Bank repossession properties for sale in Costa del Sol
Repossessed properties for sale in Costa del Sol
Mortgages in Spain are the most common form of financing if you want to invest in a property.
Buying a property in Spain requires this for most people, due to the high land and property prices. If you do not have the funds in your account to pay immediately, you will need to apply for a loan or credit, usually secured by a mortgage on the property purchased.
It cannot be recommended strongly enough. If you want to apply for a bank loan, be careful. Do not rush to the nearest and first bank. Before you decide, carefully compare the various offers on the financial market to assess what is best suited to your ability to pay and your needs.
Financing a repossessed property
We also have partnerships with various financial institutions and credit companies that we can refer you to. However, it should be noted that the vast majority of repossessed properties in Spain are carried out through the bank that has taken over the property, and therefore the bank in question is used to finance the property.
When you buy a repossessed property in Spain, in many cases you can obtain 100% financing for the property through the bank that has taken over the property. For 'normal' home purchases, the percentage is in most cases much lower.
If you want to compare financing options, an easy way to compare mortgages is by the annual percentage of a bank's earnings (Tasa Anual Equivalente TAE).
TAE is a summary of the price the bank charges when it lends money to the debtor, including interest, fees and other costs.
Of course, it is always useful to compare the total cost (interest, bank charges and costs) of each credit arrangement.
The many bank repossessions sales in Spain naturally make investing in land and property attractive. However, you need to be very careful about what you get into if you don't know the local conditions.
It is a good idea to ally yourself with a real estate agent and a lawyer you can trust in this regard.
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Compulsory auctions and sales on the Costa Del Sol
Unlike in other countries, the debtor (obligor) of the mortgage is liable for all its present and future assets. Defaulting on a mortgage therefore has far-reaching consequences.
The debtor loses his property in a civil foreclosure and virtually all other assets are seized. This includes deposits in bank accounts and all other assets belonging to the debtor as well as any guarantees.
Foreclosure and repayment of mortgages are governed by Spanish law ("Civil Code" under Articles 1175 and 1849).
If for any reason the debtor does not pay his instalments on land and real estate, the defaulted payments may be entered in the lists of defaults (ASNEF and/or RAI). This simultaneously prevents the debtor's access to future financing for a purchase or a new loan/priority loan.
In addition, attachment of wages, pensions or salaries is a legal measure aimed at ensuring the recovery of debts. However, under the new legislation adopted on 1 July 2011, there is an amount of €961 that cannot be seized.
This amount is based on the Spanish minimum wage. 30% of the amount is added for each family member who does not have a regular income.
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Before the bank starts the repossession process
In Spain, the repossession process ends with the house being taken over by the bank. The takeover starts when the debt is in arrears for several months and the debtor has not met his monthly obligations.
The repossession of the property by the bank follows a legal procedure which involves high costs for the debtor. Once legal proceedings have been initiated, the debt increases by a further 30% in terms of interest, legal costs and expenses.
Before this period, the repossession procedure from the bank is initiated; this is a good opportunity to negotiate directly with the owner about the purchase of the property, as it is assumed that the owner is interested in selling the house and saving as much as possible of his investment and credit.
The repossession process in Spain
Once the foreclosure process has started, before the "housing bubble" in Spain burst, it was common to organize auctions of seized property. During these auctions, anyone could bid for the property.
However, the problem after the collapse of the housing bubble was the lack of solvent buyers during these auctions.
This meant that market values were extremely low, not only because of the market collapse, but also so that debtors could pay off as much of their mortgage debt as possible.
As a result, banks in Spain started repossessing property. They opened the possibility for debtors to voluntarily surrender their property in case of default, which gave the debtor an incentive to offer his property to the creditor immediately to avoid having to start a costly legal process
Resale of property from a forced sale
If the bank takes over the house, they try to sell it as quickly as possible to avoid the ongoing costs of owning a property in Spain. The bank will often consider any reasonable offer.
Moreover, buying a house repossessed from the bank is the best way for an investor to get a loan with the most favourable terms. Banks look forward to getting rid of properties and are very open to assessing your offer.
However, it should be said that the shorter the time the property has been in the bank's possession, the higher the offer must be for the bank to accept it. Banks often have internal guidelines on how high bids can be made for their properties which they must follow.
As mentioned above, you should always be careful when buying a foreclosed property in Spain. When you apply for a loan, the bank usually becomes an ally, trying to check that everything is in order with the property you are buying. However, this does not apply in the case of foreclosed properties.
There may be hidden traps, such as land charges, unpaid local taxes, illegal residents or areas that are uninhabited or particularly bad for crime in the neighborhood, etc. It is a "must" that you inspect the property.
Address
Carril de la Cordobesa, 29, local
29003 Málaga
Contact us
+45 2623 9899
+34 602 611 591
info@costadelcasa.com
Opening hours
Monday - Friday: 9-18
Saturday - Sunday: Closed
Address
Carril de la Cordobesa, 29, local
29003 Málaga
Contact us
+45 2623 9899
+34 602 611 591
info@costadelcasa.com
Opening hours
Monday - Friday: 9-18
Saturday - Sunday: Closed
Tips on buying bank repossessions properties
Once you've found a property that interests you, it's worth remembering that bank repossessions properties after a forced sale are sold on a 'bought as seen' basis.
Craftsman offers can be good, but they are costly. Therefore, you should inspect the property to assess its physical condition and determine any repairs and costs.
Estate agents are a good idea when buying bank repossessions
Contact a real estate agent to get an idea of the prices of comparable properties in the area. This will help you determine how much your offer should be.
The fact that a property is a bank repossessions does not mean that the price is lower than for other properties in the same area. As we have sometimes seen, an overvalued price can save a seller from a loss.
Taxes and debts in a repossessed property
You need to do a thorough check of taxes and debts if you buy a repossessed property type. Most debts are recorded in the Spanish land registry.
However, be careful, there may be information about other debts that are not there. Again, it's a good idea to have a real estate agent and a lawyer on hand, when you are buying repossessed houses or other repossessed properties.
Spanish bank repossessions property type is you get what you buy/see. There is no going back and almost no responsibility taken by the spanish banks after the sale.
The bank again
When the bank is acting as seller, don't be blind to the fact that the bank has a host of lawyers who know all the laws in Spain and all the tricks that can turn the deal in the bank's favour. In addition to the estate agent, it is a good idea to hire a lawyer.
We have good relationships with several lawyers that we trust and can recommend.
The complexity of bank repossessions makes it necessary to hire a lawyer who is specialised and experienced in repossessed properties for sale in Spain.
Given the counterparty and the legal complications that may be associated with the acquired property, this is an additional "must".
The lawyer's fee is approximately 1-1.5% of the market price of the repossessed houses. This is nothing compared to the problems you may face on your own. The lawyer can also help with agreements with banks.