurements, examined the quality of the plumbing, etc, examimed the building, the location, etc and wrote a report with their assessed value and fact and figures to justify that amount.

And as the buyer had lowered the price at least 5 times in two years, I suspected that he wouldn't go much lower.  I don't know if he was having financial issues, but he really should have taken it off the market to sell at a later date. I think if it were put it up for sale now, even without my improvements, it could get between 60k and 90k more than he got from us, based upon the listings I've seen in the neighborhood, which I discout by 20%.

Another mistake he made is instead of changing the price on his listing on Idealista and other sites, he would create a new listing each time.  So I was able to research the number of times he dropped the price by using Google to see every listing posted on the Internet. 

A few more mistakes he made:  It appeared that he never cleaned the place ever.  It was so filthy that even our agent recommended that we not buy it.  There are two magnificient terraces and one of them had 7 foot tall chain link fencing all around, blocking the views of the city, nearby mountains and the Mediterranean.  It took me all of an hour to remove that fencing and open up a spectacular view.  After paying people to clean it for month, it began to shine. 

His final mistake was having a moron for an agent.  Every time the agent cancelled appointments I made to see the place for the first time, and it was only because of a medical emergency that his business partner called me (2 weeks after I gave up ever seeing the place) to ask if I still wanted to see the place.  There were several other issues with the seller's agent - his incompetence slowed down the sell and a comeptent agent would have gotten a higher price for the place. 

But all of this benefited me.  Thank God for morons.   I know my experience doesn't apply to everyone and certainly, not to every region or even neighborhood in Spain.  But I did do my homework and I believe I have been rewarded for doing so. 

 

The example you used as two people barter over a car (I assume you can accept that's not a straw man argument when you use it). 

You might want to look up the meaning of a straw-man argument. The situational setting used for an example isn't any kind of argument - much less a straw-man argument.

It's the answers that you give to the questions stemming from that situation that are straw-man arguments and are intellectually dishonest when they address questions that were never asked while obviously avoiding the one that was.

** EDITED - Against forum rules **

However that completion only occurs AFTER 'worth' has been established and ONLY the Buyers decided that 'worth' in the car example. Yes, the seller needs to accept the final offer but he was NEVER a factor in how that price was reached by the competing buyers.   

So, the question again is: What force is a seller exerting upon the final value/worth of an item when two or more buyers are engaged in a bidding war?

** EDITED - Against forum rules **

By the way mark, did you say something about me saying the buyers and sellers have equal force?   

No I said that your intial response that the determination of 'worth' was a "two-way" thing implies that you think both the buyer and seller exert equal force in determining what something is worth.

Please don't make things up to support your own argument because that isn't something I will say.  

I don't have to make anything up about that implication because you never questioned that conclusion and in fact, you have implied the same again when you write:  

My consistent view is  that an item is worth what a buyer is willing to've  pay and a seller is willing to accept.   That's what I say because that's what's true.

It doesn't become 'true' just because you erroneously think it is nor because you want it to be so. In fact, when it can be proved to be false using examples showing that ONLY the buyers determined the worth of something during a sale (e.g. the car example), it is a sign of a mental disorder to continue clinging to the same erroneous view.      

Ok mark. Your absolutely right.   I give in.  

I cant do this anymore, I tried but I failed.   I'm sorry your having such a hard time, I'm sorry I seem to have a mental disorder to you, I'm sorry I had to study so hard and practice so long to be finally found out in the end.  

Life can be cruel sometimes but hey, when your wrong you just have accept it.   I feel such a fool. 

Please let everyone know the true nature of valuation and worth and markets.  I feel really honoured to meet someone who can see right through this now, and in such a short space of time wth such blistering evidence. 

Now, where's that medication, think I will double the dose.  

Some interesting posts. Considering the state of the Spanish property market. I would say it is definitely a buyers market. There are many thousands of sellers with very few buyers. So the buyer is king and will dictate the price. Of course the seller usually does not have to sell (unless it is a forced sale). But if the seller is asking a fantasy estate agent commission driven price it will not interest any buyers.

Most of these estate agent (Spiv) asking prices are pure made up speculation.

And all this RICS worldwide know all is nonsense in the Spanish property market where there is no information to go by. What do they know that you and I don’t know? Someone mentioned a formula they use, what might that be ‘’Littlewoods 8 from 10’’.

When you ask a professional valuer for a valuation you would get 2 answers in Spain.

Forced sale = worthless, peanuts, lucky if anyone will take it of your hands for nothing when they have legal’s and taxes to pay.

Open market = start where you want, then drop and drop and keep dropping until you get a buyer.

So in conclusion currently no Spanish property has a true valuation.

Well said potblack.   

The best thing to do is look at it as a chaos market and avoid any structure whatsoever. 

Im sure that won't lead to anybody being conned out of their life savings, it will be fine, luvvly jubbly.  

