# Advice needed! Mortgages / House purchase.



## thedalmeny (Aug 18, 2015)

Hi All,

Figured this would be a good place to get information now we have set our location and budget.

We're currently in Villamartin, an area we like and looking at property. We plan to come back out in another 3 months to look some more before settling on a property to purchase.

*The Situation:*

My parents are reaching that tender age, dad is 61 and mum is 54 and they want to spend more time in the sun. They moved to France for 3 years but decided to come back when my son was born, he's 6 now.

They were looking at buying a small property in Spain, second holiday home... However as me and wife (both 31) are looking to invest in a 2nd property an idea sprung up. (We already have a large 4 bed detached in UK and mortgage only represents 10-15% of our net income.. With no desire for a bigger home, seemed wise to buy another property)

My mum and dad will put in a deposit - £20,000-£30,000 (gift to me) and I will get a mortgage (which could be easier considering my age) and ill purchase a property in Spain. Around the 200,000 to 250,000 euro mark. 3 bedrooms with a private pool...

I will cover 75% of the mortgage cost per month, them 25%. They'll downgrade their 4 bedroom detached in the UK to a 2/3 bedroom semi as a base, they already have the capital for deposit before downgrading.

Basically it gives them a holiday home of a good size to spend 6+ months of the year in, also gives me a place to holiday in term times and a long term investment for my retirement. If anything critical happens to them, the risk is reduced as I can cover the property. Agreement will be drafted to cover both parties (although were a pretty close family)

*My have a few queries:*

- What should we be looking at offer wise under asking, 10/20/30%... I've seen people say 50% on here but that seems high?

- Mortgage wise, is it best to ask a UK bank like Satander or approach a Spain broker? If so anyone recommend one?

- Where is best to locate a reliable solicitor?

- Fee... Research wise it looks like I should be accounting for 10% of purchase price in overall fees? Correct? It will be a second hand property most likely, not new.

Thanks all for ya help.


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## snikpoh (Nov 19, 2007)

Your post raises a few questions - are you working in Spain? Mortgages are very hard to come by but at least if you're working you might stand a chance.

I never understand the question of "how much less should we offer". If the price has just been reduced then you may have little room for movement. A property is only worth (to you) what you are willing to pay! Don't look upon it as an investment because you'll be disappointed.

I presume the property will only be in your name?

Why a solicitor - use a good gestor who perhaps works with an abogado.


The cost of purchasing is nearer 15% now with the increase in transfer tax.


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## Horlics (Sep 27, 2011)

thedalmeny said:


> *My have a few queries:*
> 
> - What should we be looking at offer wise under asking, 10/20/30%... I've seen people say 50% on here but that seems high?
> 
> ...


1. Where I live, the 30% days are gone. Depends on location. I am sure somebody somewhere will get a 30% discount this year, but whether that's possible where you want to buy I don't know.

2. I don't know.

3. In the town you are buying in. Have a look which ones exist and choose one.

4. 10% is the tax. You'll also have legal fees and others. People say 12%.


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## Rabbitcat (Aug 31, 2014)

I reckon you should aim for a discount around the 15% mark- that covers your buying costs. Of course it depends very much both on the seller and how much you want a particular house.
Good luck with your new adventure


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## thedalmeny (Aug 18, 2015)

snikpoh said:


> Your post raises a few questions - are you working in Spain? Mortgages are very hard to come by but at least if you're working you might stand a chance.
> 
> I never understand the question of "how much less should we offer". If the price has just been reduced then you may have little room for movement. A property is only worth (to you) what you are willing to pay! Don't look upon it as an investment because you'll be disappointed.
> 
> ...


Not working in Spain, in the UK. For me it'll purely be a holiday home and then long term investment for my retirement. If I did ever move out here permanently, I'd still retain a property in the UK and contract in there 3-6 months of the year.

Parents will work for next 4 years and then be fully retired, splitting their time between the UK and Spain. Property will be in my name.

In terms of offer under asking, maybe it's because I'm used to the UK market where on average people offer around 10% under and the average house sells 7% under asking. I'm assuming in Spain there is a similar range, a percentage under asking people generally expect that's reasonable but not entirely insulting.


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## Horlics (Sep 27, 2011)

thedalmeny said:


> In terms of offer under asking, maybe it's because I'm used to the UK market where on average people offer around 10% under and the average house sells 7% under asking. I'm assuming in Spain there is a similar range, a percentage under asking people generally expect that's reasonable but not entirely insulting.


Depends where you are. My daughter just bought in the West Midlands and had to submit a bid in a sealed envelope because they'd had 3 offers at more than the asking price. I am thinking of selling mine and have no doubt it will get the asking price. It doesn't matter if the "average house" sells for 7% under asking price because the average house isn't a real house, it's an aggregate number on a spreadsheet.

When you're looking at a real house and you want to buy it, all the relevant factors come into play. Factors such as, what will the owner sell it for.

