Buying in Spain

Bank Repossessions In Spain

Spain property repossessions

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:
-Andalucía
-Catalonia
-Madrid
-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)
-Altamira
-Banca March
-Banco Primus
-Banco Cooperativo
-Bankinter
-BBVA
-BMN
-BNP Paribas
-CajaSur
-Casaktua
-CR Navarra – Ruralvia
-Escogecasa
-Haya.es
-Holapisos (La Caixa)
-Liberbank
-Ibercaja
-Servihabitat
-Solvia
-Unicaja

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.”

If you’d like some more information about the Spanish property market, there is a nice collection on Amazon and Google which covers the Spanish mainland and the islands.

The 10 Rules For Buying Property In Spain

Rules

If you have decided that you want to buy a property in Spain, you need to find as much information as possible to make the move as smooth as you can. When you buy property, you do not want to run into any surprises or additional costs. Fortunately, there are 10 rules that you need to know and use when you are buying property in Spain.

The Role Of The Real Estate Agent

In Spain, the estate agent’s job is to introduce a potential buyer to a seller. Once you have seen the property and are interested in buying it, you do not work through the agent. You will need to speak to an independent lawyer about the purchase and this must be done before you agree on the sale price.
Some Tenerife estate agents we spoke to make sure clients use an independent lawyer so that they are represented impartially during the entire process.

Why You Need A Lawyer To Represent You In The Purchase

When working with a Spanish estate agent, they may not tell you that you need to work with a lawyer to buy property in Spain. This will be true if you are Spanish and know how to make all the needed enquiries yourself. As a non-Spanish national, you will generally not have the linguistic skills or an understanding of Spanish business culture and practices which are very different to the UK. You would never think about buying a property in the UK without talking to a solicitor, so you should not do that in Spain.

Choosing The Lawyer For Your Spanish Purchase

When choosing a lawyer to represent you, you should look at their direct experience with Spanish property purchases. The fees should also not be extortionate, but you should never hire the cheapest lawyer that you find. You do not have to choose a lawyer who operates close to where the property is located as long as they have experience handling property purchases in the area.

Clarify The Total Costs Of The Purchase

You need to clarify the total costs of all transactions at the start. This will include the Notary fees, the purchase tax, the lawyer fees, the property registration fees and any additional expenses. Your lawyer should be able to advise you on these costs and you should not rely on the information from the estate agent. They are acting in the best interest of the sellers and not you.

Best estate agents for Tenerife can be found here.

Third-Party Funding For The Purchase

If you are going to be using third-party funding for the purchase, you need to be careful. You should not contemplate agreeing to a purchase until you are certain that you will be able to get the funding to cover the costs.

When You Pay A Deposit On The Property In Spain

You should not pay anything to the seller or the seller’s agent until you are completely sure that you are going to purchase the property. This means that your lawyer should have completed all of the proper enquiries and reported back to you about this. This will mean that you have to pay the lawyer a bit before you secure the property, but you will be in a much better position for the purchase when you do this. You can also delay the negotiation of the price until you have all of the results from your lawyer.

Getting A Surveyor For The Property Purchase

It is important to note that the property you want to buy needs to be surveyed by a professional who has the correct experience and qualifications. This is a very sensible thing to do, but you might find that some Spanish estate agents discourage this. Spanish people generally do not instruct surveyors to create a report unless there is an obvious problem with the property such as walls that are not straight or big cracks. However, you should still do this, but you need to know what to expect from the report that you get.

Find Out How The Development Is Run

If you are going to be buying a property with common areas such as pools and gardens, you need to ensure that your lawyer has the minutes of the last meeting of the Community of Property Owners. This will help you determine the extent the owners are actually paying the service charge for the development. You should not look at buying an apartment or house in a development where your service charge could be raised to compensate for other people not paying.

Find Out What The Annual Expenses Are Of Owning A Property In Spain

You need to know what the annual expenses of owning the property will be. This will include the property tax, the service charges, the non-resident income tax, water, gas and the wealth tax if applicable. You should not assume that all of the costs are going to be manageable and you need to ensure that you know what they are before you commit to the sale.

Ensure That You Know What Is Going On

If you have gone through everything with the sale and you are still not sure about certain points, you need to ask your lawyer to explain it to you. You should not assume anything and you have to fully understand everything. Once you have completed the purchase it will be too late for you to start asking about the points that you did not understand going in. If your lawyer is not able to explain everything to you, you might not want to use them.
A good estate agent will keep you informed and will explain everything that’s happening so that you fully understand what is going on and what you’re going to sign for.

