Bank Repossessions In Spain
An Overview of the Repossession Situation
Even though the crisis in Spain is long gone, several thousand repossessed properties still exist in 2018. For anyone looking to buy a property, a repossessed property is quite attractive since it is considered a steal of a deal and are sold at huge discounts.
Research conducted on the Spanish Registry has shown that the first quarter of 2017 produced around 8758 repossessions, and the total number of repossessions decreased by 23% in the second quarter totalling to 6744. In addition, these figures were compared to that of the second quarter of 2016 and a reduction in repossessions was seen as -41.20%.
The following regions of Spain experienced the most repossessions in 2017:
-Valencia (Costa Blanca area)
Advantages And Disadvantages Of Buying A Repossessed Property In Spain
The first main advantage any buyer can look forward to is the low mortgage rate when properties are bought directly from the bank, and they can also arrange financing for even up to 100%. It should be noted that when purchasing properties from the bank, some properties aren’t in a proper condition and they even come with outstanding debts, so be sure to exercise due diligence and have a solicitor check the property for you.
Repossessed properties are often left in terrible conditions by their previous owners. We have seen several cases where the electric cables were cut off and even several fittings and fixtures were torn out as well as broken windows and both ceilings and walls destroyed.
Any repossessed property can be sold for its original outstanding debt, however, banks tend to make the best of the situation and sell at prices which are profitable for them of course. With that said, it should also be known that various Spanish banks are indeed flexible when it comes to pricing and receiving bids, whereas other Spanish banks tend to keep their prices fixed.
In addition, some banks change their policies from time to time and make the necessary arrangements in order to sell their portfolio in a given period of time. The acquisition of Banco Popular by Banco Santander illustrates this and was carried out in June of 2017 where they partnered with American multinational, Blackstone as they planned to sell over 30 billion euros worth of property from Banco Popular’s assets.
In times of crisis, trying to bargain with a bank is easier compered to when the market is stable. As of 2018, getting a bargain is solely dependent on the banks financial position as well as their need to quickly sell assets which are wrapped up in properties.
When buyers negotiate with the bank, they basically demand a specific property, and in the case where there are many other interested buyers, you may not always stand a good chance to get it for the price you offer.
Third parties such as real estate agencies are widely utilised when it comes to marketing and viewing the property for sale by the Spanish banks. However, they typically pay their real estate agents 2% if they find suitable buyers for their listed properties. In addition, the commission offered to them is generally much lower than that of selling other standard properties within Spain.
Properties are normally seized by banks when there is failure by the original owners to pay their mortgage instalments every month. When there’s a case of non-payment, banks require the debtor to cover late payment interest and notifications and even other operations which are seen fit by the bank due to an initial issue of non-payment.
Branch managers have all the relevant information on the latest repossessed properties and soon to be seized properties, so if you’re looking to buy a property in Spain, ensure that you have the required Spanish bank account and a working relationship with either the branch manager or even some of the employees of your branch. In addition, both managers and employees are a direct line of contact with the banks initial headquarters when it comes to submitting your bids, but please remember that this can also be done through a normal property agent.
Typically, real estate agents aren’t always aware of the various problems that a property might have, so be sure to do your own checks both legally as well as physically on the building. It might also be a good idea to take an architect along for viewing to determine any flaws which may exist before your actually purchase a repossessed property.
Since not all the repossessed properties are available online, you should check with your branch of your Spanish bank to enquire about their new offers and have them alert you should anything interesting come up.
Online Websites For Repossessed Properties In Spain
-Aliseda Inmobiliaria (Banco Popular)
-CR Navarra – Ruralvia
-Holapisos (La Caixa)
In addition to those mentioned above, you can also check SAREB which generally includes a grouping for most of the websites mentioned above.
National Property Auctions Website
Along with other online resources, there is also an official auction site for Spain, but it has only been made available in Spanish. The site is widely known as “Portal de subastas BOE.” If you are indeed looking for property auctions, you can visit https://subastas.boe.es/subastas_ava.php, and do an advanced search where you can select your desired province from the drop-down menu “inmuebles.”