Not sure if this comes under legal or financial… but I’m pretty sure more financial so I’ll take a stab here first.

OK.. quick story, I own a house, mortgage free, and have someone interested who needs a mortgage. My question is, if they pay a deposit to secure the property, and then the bank undervalues the house, I keep the deposit and they then either have to find another way to fund the ourchase or its adios?! (which is why I think its unlikely someone would go for a house they didn’t think would get a mortgage as they’d lose the deposit….)

We’re lucky enough to have bought 3 houses (2 for us one under POA), all mortgage free, so the Spanish mortgage is a bit of a blind spot for us.

I also presume.. that the escritura needs to be at least the value of the mortgage for the ban kto be happy, which means possibly increasing the value and resulting in more tax for us both to pay on the actual purchase.
Anyone help here?
Ever hopeful

Helen

Ok lets try and get a few pegs in the ground!

1. The bank will do a valuation (tasacion) using a specialist company of valuers. Their figure will not be overly influenced by the current value in the escritura.

2. Because the Spanish law was that deposits are non refundable the scammers saw a clever way to use the law! ie some sellers were pushing people into putting deposits down knowing full well the asking price was way beyond the vaulation. Result - buyers cant get mortgage or their deposit back - Scammers happy they had just profited by the deposit. Now it is illegal to withhold a deposit because the buyers cannot raise the mortgage.

3. If you sell to buyers with a mortgage the bank has to ensure the revised escritura value is realistic (all part of the governments cunning plan!) so you could end up with a large capital tax gains bill - but remember if you are resident and buying again that should not be a problem. 

4. Obviously if your buyers cant raise the money its adios - unless you renegotiate to what they can afford.