Buying Repossessed Property in Spain – Is it Really That Good?

Are you looking for information about buying repossessed property in Spain? Read on to find out the truth, everything you need to know and whether or not it is still worth it?

Spanish Bank Repossessions: the History

In the late part of the 20th Century, if you were to search for places to buy in Spain you would likely have had less choice than you would now. Spanish homes for sale were not being built fast enough to meet demand. The ease of air travel, the short flight and of course the low cost of flying along with the perfect Mediterranean climate meant more and more foreigners were buying property in Spain.

However, in 2008, the world was hit by a financial crisis. This included Spain and people literally became bankrupt overnight. The Spanish property market suffered considerably and building stopped overnight. The crisis left thousands of properties in Spain empty and abandoned.

The financial crisis of course had consequences which meant that Spanish interest rates rose dramatically leaving many foreigners unable to keep up mortgage repayments on their holiday homes in Spain. Many of these homeowners were experiencing the same situation at home. This dreadful situation left many homeowners in a state of negative equity. Millions of buyers decided to abandon their holiday homes having no other choice which lead to the banks repossessing them. This left thousands of Spanish repossessions direct from banks empty and abandoned.

By 2015, average prices of property in Spain had decreased by as much as a massive 65%. However with the economy improving, demand for property in Spain began to rise and banks therefore began to sell the repossessed property in Spain they had acquired in order to begin making back what they had lost themselves. As well as being able to purchase Spanish repossessions direct from banks, building of new build properties in Spain also started up once again.

This leads us on to the question, “buying repossessed property in Spain, is it really that good?”

Pros and Cons of Buying Repossessed Property in Spain

There are of course both pros and cons of buying repossessed property in Spain. Your personal circumstances will contribute to the decision of whether or not it is the right thing for you to do or not.

PRO – You are often able to purchase a repossessed property in Spain using 100% finance. This means not having to worry about having a large deposit ready in cash.

PRO – As you are purchasing the Spanish repossessions direct from banks you may find they offer you better interest rates than other lenders would for the same property.

PRO – Depending on the bank you may find they are flexible when it comes to price and accepting offers lower than the original asking price. This will usually depend on the state of the bank at the time and how quickly they may want the repossessed property sold.

CON – Purchasing a repossessed property in Spain directly from the bank means it is possible it has debt attached to it.

CON – Unfortunately when buying repossessed property in Spain they are not always left in the best condition. If you search for “repossessed properties in Spain” you will likely find images of bank repossession properties that have essentially been abandoned. Generally, the bank sell the property in the condition they found it in. It has been known in the past for gas to have been disconnected, wires to have been cut and so on. If you decide buying repossessed property in Spain is for you, it is well worth paying someone to give the property a thorough checking over before finalising the purchase.

CON – When buying repossessed property in Spain direct from banks they may not know everything about the property. You may have to carry out legal and property checks yourself at a cost.

If you decide to begin looking for bank repossessed properties in Spain, you may not be able to find all available repossessed properties online. They can be harder to find and you may have to check directly with the banks what they have available. Once you have spoken to them they may then be able to alert you if any more repossessed properties in Spain become available.

New Build Property Vs Spanish Repossessions Direct from Banks

In order to answer the question “repossessed properties in Spain. Is it really that good?”, it is a good idea to compare the pros and cons with those of new build properties in Spain.

With the Spanish property market booming once again you will find a large selection of available new build properties in Spain to include apartments, townhouses and villas.

The biggest advantage of a new build property in Spain is the obvious; that it is new. No one has lived in it before to be able to leave it in such a bad condition. You can guarantee the electrics, plumbing and so on will be new and fully functioning.

Building regulations for new build property in Spain have changed significantly over the years. Spanish properties are now built to much higher standards than they used to be with better quality materials.

This leads us to another massive positive of purchasing a new build property in Spain over a bank repossession property; the Seguro Decenal. This a 10 year warranty which all residential new build properties in Spain must come with as per Article 1591 of the Spanish Civil Code and statute 38/1999 of Spain’s Building Act. The Seguro Decenal covers structural faults such as the retaining walls and foundations and will be given as an insurance policy from a third party property insurer. This is certainly a financial advantage of purchasing new build properties in Spain and gives buyers peace of mind.

To finance new build properties in Spain, you will need a cash deposit. You will not be able to purchase the property using 100% finance. You are also unable to negotiate on the asking price of any new build property in Spain. The price of the property is set by the builder. You are unable to barter with them and the price will be the same which ever Spanish estate agent you use. As we mentioned above, this is not the case when buying Spanish repossessions direct from banks and you may be able to barter.

If you opt to go down the route of new build property rather than repossessed property in Spain, you are likely to have a much larger selection to view and choose from. Spanish repossessions direct from banks are limited in numbers and availability will decrease over time as they sell. The Spanish property market is booming and is attractive for those wanting a new life in the sun and those wanting new build investments in Spain. More and more new developments are being built on the beautiful Spanish Costas. You can get a huge amount for your money in Spain compared to many other countries and all in a perfect all year round Mediterranean climate. What more could you ask for?

Movehappy

Movehappy specialise in repossessed properties for sale in Spain and our extensive portfolio includes new, off plan and key ready properties. Whether you are looking for apartments or villas to buy in Spain we have something perfect available for everyone.

All of our new build properties come complete with our Movehappy package saving you up to €18,000 and with a complete after sales service there is simply no easier way to purchase your new property in Spain.

If you have any questions about buying repossessed property in Spain, new build properties, or anything else at all please do not hesitate to contact us. We are always here to help.

Testimonial

As exciting as it was to begin looking at properties in Spain, I was also filled with dread at the thought of having to go through an estate agent. Pushy salesmen have always been a ‘pet hate’ of mine. For this reason as well as many others I am delighted I chose Movehappy to deal with my purchase in Torrevieja. At no point did I feel that I was being pressured in the slightest. For me, this was incredibly important.

My sale was dealt with in a professional, timely and friendly manner throughout. I hope to do business with you again in the future.

Timothy Chand, Brighton, UK