A bank repossessed property in Spain

The answers on the Frequently Asked Questions on “How to buy a Bank Repo in Spain” but realize this.

As the property has been Repossessed, we never know the condition it will be in until we enter the property.The photographs may not correspond to the current state of the property.

What is a “bank repossessed Property” in Spain ?

  • This is the general term used to describe properties which have ended up in the hands of the bank due to non-payment of the loans associated with the property. They are homes whose new owner is the bank.

Is it safe to buy a bank repossessed property ?

  • Legally there is no problem. The bank representative will sign the deed of sale in favour of the buyers.

Could there be outstanding debts on the property ?

  • No. The loan originally taken out on the property has been cancelled and the property should appear as free of charges in the property registry. If there are any doubts regarding payments due to the homeowners’ association or the Council (IBI tax) these should be paid by the banking institution before the deed of sale is signed. Outstanding water and electricity payments that may have been left by the previous owners are irrelevant, as in any case a new contract is made with the supply company.

Do these properties benefit from any special mortgage conditions ?

  • Yes. All the banks make special offers for the purchase of their properties. Some finance a very high percentage of the value of the house and also offer better interest rate conditions. They are usually more flexible in their analysis of the buyers’ documentation than in the case of a mortgage for a property not owned by the bank.

Do bank repo property have water and electricity supply ?

  • In general, no. They have been unoccupied for some months and the supplies will have been disconnected. To reconnect the supply a new contract will have to be taken out with the corresponding companies. These contracts may require additional documentation which the banking institution is not obliged to supply and which may involve an additional cost. Depending on the age of the property, on how long the supplies have been disconnected and on the particular rules of the Council in question, different documents will be requested such as, for example: official certificate of installations, second occupancy licence, technician’s certificate, etc.

What condition are the properties in ?

  • They differ greatly. In general they all (except new builds) require some aesthetic repair. You should bear in mind that their previous owners lost the home and had to give it up, and in some cases items such as internal doors, bathroom fittings and taps may be missing.

Will the bank make any repairs on the property ?

  • No. The banks’ policy is to liquidate their existing real estate stock and in most cases this consists of establishing a minimum price which excludes any maintenance or repairs being carried out by the bank.

Do I have any guarantee against any defects I find ?

  • The fact is that you don’t. The properties are sold “as seen” in the condition in which they are found and the bank is not responsible for any damage there may be to the property.

Are they cheaper than other similar properties which are not repossession homes ?

  • Without doubt. However, you must also take their condition into account. When you go to view repossessed properties you should know what to expect. You need to be able to imagine the house clean and repaired of any small imperfections. However, the investment required in some cases may be profitable for the buyers.

Why are there so many bank repossessed properties in Spain ?

  • During the years of Spain’s strong growth lending grew enormously and a lot of houses were built. For some time now the financial crisis and the increase in unemployment have meant that many individuals and developers have been unable to meet payment of their loans and the bank has had to exercise the guarantees associated with these loans.

Do the banks accept underbids on their properties ?

  • Only occasionally. For some months now all banks, under pressure from the Bank of Spain, are applying a minimum price policy in order to sell their portfolio of properties as quickly as possible.

Look at our bank repossessed properties

Contact us for more information about our bank repossessed properties in Spain.

Red Rose Property Spain
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Red Rose Property Spain, bank repossessed properties.

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