All seems to have gone pear shaped

Finally the valuation appeared in my inbox today. Not good news i'm afraid . I jinxed myself in earlier postings about buying the property and I suppose we got a little ahead of ourselves too. The process hasn't been helped by the lack of assistance from the builder (Key Mare) either.

The purchase price was 139,800 Euros, plus the iva, gives a total just short of 150,000 Euros. This is where we got stung as although it wasn't an off plan property, it was sold at the off plan price some three years later and when finished. On the trip, we looked in many agents windows to get a feel for the area and for prices. It looked to be priced reasonably well and we committed.

This is where the problems began. The builder took 3 weeks to issue the contracts to our solicitor which took us into August when absolutely nothing got done. The first week in September the builder was then breathing down our solicitor's neck for a notary date but we had to wait for valuation. Then the valuer couldn't get access to the property as Key Mare wouldn't make anyone available for the process (gated community and no builders on site). This took another 2.5 weeks to resolve. During all of this time too, the money markets had been collapsing around our ears causing the bank to be more jittery than normal. So all in all a 9 week delay thanks to the builder Key Mare.

The valuation arrived today and it is less than the selling price, let alone including the iva, so it looks to be Adios to this particular apartment and the fees we have paid for valuation, solicitor, etc.  We did put a clause in the reservation contract that the purchase was subject to a satisfactory mortgage offer, so hopefully the 6000 Euros is safe, I suppose we will find out soon if/ when/ how.

It is annoying as we have been so positive about the prchase and thought we had done all of our homework correctly. It seems that Northern Rock appeared at the wrong time. Had it happened next week, the outcome may have been different. It's a bit too early to go and drown my sorrows, but I will do later.

Mark

hi mark

sorry to hear things have not gone to plan .. hopefully it will all work out and at least you wont lose any money. 

There appears to be a bit of a difference between what people are asking for properties and what they are actually getting (resales) and maybe that is now begining to be reflected in the valuations.

But on the positive side, there might be something better out there for you and now you have the chance to find it!

Good luck

Just spoken to our mortgage broker and it seems the valuation is automatically appealed, and has been turned down, now there is nowhere else to go . He has suggested going back to the agent (MRI) and trying to strike some sort of a deal where we can complete and are all happy (I don't hold much hope there) as we have everything we need to finish this now except for the correct valuation and failing that, try Key Mare (I hold out even less hope for that).

Just a case of "wait and see" now.

Mark

The annoying thing is that the mortgage company asked us to provide a valuer which should have been to our benefit. The broker contacted Key Mare several times for a list of valuers that have been used to value their properties and received no response, hence we ended up with their appointed team. That seems to be the whole story with Key Mare, no- one wants to communicate!!!!

We did ask Smiley for a quote, but my Wife never got the information.

Mark

Mark

The first broker we had were looking at Bancaja for us & they came in with a valuation of 192,000 against the CajaMurcia one of 187,000

Noreen

Mark,

Not the end of the world, we get down valuations sometimes, they can usually be resolved, if you want to pm me feel free.

I think it was just "one of those things" and we somehow missed each other before slipping through the net. It happens from time to time.

The lender is not a traditional Spanish bank, they have American roots, hence probably some of their different methods and their increased hesitancy in the current market environment. We need to see what happens over the coming week, but I think duff advice from agent and builder, plus us probably being a little too optimistic have caused the problem.

My fault for announcing publicly our intentions, I always thought it was a bad idea in case something went wrong .

Mark

This is a new apartment though Patrick, not a resale.

Mark

I'm sure you could do better with a Spanish bank/valuation Mark.

Don't give up hope yet. I'm sure someone on here will be able to help.

Our house needed work doing and the bank we used actually got a valuation based on what it would be worth once finished.

Laury

I am aware of that mark but I got the impression you bought from an off plan investor - if that is the case they will have considered the price that the investor originally paid for the property and the timescale involved before considering what to advance - as I said I dont know the full story -

Laury while the bank Mark is talking about has US roots, they are a Spanish Bank as such and use Spanish valuation companies - they simply have some strange ways of doing things  

Hi Mark

I'm sorry to read that things aren't going to plan. Like others have said, maybe you could be better off with another lender? Or, could it be that the valuation is correct and the purchase price is too high? On our complex which I believe is not far from where you are intending to buy an owner has several one beds for sale and he has just recently reduced the price for them all, and the price is now a fair bit less than the figures you have mentioned. I hope you manage to get this sorted one way or another after coming so far. Good luck.

