We left our intrepid pair Janet and John on the doorstep of their possible dream home in a state of nervous apprehension. The agent, Jose Miguel had just informed them that allegedly there was another buyer in the frame expressing keen interest to buy the same house.

This information was forthcoming as soon as Janet and John had mistakenly become very excited about the prospect of finally finding their potential new home overseas. Jose Miguel wanted 6000 Euros immediately to secure the property for them. So what to do now? Jose Miguel had become their friend; there was a certain amount of face involved now. They had been with him for two days, and he was the agent who seemed to be the honest one of the three they had already met. Remember it was Jose Miguel who had offered in his brochure another villa for 25,000 Euros cheaper than his rival. He had gained their confidence and their respect.

Obviously they wanted to acquire the villa. It's perfect for their needs but John still wants to think about it whilst Janet has a touch of the sun and wants John to use his credit card! It's an interesting phenomenon when visitors from the UK and Northern parts of Europe come to the warm sunny climates of the Mediterranean; they lose all sense of reason and logic. Janet's natural character is quite formidable. She is normally a stoical and frugal soul with a sensible attitude towards life and especially money; although she would usually get her way with the purse strings John always makes that final considered decision. On this occasion however she has been in the Spanish sun for five days and caution is thrown to the wind. Likewise John, had also always been taught to be cautious, but now was reacting to the sunny day, blue sky and his Wife's enthusiasm.

Spanish estate agents are a curious lot. Some will grasp a client when they become enthusiastic about a property and insist on receiving a "Reserve". This is not a deposit, it is not subject to contract and is not returnable should the client decide against it or find they can't afford it. In most cases it acts to re-assure an owner and the agent that the client is a serious buyer. However it is not bound by any legal formality other than it reserves the property for a period of time to allow the client time to organize the deposit ahead of anyone else. It is unusual by UK practices and difficult for the first time buyer to understand, but it is common practice.

John knew from his head to the socks in his sandals that this was inappropriate behavior but it was his heart that was forcing the issue. Janet's enthusiasm for the project overwhelmed him, but just then he remembered something else he had read that morning on the internet from his Hotel room. Haggle. A sense of Englishness returned as a cloud hid the sun momentarily. Where was the fair play in this situation? So John made a bid, Janet almost fainted at the audacious behavior of her usually erstwhile Husband.

The property was advertised by Jose Miguel for 255,000 Euros. He did not disclose this until they had arrived as the budget he had been given by John was approximately 200,000. John's offer was for 225,000. John then went onto say that if the owner needed time to think about it that was fine as they were here for two weeks and they could come back next week! In this way John had played the salesman at his own game whilst risking losing the property to the other mysterious buyer. After all he could always improve his offer but he had also negated the effort to extort 6,000 Euros from him. Janet however was distraught and a little annoyed with John for making this dangerous maneuver.

However, it worked. The agent and the owner were silenced. The owner did not wish to lose the client so was determined to play for time. Just what John needed. However the shock of even offering 25,000 over his budget had not yet sunk in. How would he finance the projected overspend?

In Spain local mortgages, provided by local Banks like Banco Popular or Banco Andalusia as an example can offer very cheap mortgages secured on the valuation of the property, not the purchase price. The valuation will often be 70-80% of the purchase price especially if there are many commissions to pay and these will be included in the final price. The bank will give a non-resident 70% of this valuation. So John could expect to finance at least 50-60% of his purchase should he choose to, and at low Spanish rates. In this way he could easily finance the purchase and any local spending on typical improvements such as a new kitchen, a total electrical re-wire to EU standards or an upgrading of the garden and terrace. Don't forget that if you are retaining your UK home then a total re-furnishing is required, although in some cases some houses are sold inclusive of furniture.

It is also worth realizing that the cost of removing furniture from the UK to the new overseas home can be an equivalent cost to obtaining new furniture locally. Indeed, locally bought furniture and white goods maybe more suited to the property. Much of our UK furniture never quite fits into the smaller roomed Spanish houses and electrical goods are generally not suitable. Euro interest rates still remain at low levels as they have for several years. Typically Euro mortgage interest rates vary between 3.5 and 4.25%.

So it was back to the car and a return from a long day to Valencia to the Hotel and to a great Spanish dinner. Wait! Stop! How about looking around the area first? How far is the nearest beach? Where is the local supermarket, bank, post office, hospital? How far is the villa from the nearest airport which is serviced by a budget airline? Where are the best walks?

These are really important questions often overlooked by excited buyers. Once the euphoria of purchasing your dream home wears off you are left with the practical nature of life. Surprisingly you will find that the sun shines each day and there is almost always a blue sky. After a while you become accustomed to this and start to find out that you have bought a property, miles from any point of service!

If Janet and John were buying a house in England these considerations would be calculated before they even looked at the property. The sun sickness plays a big part in decision making in buying property overseas. Fortunately Janet and John lost their way returning to the motorway. John then had the brainwave of not admitting he was lost. What a surprise. (A bloke thing) Instead he told Janet that he wanted to drive around for a while and take a look at the surrounding area. Brilliant, clever John.

Well what do they decide? See tomorrow's installment when Janet and John are faced with more financial shenanigans

HugoRaymond@mypropertypal.com