Bloody Banks and Valuations

As you can probably tell from the title we are not happy this week with a certain fundemental piece of the purchase process here in Spain, at least for those funding their purchase with a mortgage. Banks... or as we always refer to them now "Bloody Banks" or something with rather more industrial language at times.

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Before We Start

If you are going to be buying with a mortgage we are suggesting now that the deposit contract needs to be extended just in case, you'll see why soon. Normally we would place a deposit contract of a minimum 60 days but usually 90 days if there is a mortgage involved. Now we will be suggesting a minimum of 90 days and a normal contract of 120 days just in case. Let's look into why.

The summer has brought us so many annoying things; Gianni Infantino of course, the huge corruption of Nigel Farage in the UK leading to him spending the summer arguing with a bin (Google it if you don't know what that is), a couple of extreme heatwaves due to climate change meaning a few forest fires have become a lot of forest fires and above all the continued existence of the Mango Mussolini. However, none currently match our annoyance at the inherent inability to do their jobs of banks and valuers and the effect this ineptitude has on property purchases. Let's take a look shall we.

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Valuations

Valuations are supposedly made independently of banks but valuers are instructed by banks and mortgage brokers and they are expected to organise their work so that they are efficient in going to see the property and presenting their reports to the banks. Can we just say at this point that they are about as efficient as the American Justice system and their releasing of the unredacted Epstein Files.

Spain's economy is going very well at the moment and because of this there are many professions that have a dearth of supply. As examples, driving test examiners and valuers are just two of the professions that are suffering with a huge demand though there are many more.

The driving test thing is instructive. People want to learn to drive and as the population grows the demand for driving tests has gone through the roof while at the same time lots of examiners are retiring (The average wait for a test in Valencia for example is over 6 months now) Most jobs in the new economy demand the ability to drive despite many people in Spain not driving. I have friends who are in their mid 50s and have never learnt to drive because the walkable nature of Spanish cities and the excellent public transport never made it a necessary thing for them. However, younger people do want to drive.

Similarly, lots of valuers have decided that there is more money other jobs such as real estate, architecture and other professions related to property rather than valuations. There is also less pressure to do more and more valuations and justify the numbers in those valuations. Therefore, there are fewer valuers.

At the same time there have been record numbers of property sales in the last few years and every year, as prices rise and interest rates stay low, more of them are bought with a mortgage. A mortgage requires an official valuation. It's the same old story, more demand less supply. In this case though it doesn't up the price, it just slows the process down and creates bumps in the road and traffic jams.

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What's The Solution?

Normally you put in an offer and you sign a contract on agreement to complete the full purchase in 30, 60 or 90 days according to the needs of both buyer and seller. The 60 and 90 day periods are usually for the purchases involving mortgages. We will no longer be suggesting 60 days and may well be upping the higher limit to 120 days when we can.

The reason is simple. With the valuers taking too long to value and submit their reports we cannot guarantee timescales that are too short and we would never want our clients to risk losing their deposits because of a slow bank or valuer. Because yes, the banks are slower too.

Banks have been slower in instructing the valuers to value for some reason but then later in the process they are also taking longer to send out the approval to the clients, the final mortgage offer to the clients and the paperwork to the notaries for signing prior to the signing of the property deed. Equally, at the start of the process unless you have a pre-approval they are demanding more and more paperwork before giving you the green light to go ahead with things.

When you add these delays together to the problem with the valuers then it's better to be safe than sorry and add a few extra days to the deposit contract. Remember though, if everything is done in time we can still sign earlier as long as both parties agree. The 60, 90 or 120 days are the maximum time period.

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The Truth Is...

Well, the truth is that the majority of our clients continue to buy without a mortgage thus avoiding any of these problems. It is however something to be aware of if you are thinking of getting a mortgage and mortgages are still great value with very low interest rates in Spain. You should investigate them if you want to buy in Spain, just bear in mind these time periods and make sure you consult with us. You can read about the full process of getting a mortgage in Spain at the link.

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Property of the Week

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La Pobla De Vallbona 215K

There is always value to be had if you know where to look. This apartment looks like quite a bargain actually, so we’re listing it as soon as we can before its gone.

Its in La Pobla de Vallbona, about 30 minutes from Valencia city and on the metro line, the metro station although outside the town is still only 15 minutes walk from here, and you could walk to the next town over, L’Eliana.

You might choose this town for a variety of reasons including to start with that it’s a lovely place in its own right. But also perhaps to be close to the international schools in the urbanisations nearby, or for a slightly more laid back pace of life and still with all the facilities of a modern town, or simply because your budget doesn’t allow for Valencia city, but for the sake of an extra few minutes to get in and out it doesn’t really matter, and nearby L’Eliana has a lot of what the city has to over by way of restaurants and leisure facilities anyway.

As for the property itself, it’s on the fifth floor, the top floor of the building, so very bright. As well as light, it has a lot of what people want in an apartment. 3 bedrooms, 2 bathrooms. Open kitchen and living room. A balcony onto a quiet street and with views of the mountains. Yes, there is a lift. In fact, there really isn’t any catch to this, it’s just a combination of your euro going further in the pueblos, and us taking note of the properties that stand out from the rest, and making sure you see them. 

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Stepping Stone Rental of the Week

A new departure for Stepping Stone Rentals, a long term rental property available right on the edge of Valencia just a couple of minutes walk from the metro station and various bus stops to get into the city in under 20 minutes.

This third floor walk up of 70m2 comes mostly furnished and anything lacking can be sorted. There are two bedrooms, a bathroom and a large open plan living room with kitchen leading out onto a good sized 14m2 terrace. In other words it's worth walking up to. The last tenant has just left after eight years happily ensconced in the town and this apartment is available right now.

Benimamet is a satellite town of Valencia, just 2km out, with everything to hand. There are plenty of shops, bars and restaurants and you are near to the IMED Private Hospital, the trade fair and the velodrome. There is a large shopping centre within walking distance and a new linear park where the metro line has been put underground as it goes through the town.

12 month contract available
Price 950 Euros as is.
1050 Euros if more furnishing is requested.
All potential tenants will need to either provide tenant payment insurance or to pass tenant payment insurance requirements.

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The Valencia Property Guide Library

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Further Reading

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Getting a Mortgage in Spain As An American

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The Valencia Property Reading List

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Valencia Property Reviews

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International and Bilingual Schools in Valencia

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