If you're looking for guidance on what to offer, hey, try 20%.

Only give a **** about offending people if you are moving in a small Spanish village full of locals with few expats. The family and friends won't forgive you for ripping off Senora Gomez (even if the price you pay isn't a rip off! - yes, there are expectations in Spain - the expectation that you'll agree that their over priced property is good value).

Alternatively, if it's a Russian start 50% below for a bit of fun.

I doubt this is helping much, but frankly, it'll be no less helpful than any other reply you get.


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## Horlics (Sep 27, 2011)

Oh, and about "investing" in Spain.

Buying in Spain is a lifestyle choice, in my view.

The UK property market will very probably outperform the Spanish market for many years to come.


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## thedalmeny (Aug 18, 2015)

Completely agree on asking price...

While I'll always look at local sales and if a house is priced well against that then offering asking price is fine - however often is the case that doesn't occur hence the reason in UK people often pay 7 percentage under asking.

It was simply a query to assess what people's experience was, not having the same knowledge of the Spanish property market. Demand etc, many things affect the potential negotiating power of a buyer.

I have however found out we need a 30% deposit, or at least that is what agents are telling me. Thankfully we have the capital for that.



Horlics said:


> Oh, and about "investing" in Spain.
> 
> Buying in Spain is a lifestyle choice, in my view.
> 
> The UK property market will very probably outperform the Spanish market for many years to come.


Of course, which is the purpose for my parents.

When I say investment, I'm talking in 25-30 years time as were only 31. To be honest, it will likely used as a property for us to enjoy in the sun when we're in our mid 50s/60s.. Rather than to profit. Dependant on circumstances.


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## Horlics (Sep 27, 2011)

I suppose one approach is to say, "show me what you'd show me if I had 30% more to spend, and then tell me which of them you might be able to negotiate down for me".


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## SteveScot (Feb 11, 2013)

Back in 2010 when I bought, I offered about 15% below the asking, and we eventually ended up shaking on 10% below. Any property is, of course, only worth what the marketplace is prepared to pay.

It was a bit tricky trying to get a mortgage in Spain, even with a squeaky clean credit history, and about a 40% deposit. The banks were wary of lending, and finally one said they would lend. I wanted to take the loan over 10 years; the bank manager wanted 20 years. In the end I took it out over 20 and paid in back in 5...

It may be easier to release funds from your UK property by way of remortgaging, but you will need to sit down and do the sums.


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## Pazcat (Mar 24, 2010)

We just brought a house and got a mortgage easy enough with enough competition to choose the bank with the best terms for us.
As a resident the standard deposit is 20% and we pushed for slightly less than that and got it. Somewhat similar to Steve's post as we wanted a shorter time frame and they wanted over 20 years. As a non resident I couldn't tell you but 30% seems reasonable enough.

Also I would say snikpoh is pretty close to the mark with around 15% worth of added extras, tax and fees especially with a mortgage which adds more. You can try and negotiate lawyers fees or gestors etc but if you plan on making a provision for 15% then it will be even better when it's less.

Another thing is the bank we went with in the end wouldn't even entertain the idea of lending for a property on rustic land, others may but I guess you have to ask.


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## baldilocks (Mar 7, 2010)

Starting from the earliest posts:


> What should we be looking at offer wise under asking, 10/20/30%... I've seen people say 50% on here but that seems high?
> 
> - Mortgage wise, is it best to ask a UK bank like Satander or approach a Spain broker? If so anyone recommend one?
> 
> - Where is best to locate a reliable solicitor?


Offers - look at a range of properties in that and other localities, judge how the prices compare (taking into account what you are getting for your money) and pitch your offer accordingly. Because you have carefully reviewed the situation, you have reasons to give for making the offer you have made, rather than just appearing to be "pushing your luck." The house we bought back in 2007 was advertised at 87k, we liked it and would have paid the full asking price but decided to offer slightly less (the vendors expect that anyway) at 85k. They might have been happy to accept 80k but we were happy with 85k and because we hadn't "screwed" them, they were happy to accept just a holding deposit of 2k with the balance being paid over time - we still had to sell our flat in UK. They were in no great rush to get out anyway since they were going to build a new house near their son. We actually extended the mortgage on our flat to provide our stage payments, including the final one and a month later our flat sold for cash.

Banks - Santander in UK and in Spain are two different animals and in our personal experience the Asst. Manager at the nearby Santander screwed up our account opening so that we were banned by the Banco de España from opening an account for three months.

Solicitors here (abogados/as) are not the same as in UK although they will do much of the same work. Do not think that you will gain anything by using an English speaking one. Go for a good Spanish abogado and a good translator/interpreter. Always employ people for their primary profession, never their possible secondary one, e.g. it is no good employing a useless lawyer, simply because he/she speaks English.

Finding a good abogado just as any other tradesperson is a question of asking around in that area - neighbours, banks, etc. (take care to get several recommendations to reduce the likelihood of familial connections.)


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