Regards, Carol

You could try and push the agent to reduce the offer to the builder and reduce their commission as well to try and close the gap!

Otherwise go through another lender to ensure the bank val is in line. If it comes in the same then unless you can fund the difference, you may as well pull out.

Be careful you do not lose your deposit despite the clause!

Alternatively look for another property, prefereably a resale as those prices are more favourable, or buy from a seller who already paid his deposit - if he is desperate enough he will drop the asking price. Unfortunately most agents wont promote those as they prefer to sell higher commissioned off-plans - you may need to go to the developer direct!

Good luck

I am aware of that mark but I got the impression you bought from an off plan investor - if that is the case they will have considered the price that the investor originally paid for the property and the timescale involved before considering what to advance - as I said I dont know the full story -

Hi Patrick. The property was handed back to the builder before completion by the previous buyer, we bought direct from Key Mare. Not sure how the bank would have found out information on the previous buyer, doesn't data protection come into it? This is supposedly the reason (according to Key Mare) that the purchase price hadn't increased, because they weren't allowed to!! I feel an extra little bit of bull was added in there!!

You could try and push the agent to reduce the offer to the builder and reduce their commission as well to try and close the gap!

Hi Rixxy. We have contacted both builder and agent by email on Saturday. Both emails were read before 9.30am this morning according to the read receipts, as yet there has een no response. I have since also telephoned MRI on their nice freephone sales number asking why they haven't come back to us yet and was told someone would definitely telephone this afternoon. Yes, the deposit clause is one thing, getting it back will be another!! Luckily(????) it is the reservation deposit and no more, so if we really have to lose out, although it wil be a big gaping hole, it is nowhere as big and gaping as it could have been!

I'm sorry to read that things aren't going to plan. Like others have said, maybe you could be better off with another lender? Or, could it be that the valuation is correct and the purchase price is too high?

Hi Carol. It has taken forever just to get this lender to come up with the goods. We were looking at a back up plan with Caja Murcia and got as far as the valuation, but Cristina proved to be extremely flaky. Ringing 2 or 3 times a day then not for 2 weeks as she was on holiday (only 2 weeks after the August shut down!!)  which didn't help us as we should have really completed almost 2 weeks ago!! I think possibly the valuation is correct now, whereas a couple of months ago it may have been a bit higher and therefore not so much of a gap to bridge. Although we kept level headed at the time of the trip, I think we were suckered into believeing that the valuation as an 80% LTV would allow us to cover some of the costs as well, but that has gone out of the window.

The actual valuation is only 500 Euros down on the purchase price, even so, don't really want to pay 500 Euros more than it is worth. The problem is that the IVA on top is what has killed us. We knew it had to be paid, but this is where we were told the valuation of a off plan would cover it, by both the builder and the agent. We were sceptical about this, but went ahead anyway.

We definitely aren't being put off by this little episode and stil want to buy if it is at all possible. I think it just depends what us, Key Mare and MRI can come up with that is suitable to all.

Sit and wait time I think!

Mark

As I said I dont know the full story nor have I seen any of the documentation but if the developer is selling to you direct then it would appear that you have paid over the odds for the property. We have a system of valuation appeals that we go through but this takes time. PPCs effectively become public information here and are not subject to DP laws - different country different rules - to know whether there was any bull you would need to ask Key Mare (or should that be nightmare) - if the original investor contract has been transferred into your name it is highly likely the bank will have known what the original price was if it was lower

If this does all turn to brown stuff you are far better advised to deal with some of the smaller agents around that will find good deals that represent good value for money as they will likely have sellers on their books that need to sell for one reason or another - commissions paid by developers to agents (especially the big boys) are normally a lot higher (and certainly so with off plan) and that has to be paid somewhere - here on CDS typical commissions on resale are 5 to 7% - commissions on off plan somewhat higher although it has become a greyer area these days but I imagine the big boys are still raking upwards of 10% (in the really bad old days that would run at 17% upwards) - the money has to come from somewhere????? 

So sorry to hear about your dilemna, Mark, and I hope you manage to work it out satisfactorily. At least your story serves as a useful lesson to others following in your footseps (which is what EOS is all about, right?)

Doesn't it seem strange that David Cameron gets a round of applause for suggesting scrapping the 1% stamp duty currently charged on homes up to £250k, while here in Spain we pay 16% IVA on new homes, or 7% transfer tax on resales, regardless of their value? Personally, I'd be chuffed to bits to pay only 1%, or even the highest band 4%!