‘Unsellable’ Negative Equity Property In Murcia
30 November 2022 • 2 min read • by Tom Miskelly
A retired couple owned 2 Bedroom Apartment on the Corvera Golf & Country Club development in Murcia. Due to social issues on the development, the decline in property prices and the sheer volume of units for sale, the valuation sat at €35,000.
The couple’s outstanding mortgage was €90,000, and the property was costing €1,000 per month when taking into account mortgage payments, community fees and IBI Taxes.
This was combined with declining rental income and the fact the couple never actually visited the development for a holiday. As a result, they wished to offload the property but felt trapped by negative equity. In fact, they had been told at one point that they could not sell because of negative equity.
What was at risk?
- UK home and assets in the UK that were at risk if they stopped paying their mortgage and fees
- Mostly, the fact that they were spending €1,000 per month for a property that they did not want and couldn’t afford
What we did
- We secured a surrender of the property to the Bank and a complete write-off of the €90,000 mortgage
- The couple ceased payments during the process, which saved them €1,000 per month
- Our client avoided expensive sales costs in Spain (these can be 10-12%)
- One quarter’s IBI tax and Community Fee Arrears were included in the settlement.
- The couple’s UK assets were protected.
Needless to say, our clients were delighted. When they came to us, they didn’t think they could sell the property at all. They expressed how surprised they were that we managed to get rid of the property and write off their debt!
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