Repossessed Property for Sale in Spain
Spain’s property market continues to be one of the strongest across Europe thanks to expats and locals buying homes. Unfortunately, not all property owners are able to make their mortgage payments which lead to repossessed properties for sale across Spain. There is definitely bargain properties for sale in Spain, but you need to know where to look. Withe right advice and buyers agent you can find cheap Spanish property repossessions and you can bag a great property at a great price. Before you to, there are some things to consider.
What is a repossessed property for sale in Spain?
A distressed sale occurs when a stock, property, or other purchasable asset must be sold quickly. A distressed property sale typically results in a monetary loss to the seller. The property is put up for sale due to economic issues incurred by the owner and the property must be sold for a lower price.
The money made from the sale is often used to pay off debts, medical expenses, or is used for other emergencies. If you want to purchase a cheap Spanish property repossession, you should note that the property may be in a poor state of repair. Due to circumstances, the owner may not have been able to pay for the needed repairs and upkeep on the property.
Sometimes the property may be a Spanish bank repossession, but this is not always the case. Often better value property will need to be offloaded by a seller quickly in order to raise finance for other reasons and these reasons may not always be financial trouble. With luxury homes and apartments owners may be relocating, or raising money for a business venture.
Lots of distressed property for sale in Spain does not even get as far as full on bank repossession. The award-winning Physis Realty often work with motivated sellers with repossessed property for sale in Spain.
How does a repossessed property for sale in Spain work?
Property owners who can no longer pay off their mortgage may choose to sell their home, apartment, or commercial property. A distressed property sale often occurs due to foreclosures, divorces, or relocations. By selling the property, the owner is able to pay off their mortgage.
If you plan to purchase a distressed property, you are likely to buy it at a price that is below the current market value. You should keep in mind that there are drawbacks to purchasing a distressed Spanish property. If the sale was done on short notice or in a hurry, repairs to the property may not have been properly carried out – or completed at all.
You may be able to purchase repossessed property for sale in Spain, but keep in mind, you may need to put additional money into the home to repair the bargain property.
Bank repossessions Spain
When dealing with bank repossessions of sale in Spain its important to remember the banks want to maximize their revenue. Ideally they want the property removed from their overall balance sheet so they are unlikely to simply ‘allow’ a new owner to take over the mortgage payments without some significant capital injection against the outstanding mortgage.
Most Spanish banks will tell you they are unable to allow you to take over an existing mortgage although with the right bank connections it is still possible in certain circumstances.
Taking over someone else's mortgage in Spain
Even though the major Spanish banks will usually tell you this is not possible, it is legal and common place for a legally binding side agreement direct with vendors to be drawn up, allowing you to take over the mortgage payments of a highly motivated seller of distressed Spanish property in the Costa del Sol, Ibiza and Barcelona areas.
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What are the advantages and disadvantages of buying a repossessed property for sale in Spain?
The biggest advantage to buying a repossessed property for sale in Spain is that it comes directly from the bank. You will receive a lower mortgage interest rate from the bank with the purchase. In addition, there is a possibility of receiving up to 100% financing.
Once again, keep in mind that the property could be in poor condition. There may also be outstanding debts on the home that you must pay off. If you do plan to purchase a distressed property, do your due diligence on the home. A solicitor will be able to help you do your research on the property.
Repossessed Spanish homes may be sold to cover the owner’s outstanding debt. However, in many cases, the bank selling the property wants to receive the most out of it. The bank will sell the home at a price that suits it.
You may work with a bank that is flexible in its pricing, but there are some Spanish banks that sell distressed homes for a fixed price. If Spain experiences a financial downturn, you may be able to get the property for much less. Negotiations on a distressed property depend on the bank’s situation. The bank’s need to sell the property and recoup money will affect your ability to negotiate the price of the property. The number of potential buyers for a distressed property also affects the ability to negotiate the price.
How is a repossessed property in Spain sold?
Banks that repossess Spanish properties typically use third-party companies to advertise and sell the homes. An estate agent may receive around 2% for selling the property. The commission is typically less compared to selling through Spain’s mainstream real estate agents.
Real estate agents and banks do not always know about the shape a property is in. You need to review the property before placing a bid on it. Ensure you have done the correct building and legal checks before bidding on the home. It is a good idea to have a builder or architect inspect the property when you view it.