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The Government wants Russian tourists to be able to enter Spain without a Visa |
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Spanish Real Estate News & Lifestyle |
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How to bag a Spanish Property Bargain
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Dos and Donts on Purchasing a Bank Repossession in Spain
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Its not often that you see a Boxing Day sale-style stampede when a property goes on the market, but it is happening in some parts of Spain.
Spanish Banks are offloading some of their €176 billion (£145.4 billion) worth of troubled property assets, including repossessed properties and bad debts to bankrupt developers, at such discounted prices – and with the promise of 100 percent mortgages over 40 years – that young Spaniards, who are the hardest hit by unemployment in Europe, are seizing their chance to become homeowners.
Many of these bank-owned properties will be of little interest to Brits looking for a getaway in the Spanish sun.
One recent frenzy, for example, was for two-bedroom flats in a Madrid suburb, discounted by 50 per cent to £54,000.
But there are thousands of cut-price properties on the coast that will suit holiday home buyers down to the ground – if only they can find a way of dealing with the Spanish banks, who have 328,687 repossessions to sell, according to the Spanish National Statistics Institute.
Spanish banks may be the countrys biggest estate agents now, but they arent well versed in marketing properties, especially not to foreigners who probably dont speak Spanish.
“Spanish banks have also become very picky about who they deal with, as they are worried about getting ripped off by unscrupulous agents,”.
“They wont even talk to individuals. Some of the banks we deal with have 11,000 plus properties on their books across Spain, so where would your average buyer start if they turned up at one local branch?”
Bear in mind, too, that a bank probably only has the property because the owner could not sell it. “Its unlikely that the bank will have prime-located properties or anyone sensible for overseas buyers to talk to.”
“The bank isnt there to do you any favours. They are just looking for the best deal for themselves, and its suspected that the best properties are cherry-picked by preferred buyers, such as their employees, before they go on to the wider market. So the buyer has to be prudent and look after themselves.”
So where can buyers find help in looking for a Spanish bargain?
To spare buyers the stress of trying to deal with banks themselves, there are plenty of agents offering to do it for you. Beware all the opportunists who know nothing and will try to flog you anything. You can tell pretty quickly from their websites whether they have spent more than five minutes building their business.
And pick your properties carefully. Much of Spains southern and eastern coastline is awash with discounted properties, and prices can look almost giveaway (mainly because developers really cant give them away).
Murcia has a huge amount of unsold stock you wouldnt want to touch with a barge pole – notably its golf resorts left half-built on remote scrubland – but it will also be home to the Paramount theme park in Alhama de Murcia, which has just been given the go-ahead, so investors are optimistic about rental returns for properties in the region and in neighbouring Almería.
“One investor is buying there on the basis that he can currently expect a 6 per cent rental return, covering all his costs, and he estimates an 18 per cent return once the park is built and he can get 30 weeks booking a year”
“I always think: Would I sell this to my sister? The banks are often annoyed that Im not marketing more of their properties, but many just arent appealing to investors, who typically want somewhere on the coast they can use themselves and rent out.”
Repossessed villas are more unusual, but we have some luxury four-bedroom villas with private pools in Marbella, near La Zagaleta, that were built a few years ago, valued at £1,000,000, but buyers failed to complete. They are now available for £720,000.
We also offer British buyers access to Spanish bank-owned properties, through our partnership with several Spanish bank which have about 20,000 repossessed properties.
“We are dealing with over 1,000 of them, mainly on or near the southern Spanish coast, where demand for luxury holiday homes is highest. In Mijas, Benalmadena and Estepona, we tend to sell small holiday apartments, but we also sell some larger villas in towns such as Marbella, Benahavis and Sotogrande, where properties on distressed golf developments,” says Fernando Garces, Xcape to the Sun Managing Director.
"Our estate agency launched its Spanish Bank Properties offering at a difficult time, July 2010, and some banks have been on the brink, and were recently rescued by a bigger banks. But Xcape to the Sun saw over 1,000 enquiries for Spanish properties last years – mainly from British, Russian and Scandinavian buyers – with properties discounted by 50 per cent on average and sales typically taking up to three months to complete."
“If an offer is made at web price, the buyer signs an offer form with no deposit required. Once the offer is accepted, a private purchase contract is signed within seven days and a 10 percent deposit is paid,”.
If an offer below web price is accepted, some banks advertise the property at that price on an online auction website for a few days. “Anyone can bid within that period with a minimum increment of €3,000 (£2,500) on each offer. Once the auction has ended and the buyer identified, the purchase process continues as normal,” he adds.
Spanish banks can also offer up to 107 percent mortgages for UK residents, with interest rates of 2 per cent above Euribor.
DOS AND DONTS OF BUYING BANK-OWNED STOCK
DO:
-Visit properties you are interested in and get a thorough idea of the resort/development/area. Who is buying there? Who rents properties there? Are there hundreds of unsold properties sitting empty? Do you really want to own there, if so, no matter how cheap?
-Speak to several agents dealing with repossessions. You will soon get an idea of how much they know their field and whether their advice is reliable.
-Get a lawyer to investigate thoroughly if the property has any debts. You shouldnt inherit any utility debts through a bank-owned property, but, if the bank has too many properties to keep tabs on, some debts may get overlooked and the buyer becomes burdened with them.
-Check all community fees and property taxes have been paid before you buy.
DONT:
-Approach banks yourself. They have thousands of properties on offer, but no effective means of dealing directly with foreign buyers – especially if you dont speak Spanish.
-Be led by what others tell you is a good bargain. See for yourself. Agents may have another agenda, pushing properties that the bank is telling them to. They may be wholly unsuitable as holiday homes, though, in dreary city suburbs and nowhere near the coast.
-Assume bank-owned properties offer the best value. There are so many discounted properties in Spain, you are likely to find better value through estate agents or auctions.
-Rush. The economic situation in Spain isnt changing any time soon.
It is straightforward to buy Spanish repossessed property with Xcape to the Sun and we help you through the process. Our bank repossession properties are located all over Spain, though our main focus and the international investors focus is on Marbella, Costa del Sol. We have developer repossessions from several Spanish banks.
As this offers are constantly changing, please register to receive them directly on your inbox or please fill the form on contact Us or give us a call on 0034 629 527 834 with your specifications Now!
We look forward to helping you to reap the benefits on the Spanish Bank Repossessions!
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