Mortgage valuations on Spanish property

[aracena]

We are in the process of buying a house in Spain. As we live full time in the UK the Spanish bank will only give us a maximum 60% mortgage. The bank has valued the house at 10% lower than the price we offered to pay. We can’t afford the shortfall although we could offer a little more as the deposit - say 3% more. Unless the vendors are willing to drop the price it looks like we might lose out. I could cry with frustration...There are very few houses like this in the area and we wanted this particular house as we have friends living in the same development. Has this happened to anyone else ? What was the outcome? I think I’m trying to prepare myself for losing the house...

Ask the question. That's your starting point. Work out what you can afford to pay as a fall back for negotiations. If they won't drop the price to the bank valuation, let them sweat a bit before you do go back. Is the area one with a strong market? I thought the Spanish property market was on its knees. But then my reference point is episodes of A Place in the Sun from 3 years ago.

Thank you for the good advice! They have refused to drop the price. We can’t make up the shortfall although could go some way. We ‘re trying to get a mortgage with another bank - we have to try to get 3 valuations or they will keep our deposit (6k euros - so not to be sniffed at! But I’m beginning to think maybe we shouldn't pay so much anyway even if we could...I really thought we’d offered a fair price though - they have already dropped 40k of original asking price...the market is beginning to pick up slowly in Spain and where we are there are very few houses on developments - it’s all flats or villas. The first we don’t want and we can’t afford the second...Maybe if we hold our nerve they will change their minds...