Bank Repossessed Properties In Spain
With the recent economic crisis in Spain, many of our clients are looking for repossessed property in Spain. Whilst in theory, the idea of finding a repossession might sound easy, the reality is it is quite different.
When a property owner defaults on his mortgage commitments, the bank has to enter into a lengthy legal process to enforce the default terms that he signed in his mortgage agreement. The bank will have usually have no trouble in proving that the owner could not complete his payments, but it can take up to 2 years before the bank is in a position to offer the property for resale again.
During that period, the administration for the property has usually been transferred to the bank’s head office in one of Spain’s larger cities such as Madrid, Valencia or Barcelona. The bank will normally retain the keys and therefore, it becomes extremely difficult for real estate agents (see estate agents in Javea) to obtain information about the property.
When properties do become available for sale, the bargains are often cherry-picked by those with closer business relationships to the banks.
That is why bank repossessions are notoriously difficult to acquire and why few estate agents will have access to such properties. It is why we offer few, if any, properties like this on our website.
Why A Repossessed Property May Not Be A Bargain?
For those who do successfully manage to find repossessed property for sale in Spain, finding a bargain may be even more challenging.
Many repossessed properties and villas were originally purchased at the peak of the market, often at very high or inflated prices. In many cases, the banks were guilty of lending irresponsibly with unrealistic loan to value ratios. Now that the market has fallen, many banks find themselves in their own negative equity trap as they offer repossessed properties for sale at the level of the outstanding mortgage. Naturally, the banks want to recover what they lent against each property, but the sad reality is that many properties are no longer worth that amount.
This is not to say, of course, that the banks will not listen to sensible offers but you can be sure that they will be reluctant to consider a sale where their losses would be substantial.
Many banks now have extremely large inventories of either unsold or repossessed properties. It is a problem that in an ideal world no bank would like. Properties are slowly selling, however, especially as some banks have started their affiliated real estate arms to market their stock of properties. This is yet another reason why most estate agents will not be able to offer you the bargain property you are looking for.
A Better Strategy
Unless you speak good Spanish, it is normally a struggle for independent property buyers to unearth bargain bank repossessions.
We recommend that, rather than pursue this strategy, it is better to build good relationships with local real estate agents in Javea in order to ascertain which vendors are so desperate to sell, you can take advantage of a bargain price before the banks move in. We have seen some vendors accept unbelievable offers sometimes simply to escape from what could become a serious credit-rating threatening problem.
We cannot for obvious reasons publish this information, so please contact us to find out which vendors are currently open to decent offers.