I made a deposit now I want out

I recently made a deposit on a house in the south and ever since I've heard such bad things about the Costa and the building sector that I'm not sure I want to complete...

Is it better to just cut my losses now? Or should I stick to it and go through with it?

Hi Dave, welcome on this new Spain-forum. Well, you can go wherever on this earth and you will always hear some bad things about the building sector. A rumor is never a reason to take a decision - but a reason to be cautious: collect, analyze, and evaluate the facts! On the other hand analyze carefully what you want. I can’t know if it is better to cut your losses: how much would it be? And: What would be your alternative? You only give the indication “in the south”. To give you substantial advice I would need to know much more: where is the place? What is the bad news about the real estate market there? Why you have chosen this place? What are your motives to be there (in the future)? Certainly: if you feel and realize with clear facts that you have taken the wrong decision, then it’s better to loose the deposit than to stick and to go through with it. I have even 10 more questions to find out what is right to do for you. Edward

[strandude]

Hi dave, I work in Real Estate on the Costa del Sol and your situation is starting to become quite common around here. Many people put down deposits and for some reason or another just after hear the worst stories ever and want to get out again after. Eagle seems to put it better than I ever could, analyze the facts!

Whats right for others, doesn't necessarily have to be right for you. And just because the Real Estate sector isn't what it used to be 5-10 years ago, doesn't mean its not ok for you to move there and buy, if that is what you want!

[greg]

I would definitely rent over buy, right now... Give it 6-12 months more and prices will be dropping even more...

[spanish lawyer based UK]

Hi Dave,

I'm a Spanish Lawyer based in the UK, there is some legal issues you should think about it. Plase have a look at my web site "Spanish property law uk" and if you want send me an email. I certainly can help you, to take the right direction.

I await hearing from you.

Kind Regards,

Claudia Ortiz-Fonseca
Spanish Lawyer - Abogada
Member of Bacerlona Bar Association

[susanita 2809]

I don't know why you have purchased a property in Spain. Do you want to live here or is it for an investment?
As Strandude says, you need to think carefully. If you have signed a contract, by law you will lose your deposit. This is a safeguard for you and the seller as they too would have to compensate you if they renaged on the deal.
Is your mortgage in place? i.e. do you have the financial means to complete? You need to be quite clear that there are no longer any quick profits to be made in Spain and buyers with cash are looking for some real bargains...and are getting them.
If you are prepared to think long term, then the situation is not too bad. Prices will recover but it could be 4 to 5 years.
As you allude to quality issues. There is no doubt that thousands of low quality , high density developments have been built since 2000. They will never make you much money and will only attract poor rental income. Renters are very fussy these days and expect hotel style presentation if they are paying good rental rates.
Consulting a lawyer may be the answer but I suspect you already know what you want to do. Your contract will be in English as well as Spanish and the penalties will be laid out within the terms of the contract. I doubt if you will even get a 'good will' gesture from the developer in the current economic climate.
One other solution, which may be possible according to the terms of your contract, is to try to 'sell on' your contract at a lower price.
Only you know what you can afford to risk/lose financially.

[Sundream Estate]

Hi Dave, you most give us more information.
Where exactly is the house, area, urbanization, ect, ect.
Is it a house, townhouse or apartment?
Who is the constructer/builder?
Did they give you a bank guarantee (have you control that with the bank)
When are they completing the building and going to the notary.

//Lennie

[Aunty Val]

I think the limited amount of information that Dave has given us could indicate his willingness to research his purchase in the first place.

Sadly, too many people have jumped into property investment over the last 10 years without any real thought. In its worst form it is pure greed and on many counts it is simply stupidity.

I think Dave should speak to his lawyer and ask him whether he should walk away from the deal (rather than ask a public forum where no one can give any sensible advice wihout knowing the full facts). There will be clauses in the contract which he needs to be aware of that may come back to bite him in the rear.

[top-tour-of-spain]

I thought that, under Spanish law, if a prospective buyer
doesn't go through with buying the property, s/he loses
double the deposit.

Perhaps someone could tell me if I'm right or wrong?

Linda

[Sundream Estate]

Hi Linda

Sorry, but you are wrong, is ONLY what you have write in the contract.
Nothing in the Spanish law about that.