Originally Posted by Fabulous Frank
I am wondering if anyone here has any ideas on the current situation of spanish banks valuing property sales at pre-2007 levels for their accounts but - at the same time - permitting sales with vendors at a far lower price.
I have been looking at two separate properties in N. Costa Blanca. I can settle either in cash but in both cases the vendors are underwater after the sale by around 50%. So the sale can occur - though not for cash, only via 100% mortgage - but then I am informed that the 'bank valuation' is nearly 50% higher. Is this a common practice in Spain? Spain also seems to have very draconian debt laws - no walking away and posting keys - so how is this situation anything other debt re-assignment for many current purchasers? Added to which, Notaires in Spain do not have unlimited negligence liability like France/Italy, if there was anything untoward in such contracts.
As of this point, I am going to pull out while seeking opinions of an independent avocat from a different region to try and make sense of this. But gut feeling? This feels like another sort of subprime/endownment type scam looming down the road for some unwary buyers into the current market. Or is there a good explanation for how such a system would work in a buyers best interests?
If I am reading the post correctly, it seem that the bank will sell to you at a bargain price, but only if you take on a 100per cent mortgage with them.
I am sure that if you really want the property and hang out for a cash transaction, they will give in to you.
It seems that they are trying to recover some of their loss, trying to force the mortgage issue will give them interest and enable them to save something from the situation, as they will have you by the S and Cs for the foreseeale future.
Stand your ground, argue the toss, tell them that you dont want to be paying interest for the next X number of years, and to effectively take a hike, it you want the property.
Tell them that you are a cash buyer and you will not allow them to tie you up paying interest on a mortgage when it will only be to their advantage, as they interest you would earn by investing your money would be nowhere near as high as what you would be paying, if you accepted the "generous" offer of a loan.
Ask them if they want to sell the property on not, and if they do, to cut the crap, remind them that cash is king.
I cannot see them losing a sale when then have so many repossessed houses on their books.
Go for it, do what is best for you, not them, and above all be vocal about it.