Property Focus Buying Property

Mon 15 Oct 2012

Property sales in the Alicante province rose by 10% in
August compared to the same period in 2011. The rise is attributed to the increase in the number of
foreign buyers.

On a national scale the buying level has also risen according
to this report and others.

Although we can not obtain figures from the notary by town,
our local experience of the Moraira & Javea property market provides a good
barometer and supports the statistics. If anything, we would say that Moraira
has seen a significant rise in property sales during 2012 compared to 2011 according to
many estate agents and independent sources. It makes you wonder what the proportion of the Moraira property sales were, relative to the increase of the regional figures announced. Such a shame the notaries
will not provide us with the breakdowns per town. We have tried but our efforts were in vain. Apparently, all figures get sent
to the regional governments statistical department, where they collate the info
by region, or so we were told. We would have thought that this information should be public
knowledge! If anyone would like to take this up and let us know, we would
really appreciate it. We think it would provide some very useful information,
especially for prospective purchasers.

Purchasers are still mostly cash buyers but there are still a few that require mortgages. The problem with mortgages recently is that the valuations are poor.

The banks simply do not want any
risk. Some of the figures they give are very hard to swallow and in no way reflect the
actual prices being achieved on the ground. A word of advice here, especially
if you want to ensure the bank can give a prospective purchaser a better
valuation, is to make sure you have any undeclared accommodation registered
before you agree to a valuation or, if possible, even offer the property for sale.

The banks can only value what is registered!  It’s going to cost you to register what has not been registered already on
completion, so you might as well get it done first and at least you will
give yourself a better sales opportunity. Yes it’s outlay now rather than later
but money well spent! It could be the difference between a sale or no sale.

There seems to be many properties with un-registered
under-builds and extensions that can not be included in the banks valuation. As
an example a villa that’s priced at 550k may only value up to 315k should the
downstairs or extension not be registered with the land registry. This value is
what the bank will base their lending upon. 60-70% mortgages can still be
obtained, so it’s prudent to be ahead of the game if you are a vendor.

If you are a purchaser willing to pay the valuation fees,
circa 400 euros, for a bank valuation, it might be a good idea to ask the
vendor or estate agent if everything has been registered before you give the
instruction to the bank requesting a valuation, otherwise you may be in for a shock when the banks give you the
figures! So before you build up any hopes, please be aware of these facts.  If it has been valued and the figures are poor for the reason mentioned, the
vendor may of course try to get it all registered to satisfy a higher
valuation, which usually takes 2-3 weeks but in the meantime you may
run the risk of someone else buying the property and then you are 400 euros worse off and
dreams shattered. So it pays to do your home work and ask the right questions.

If you require sound property investment advice, please
contact us to find out more

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