Later we went back to Carlos’s office to discuss finance. MRI's financial experts were only too willing to tell us that we could afford whatever we wanted and we chose to believe them. They explained the expenses that we would accrue like taxes and fees and assured us they could arrange a loan for us to buy. The adviser scribbled it down something like the following:
Purchase Price €201,000
Reservation €6,000
20% Deposit €40,220
7% IVA
Legal 1.25 + 16%
Completion 2007 January
80% mortgage
7% IVA
1.8% Stamp duty
Notary & registration
We weren’t sure what all the things meant, but we thought we would have enough to cover the total balance and that was the main thing. It wasn’t like buying property at home. It seemed more complicated with too many expenses that we didn’t quite understand. An initial deposit of €6000 was required to secure the purchase and Maurice took out his credit card and handed it over. The exchange rate at that time was quite good and it converted to about £4200. I was thinking have we done the right thing and I texted my daughters to tell them the news with the hope of reassurance. They were both very non committal. It did seem like a good opportunity to us and a wise investment. We were in our 50’s and we could keep it for a few years and then sell it for a profit.
The financial adviser said that he would contact a local bank about our mortgage and would communicate with us by email to keep us informed of the progress. It would be an 80% mortgage so we would need €40,000 deposit. That would certainly give us something to do with our savings.
We met again with the after sales person, Helen, who explained how she would update us on the building progress and arrange the delivery and fitting of the furniture when we had decided on our choice. If we decided to furnish our apartment without the help of MRI, we would need to go to different furniture shops, arrange delivery and set up everything ourselves.
We were then passed to the rentals person, Natalie, who explained how MRI would look after the apartment and have it rented out on our behalf, organise the laundry and the cleaning and take a percentage of the rental. We were given literature with detailed projected figures and costs and we went away with our heads buzzing.
Example – 2 bed 2 bath, well furnished, qualify appliances
High Season Rent
€700 / week rental
€ 70 – Commission (10%)
€ 50 – Property Clean and Preparation (2 bed)
€ 20 – Welcome Pack (tea, coffee, sugar, milk, orange juice, water, eggs, bacon, bread,
butter, toilet roll)
€ 15 – Linen change (per room)
€535 – Net Income to the owner per week
As we sat on the balcony of our hotel room that evening we hoped and prayed we had done the right thing. We were going to be Spanish property owners and what could be wrong with that?
We took a taxi to a restaurant at Mojacar Commercial Centre which had also been recommended by Carlos and in fact met up with him and a few of his colleagues for a drink before we enjoyed another good meal that evening.
We flew home the next day. We now had a Spanish solicitor, a financial adviser and a substantial deposit to pay so that the mortgage could be arranged. The apartment was to be completed by January 2007 and we were hoping to spend our first holiday there later in the year, perhaps April or May. We had so much to look forward to and hopefully not regret.
We were still very unsure that we had done the right thing and we could have refused to continue with the sale by forfeiting the initial deposit of €6000 but who wants to throw away money, so we continued.
In the weeks that followed, the mortgage had to be arranged and the expenses kept increasing. I realised that our advisers had been somewhat economic with the truth about the expenses which were going to cost us much more than we originally thought. Even though I complained about this, nothing could be done and we had to find the money. We discovered that the best way to send money abroad was to use a finance company where we could buy euros for pounds and have them transferred to a Spanish bank account. The company would secure a rate for a period of one or two years and money could be transferred monthly. Psychologically, it wouldn’t be an easy task to withdraw the initial large sum of money from the bank and send it abroad but that’s what we would have to do. I was in continual email correspondence with the Spanish solicitor and the property company as I tried to understand the process.