** EDITED - Against forum rules **

Thank you for the continued advice, now please leave me alone I don't want you to refer to me again Mark

At present, a good deal is to sell your property back to the Bank as they need to "buy" it respecting legal minimums limits in comparison to valuation made when lending money. These values are generally much higher than the current market value.

Also, if Banks sold the mortgage contract to a third party ( generally for a very small price), you have a right to be informed of price and pays for it and retain the house. This means, obviously, an important reduction of debt and cancellation of mortgage on your property.

Are you actually saying among other things that once the bank sells the mortgage debt you are debt free to the bank and you can only be pursued for a much lesser debt by the third party?.

Very interesting post, Maria! Can you elaborate at all, or point us in the direction of further, detailed information about this? as I am sure very few, if any, members will know about this. 

Sorry Maria.  It doesn’t make sense to me at all.  Maybe lost in translation.   

If a mortgagee is sold, it transfers a debt, not closes it off.  You can’t be free of mortgage so simply. 

Also, if a lender allows a 90% mortgage, and then the property valuation drops by 30% it’s negative in equity but it wasn’t a legal limit issue when bought,.   

Looks to me like..

If you bought the house for 100,000€ 

If paid up front deposit of 50,000€

If you Mortgaged the balance of 50,000€

If you couldn't keep up these payments

You gave the house back to the bank and walked away

Bank then offers the outstanding loan of 50,000€ to someone else for approximately 30,000€ just to get something back

Your still out your initial deposit of 50,000€ but you HAVE to be told about the banks offer of 30,000€

You can then pay this 30,000€ for your own house, but cannot have, or get a mortgage on this amount again

You are then not out your original deposit,  you paid up what the bank offered the house for, now you have your house back for 80,000€ instead of 100,000€ of course minus any other amounts you have paid, or will pay

I am only saying this is what it sounds like...Not saying this is what is true, or how it can happen, or even will happen, maybe, just maybe the banks have so much more 'Bad Debt' then anyone knows so they are glad to get anything back...All sounds not very likely though, pie in the sky so to say...To many if's but's and maybe's.

Baz, that's exactly what I thought Maria means. My only question therefore: if (in your example) you can raise the 30k to buy back from the bank....then why couldn't you keep up the original mortgage payments? If you're skint, you're skint, surely?

Hi Roberto

If what Maria says is true (which I doubt) why do you need to be skint? Just jump on the band wagon, throw the keys in, have done with the 200,000 mortgage, then buy it back for 5 bob, no mortgage, no debt.

Who said Santa does not exist?.

Yes, Roberto 100%, skint means exactly that skint, and if you did have a mortgage then make provisions to pay it, but as we all know circumstances for people do change, also some, perhaps many would buy a house in Spain with no intentions of paying it back in the hope they got away with it still believing Spain is slow in this way.

I don't do finance anymore on the cars that I sell, you would be surprised how many when I did never paid past one or two payments in the hope they got away with it, some did many didn't, one friend is a Sheriff for the Courts and much of his work are non payments on house loans...How the other half live.

Ok.

A bit more on explanation. I am of course not displaying all the legal strategy here as it is part of our know how. Any good lawyer could advise you on this too of course.

1.Keys back to Bank: In order to protect mortgage debtors, our government passed, many years ago, a limit for the value banks can give to properties when being repossessed by them after an auction and , as being based on the inflated value of then,  and adding interests and legal costs, in most of cases that minimum value equals pending debt of those who hired the mortgage in the peak years ( 2006, 2007) and whole payments are unsustainable for a house whose value is highly lower now. Good negotiation with the Bank usually works for the deal to be signed. At the end, they save the judicial costs of repossessing your property. 

2. Sale of debt to third parties, Consumer Law and buyout rights. A bit more complicated process which will involve judicial fight and which obviously is no in the appetite of many, reasonably.

Supreme Court has declared the null character of the clause by which the bank did not have to communicate to you the sale of the mortgage . Based on this and if you find ( there are available online databases for this), that your mortgage contract was sold to a third party, you can ask the bank for that information and exercise your rights to the buying out of the debt.

Not magic,  just Consumers Law played against financial engineering. So that people matters. Simply.

M

This is an email recived from a leading estate agent. Is the information correct? Can I trust this agent? I have ommited the agents details incase it is against forum rules.

Hello xyz,

We do apologies but we have only just received your email from the website you responded to.

Spain is very different to the Uk and offers are not accepted on any properties unless they are bank repossessions. This is the Law and in spite of what you may have seen on property shows like a place in the sun developers and agents cannot accept offers below the asking price due to the tax implications here unless they are a bank.

These shows often only use bank repossessions which fall under market value giving a false impression of the process here.

To buy a property in Spain you must register an interest through an authorized agent such as ourselves and we then put everything in place from lawyers to notaries and liaise with the owners or developers on your behalf.

If you would like any further information please ring me directly on 0034 

Kind regards

Brian ABC