Advice on off plan purchase please!

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This topic contains 15 replies, has 9 voices, and was last updated by Profile photo of Anonymous Anonymous 8 years, 1 month ago.

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  • #54426
    Profile photo of Anonymous
    Anonymous
    Participant

    I’d like some objective advice on an off plan purchase in Murcia.

    The developers want 30% of the purchase price upfront. It is guaranteed by a caja. But what happens if this caja goes out of business? Will the Spanish govt protect such payments for foreign nationals?

    Given that the market is in a coma, my head is telling me to withdraw from this property as all the risks are with me (And the benefits of low purchase price not so clear now that prices going down and likely to do so for short term…)

    Any advice appreciated.
    Winton.

  • #87133
    Profile photo of katy
    katy
    Spectator

    Not advice but my opinion. Most bank guarantees ought to be written on toilet paper! Latest word is that the banks do not want to pay out even when the developer goes bankrupt, you are expected to become a creditor! I do not know but I suspect the Spanish Government would not step in to pay out on a bank guarantee. If you are able to get out of the contract, do so and have a look for a finished property whilst prices a dropping.

  • #87134
    Profile photo of Anonymous
    Anonymous
    Participant

    I fully agree with Katy. In the present climate I am surprised that the developer is asking for 30%. He is lucky that some one is willing to buy in a falling market.

    One thing I can confirm that Spanish Government will never guarantee anything for non Spanish nationals. You just have to look at the Tax/local laws, etc to form a opinion as to which way the Government is thinking.

    Besides the the guarantee is not worth the paper its written on. I should ask for a bona fide copy of the guarantee before you sign or part with any monies at all.

  • #87135
    Profile photo of Paul
    Paul
    Participant

    Winton, in this market I would steer well away from stage payments which appears to be the norm when buying new build in many overseas countries. Why should you fund the Developer’s build costs or even deposit stage payments in a Bank which could go under?

    You don’t pay stage payments in the UK so don’t do it abroad, in the UK you part with a max. of 10% on exchange and you remain in control.

    It’s a complete nonsense to pay stage payments, if you see something you like, insist on 10% down with the balance on completion, then if things go wrong, you can walk away rather than chase the Developer, Agent and Lawyer to recover your money.

  • #87136
    Profile photo of katy
    katy
    Spectator

    Some Developers are now advertising rent to buy. Rent and if you decide to buy at the end of two years the money is deducted from the purchase.

  • #87138
    Profile photo of Paul
    Paul
    Participant

    They are also doing that too in the UK katy, trouble is it’s a way for Developers to stick out for their asking prices, it’s far better to negotiate a large discount instead if you want something.

  • #87140
    Profile photo of Melosine
    Melosine
    Participant

    Be it in Murcia or elsewhere in Spain would strongly advise against buying off plan.
    Prices are NOT going to rise and in this current climate what you think you are buying into may not materialise even if totally legal and presumably 🙄 guaranteed by any bank.

  • #87142
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @Winton Charminster wrote:

    I’d like some objective advice on an off plan purchase in Murcia.

    The developers want 30% of the purchase price upfront. It is guaranteed by a caja. But what happens if this caja goes out of business? Will the Spanish govt protect such payments for foreign nationals?

    Given that the market is in a coma, my head is telling me to withdraw from this property as all the risks are with me (And the benefits of low purchase price not so clear now that prices going down and likely to do so for short term…)

    Any advice appreciated.
    Winton.

    ok. first of you are looking at buying an off-plan now?
    I would not be so worried about the bank but whether the developer will survive.

    considering the current demand for off-plan investments in southern spain. You should be able to argue the 30%.

    Many developers are offering a variety of payment terms. say 6.000 down and maybe 500 euros a month until completion (only an example)
    and its probably worth asking you why the asking price is low, ESPECIALLY from a promotor.

    When does it go to completion? If it is soon, say the next few month. put down as reservation only. wait for all licences and then continue with the purchase. If its 2 years down the line, don’t buy now. Lookk for something completed. You don’t know what you financial situation will be in 2 years and might not get that ‘guaranteed mortgage’.

  • #87146
    Profile photo of Anonymous
    Anonymous
    Participant

    If you decide to go ahead, definately ask to see and have copy of Bank guarantee, copies of the licence and permissions to build , make sure the land is not rustica and is included in any plans of the area, offer to pay a percentage of the cost what you think is reasonable to initially put down and get it in writing in the contract of payment of compensation if build is over due , even have it put into the contract that if overdue and any legal problems you are at liberty to cancell the contract with out any financial come back on you, with repayment of your monies already paid. If they are above board and want to sell whats the problem if they are promising you things let them guarantee it all in writing.

    Im afraid I wish I knew then what I know now about all the legalities etc of off plan builds and had not just taken the word of our legal team solicitor, agents etc. 6 years down the line and still no house, no licences etc etc, a court case on the go thousands of pounds of our money getting further and further from our reach by the looks.

    I personally wouldn’t buy off plan again but as other posters have said plenty of good “legal” resales on offer. Why wait for ever to get your home in the sun when you could have it now. Heaven forbid You might not even make it to the end of your off plan build 🙁

    Whatever you do I wish you good luck.

    Axwhale

  • #87149
    Profile photo of Anonymous
    Anonymous
    Participant

    Muchas gracia a todos for your replies – very useful and much appreciated. Looks like re-sale is the way to go then!
    allez, Winton

  • #87150
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @Winton Charminster wrote:

    Muchas gracia a todos for your replies – very useful and much appreciated. Looks like re-sale is the way to go then!
    allez, Winton

    or something new but completed with all licenses in place.

    Although personally i’m not a fan or Murcia, there should be enough new builds to choose from.

    Good luck

  • #87152
    Profile photo of Anonymous
    Anonymous
    Participant

    Winton, If resale make sure that property has all its correct nescessary papers , just ask to see everything. Although I think now estate agents are being asked to make sure every property is legal before they put them on their books or they could lumbered with a hefty fine.
    Good luck anyway.

    Axwhale

  • #87154
    Profile photo of Anonymous
    Anonymous
    Participant

    ” If they are above board and want to sell whats the problem if they are promising you things let them guarantee it all in writing. “

    What, you are missing here is the Spanish ego. In Spain, people in position do not like being dictated by others. Specially a non Spaniard.

  • #87155
    Profile photo of Anonymous
    Anonymous
    Participant

    shakeel

    very true. Following advice from our previous lawyers, advising us to complete despite several huge breaches of contract, i wrote saying i thought we would be crazy to complete. He wrote back saying ” How dare you say my advice is crazy, i am your lawyer!”

    We found a new lawyer very soon after that.

  • #87158
    Profile photo of Anonymous
    Anonymous
    Participant

    Stay well away from off-plan partially completed developments – they will either never be built or never get licences or facilities such as golf courses or pools will be smaller or less than promised if at all – you don’t need the hassle. If you are bored someday look back at the postings by the victims of off-plan purchases on this site and the great bank and insurance guarantees they hold or don’t hold as the case may be!

    Look at resales or fully completed developments with all promised facilities in place – the same discounts if not more are there for the taking.

    You will need a good reputable lawyer to check out all licences and paperwork etc – make sure your lawyer or solicitor is dual qualified and not Spanish only qualified.

    In the current climate there is no need to feel pressured into handing over any money and certainly not to any intermediary.

  • #87159
    Profile photo of Anonymous
    Anonymous
    Participant

    goodstich44;
    Was, he by chance called Francisco Franco ??? I guess he must be paying you to be his client.

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