 

Where To Buy Property In Spain

The lure of sea, sun and sand is always intoxicating, but beachfront properties tend to be quite expensive compared to properties inland. Interestingly, a 20-minute drive away from the coast should reveal plenty of apartments or houses with much better value and more outdoor space. These properties could be in small towns or villages, or in urbanised areas built to cater for foreigners and locals. Urbanisations or seaside complexes have community charges, so do apartment blocks. It is, therefore, advisable that you take a look at the terms and fees before committing to buy a property.

All along the Spanish coast are villas of different sizes and styles. In the North Eastern part of Spain, beachfront properties are still quite expensive despite a fall in property prices. Real estate here is mostly consisted of second homes, with most being used during summer months by their owners who often live in cities like Barcelona, Amsterdam, Frankfurt, Paris, London, and such. Apartments that are not used for up to 6 months of the year are usually aired by being thrown open to the sun and wind most weekends, especially around Easter. However, most are occupied by the first few weeks of summer. These homes are often rented to tourists as a way to get extra money to cater for mortgage and maintenance costs.

It is advisable to remember that property owners are now required by law to apply for licences to let their properties, which are sometimes, not approved. Therefore, consider asking your lawyer to follow up with your local town hall to find out if there are any policies that govern the letting of property to tourists.

In Barcelona, the city council, or the Generalitat, oversees the letting of property to tourists and is currently seeking to crack down on all illegally let properties following noise complaints by some of the locals. The council is also seeking to limit the number of properties let within certain areas of Barcelona.

If you’ve retired and are thinking of relocating to Spain, consider thinking of the facilities that you want near your property. While it is fun to buy a property on the side of a cliff with a beautiful view, however, it’s highly likely that such a home will have many steps to climb and will obviously be some distance from any shop. Considering all this, you’ll probably need a car to drive to the nearest amenities when you need anything. The same goes for apartments in small coastal towns where most of the shops close down when winter sets in. Larger coastal resorts tend to stay open throughout the year.

Not everyone loves the beachcomber’s lifestyle. Most people are attracted to the simple inland villages and towns steeped in history, and surrounded by vineyards. There are several urbanisations in Spain’s countryside, but there are also standard village houses made of either stone or white-coated Andalucia. Village properties tend to be cheaper than those in big towns unless the village is near or is a tourist attraction like Pals (Catalunya) or Mijas (Andalucia). However, some of these properties will require some renovation, and the maintenance and running costs tend to be quite high. Such properties are still quite popular, especially if the village has one or two bars, chemist, or shops since most of the things you’d need are within walking distance. Life in such areas is usually laid back and slow-paced.

If you are coming to Spain as an Expat, chances are you’ll be living in one of the country’s major cities or towns. If that’s the case, renting is the best option, well until you learn more about the area, found a school for your children, and have had time to shop for an excellent property to purchase. Rentals in Spain are quite expensive, especially around major centres like Barcelona and Madrid where in certain districts, the prices are starting to rise after the recession.

In recent days, there’s been a trend amongst older expats where they are selling beachfront apartments and villas and moving into the nearest towns so they can be closer to some of the amenities they need like shops, restaurants and bars to ease commuting. These villas and apartments are being bought by younger expats willing to on second homes away from their busy town lives. Statistics show that there is a shift towards homes near markets and shops. For instance, the newly opened Barcelona-Paris train route is already having a positive effect on property sales within reach of Figueres, Girona and Barcelona some of the stops on Spain’s side with the French border.

And let us not forget Spain’s mountainous regions. Winter sports like skiing are widely enjoyed here, as is bird-watching and hiking during summer months. The Pyrenees mountain ranges, the Sistema Central, Cordillera Cantabrica, Cordillera Subbetica, and the Sierra Morena offer attractive properties, with most being rentals. Homes around smarter, better-known resorts are predictably more expensive; however, there are plenty of little villages and towns that offer good value for money. If you ‘re contemplating buying a property in the areas, our advice is that you visit the region during both summer and winter that way, you won’t be surprised when it starts snowing and the roads get blocked.

Spain has plenty of great choices when it comes to property types and locations. As such, it shouldn’t be that hard to find a property that suits you and your family. It is just a matter of thinking about what you need, its proximity to shops or a town, the overheads and whether you don’t mind driving to the nearest amenities. Happy house hunting!

Before making a decision on where to go searching, take the time to think about the location you’d like to live and why but also make sure the estate agent is local and is well established. Here are some of the things to consider:

  • Do you have an idea of the area you’d prefer to buy property in Spain? Mallorca, Costa Brava, Costa del Sol?
  • Would you like living in the countryside, in a city, or on the coast?
  • Would you like to live in a residential development or in a tourist development?
  • How close to local amenities like shops and bars do you want to be?
  • Are there enough medical facilities and chemists around where you are considering?
  • Are there any essential amenities like schools and gyms nearby?
  • Do you need access to public transport?