Did you know the word ” crisis ” in Chinese means opportunity? For bank repossessions in Spain. As happened before in 2008, the property market is collapsing here. As a result the prices of properties are dropping, especially in this area, where people have holiday homes. Those who are suffering economic problems, one of the first things they cannot pay is the mortgage on their holiday home. As a result, eventually banks repossess properties.
Between 2009 and 2017, the property stock from banks was around 1 million homes.
In 2020, banks still have not been able to sell the stock they have had since the last crisis. As is evident when you look around many areas on the coast of the Costa Blanca and inland. Now they will get a lot more repossessed houses.
Banks need to sell houses quickly, and as a result they are now starting to reduce prices more than 50% of the market value.
Therefore, there is a really good opportunity now to buy houses in Costa Blanca at a very good price.
When you buy a repossessed house however, you have to be more cautious, because banks or vulture or hedge funds don´t care about your interests, only about the economic value to them.
There are 2 ways to buy a repossessed house:
Buying a bank repossession in a Public Auction can be a very good idea. This is because prices are even lower due to the fact that Banks want to sell
the properties as soon as possible. This is to avoid paying a lot of legal expenses and taxes. Otherwise, the Bank has to pay tax to obtain the property.
However, you have to be very careful because sometimes the properties have hidden debts or construction problems.
A solicitor is required to represent you in the Courts to bet in Public Auctions. That solicitor should be experienced in purchasing repossession problems and look after your interests in checking for the hidden debts or problems. If a property has a mortgage for example and this is not cancelled. Or a suma (council tax) debt, in Spain you could inherit this when you buy the property. You need to have proper representation and someone taking care of you.
After a Public Auction is finished (when repossession has gone to its final stage) banks or hedge funds become the owner of properties. Then you
are able to approach them to purchase bank repossessions. Prices are excellent but again you have to take care to avoid assuming hidden debts like council tax, community fees, water and electricity bills. This is something that can happen in Spain, although not in other countries like the UK.
You also have to check that the house has no construction problems and that all the services are connected (water, electricity, etc…).
Again this is the time you need a firm and lawyer experienced in conveyancing and buying a repossession in Spain. At Molina Solicitors we
can make all the necessary checks together with our architects. We protect your interests, stop any unpleasant surprises and we can negotiate with the bank or vulture/hedge fund on your behalf.
Please contact us if you are interested in purchasing bank repossesions in Spain and we will assist you.