All you need to know about Spanish Bank Repossessions

Robbert DekkeronLeave a Comment on All you need to know about Spanish Bank Repossessions
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There are thousands of repossessed properties in Spain.

During the last property crisis, we saw a high number of properties being repossessed. Now with the COVID-19 we are starting to see again an increase in bank repossessed properties.

Properties are normally seized by the bank when the owner fails to pay his monthly mortgage installments. In case of non-payment, the bank will take ownership and in some cases will require the debtor to also cover the expenses for overdue interest payments, notifications, as well as other operations that the bank incurred as a result of non-payment.

The prospect of buying a bank repossessed property is an attractive thought because these are often good deals and are sold at bottom prices.

Advantages and disadvantages of buying a repossessed property in Spain

One of the main advantages of buying a property in Spain directly from the bank is the low mortgage interest rate and the possibility to arrange finance for up to a 100%.

However, you should be careful when buying a bank-owned property since in many cases these properties are not in good condition and may have also outstanding debts.

TIP: Make sure you do a due diligence check of the property and/or have a solicitor help you out.

Owners whose properties have been repossessed often leave their former house in a terrible state.

I have personally encountered houses with electricity cables cut off, washbasin and fittings ripped out, windows and frames were broken and walls and ceilings destroyed.

Repossessed homes can be sold for the outstanding debt, but in most cases, banks want to get the most out of it and sell them at the price that suits them best.

Some Spanish banks are more flexible than others in terms of pricing and receiving bids from interested parties, while other Spanish banks maintain more of a fixed price for their portfolio.

Some banks may also change their policies, by making arrangements to sell their portfolio within a certain time period.

During crisis times, bargaining with the banks is much easier. The bargaining position when buying a property from the bank much depends on the situation the bank is in and their urge to get rid of their property assets.

Also important when negotiating with the bank is the demand for a specific property. If there are many potential buyers interested in the property you may not have a strong negotiating position.

For property viewings and marketing, Spanish banks often use the services of third parties and estate agencies. Spanish Banks usually pay these estate agents a fixed fee of around 2% (depending on the bank) if they manage to find a suitable buyer for their property. This commission percentage if often much less compared to selling through a mainstream agent in Spain.

Branch managers know who is failing to comply their mortgage payments and have access to information about the newest homes that have been repossessed or are soon to be seized.

TIP: If you buy a house in Spain through the bank, make sure you have a Spanish bank account and you have a good relationship with the branch manager.

TIP: Not all repossessed properties are online. Check with your Spanish branch to see if they have any new offers and let them tip you off should and interesting property emerge.

Branch managers and bank employees have direct contact with the bank´s headquarters for submitting bids but in some cases, bids are also submitted through the estate agent, like Haya Inmobiliaria.

Banks and estate agents are not always aware of the deficiencies a property might have, so make sure before placing your bid that you have done the necessary legal and building checks.

TIP: Make sure to you bring with you a builder or architect to check for any major construction flaws and deficiencies before buying a repossessed property.

Where to find repossessed properties in Spain online

Bank websites offering repossessed properties in Spain

You can also check the Spanish bad bank, called SAREB, which groups listings from many of the websites above.

National property auctions website

There is an official national auction site in Spain, however, it is only available in Spanish. It is called “Portal de subastas BOE“

To search for property actions, you can best go directly to the advanced search option available on https://subastas.boe.es/subastas_ava.php, and click on “inmuebles” to specifically search for property. Then choose a province from the drop-down.

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