Practical case Mallorca: Family house in Alcúdia – When the sale of the previous property is part of the financing
Both spouses had secure incomes and a debt-free property in Germany. Its market value was significantly above the equity still needed for the purchase on Mallorca.
At a glance
- Purchase price: 695.000 €
- Renovation: 35.000 €
- Financing required: 487.000 €
Anonymised case figure · not a binding statement for other projects · §34i GewO
Sell first or buy first?
A family from Baden-Württemberg wanted to move their centre of life permanently to Mallorca. The two children were already adults, so the wish for a quieter life by the sea became more concrete. They were looking for a detached house in Alcúdia – with a garden, a pool and enough room for visits from family and friends.
A suitable property was found quickly. However, part of the equity was still tied up in their home in Germany, which was only to be sold after the move.
Initial situation
Both spouses had secure incomes and a debt-free property in Germany. Its market value was significantly above the equity still needed for the purchase on Mallorca.
As the sale was to take place only some months later, however, the financing had to bridge this period sensibly.
Financing overview
- Purchase price: 695.000 €
- Additional costs: 90.350 €
- Renovation: 35.000 €
- Total investment: 820.350 €
- Equity at purchase: 333.350 €
- Financing required: 487.000 €
The financing share corresponded to around 70 % of the purchase price.
The challenge
The biggest challenge lay not in the creditworthiness but in the timing. The family wanted to buy the house on Mallorca before the home in Germany was sold. At the same time, losing the desired property due to the still-outstanding sale was to be avoided.
The planned modernisation too – new air-conditioning units, energy improvements and the renewal of the kitchen – was to be implemented immediately after the transfer of ownership.
Analysis
First the expected sale proceeds of the German property were realistically assessed and the entire timing was planned.
The purchase price, additional costs and all modernisation costs were then considered together. This created a complete overview of the actual capital requirement already before the contract was concluded.
Decisive was that enough own funds were available for the additional costs and part of the purchase price, while the later sale proceeds were to additionally strengthen the long-term asset planning.
Financing solution
The financing was built at around 70 % of the purchase price.
The additional costs and part of the purchase price were paid from existing equity.
The modernisation costs were fully included in the overall planning from the start, so the work could begin immediately after handover.
After the later sale of the German property, additional equity was available that could be used flexibly for reserves or a partial repayment of the financing.
Outcome
The family did not have to rush the sale of their house in Germany and could at the same time secure their desired property in Alcúdia.
Once the modernisation was complete, the house matched their own ideas exactly. A few months later, the permanent move to Mallorca took place without financial time pressure.
What other buyers can learn
Many buyers already own a property in their home country. This does not have to delay the acquisition of a property in Spain. Decisive is careful planning of the timing and a realistic assessment of the available equity and later liquidity.
Frequently asked questions
Does the previous property have to be sold before buying in Spain?
Why should modernisation costs be taken into account immediately?
Is a high property value in Germany an advantage?
Conclusion
Acquiring a detached house in Alcúdia shows that property financing often comprises more than the purchase price alone. Anyone who coordinates the sale of an existing property, the use of equity and necessary modernisation early can shape the move to Mallorca much more calmly.
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To the case report →A similar situation in Spanien? Let's talk.
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Book a free consultationAnonymised individual case, not a binding statement for other projects · Siegfried Perini, BAFA-notified for the cross-border activity of the owner Olga Nikushkina · §34i GewO · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank