Guide To Home Repossessions in Spain

Nov 5
09:16

2008

Mark Eastwood

Mark Eastwood

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In common with many countries all around the world, the Spanish property market is suffering a major downturn and as a result many Spanish banks are repossessing properties. Put simply, a home repossession (or bank repossession) in Spain is a property where the owner has taken out a mortgage on the property and has not kept up with the agreed monthly payment to the lender (the bank) in which case the Spanish bank has seized or taken back the property (know as repossessing it).

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SPANISH BANK REPOSSESSIONS ARE INCREASING

Home repossessions in Spain are increasing rapidly due to the deteriorating economy while at the same time mortgage costs are rising as are the basic costs of living i.e. inflation is rising in Spain.

Electricity,Guide To Home Repossessions in Spain Articles gas, food and petrol prices have risen rapidly in Spain in the last year and so people with a mortgage on their Spanish property have found they have less money with which to make their mortgage payment to the bank.

Increases in the Spanish mortgage rates have also been considerable. Many people have bought property in Spain thinking low interest rates were here to stay. However the Euribor which most Spanish banks use to set their mortgage rates has been increasing as the European Central Bank seeks to keep a lid on inflation in the Eurozone.

Also unemployment has risen sharply in Spain. Many jobs in Spain are in the construction industry and many workers have been laid off.

Many repossessed properties in Spain are apartments. This is because many speculators put down a small deposit and expected to sell the apartment at a healthy profit when it was completed.

This worked for a long time but then suddenly the Spanish property market turned downwards and many buyers found the apartment was worth less than they what they had agreed to buy it for and so they either had to walk away and lose their deposit or try to keep up with the mortgage payments and try keep it going in the hope that over the long-term it would again rise in value.

But many of these property speculators in Spain have found they couldn't afford mortgages on two properties and so have had their apartments repossessed.

HOW TO FIND AND BUY HOME REPOSSESSIONS IN SPAIN

Many people looking to buy property in Spain are looking to find bank repossessions in Spain. This is because most Spanish property buyers associate the word repossession with cheap Spanish property or Spanish bargain property. In virtually every case they are correct - repossessions are often available at a deep discount to the true value of the property.

Of course every buyer in Spain wants to buy at below market value - so how do you find repossessions in Spain?

Spanish Property Auctions - Spanish banks and many private sellers who are facing repossession - and must sell - will as a last resort put their properties up for auction. Many bargain Spanish properties will be found at these auctions. However you can also find yourself picking up a bad property so be very careful and do your research. A very cheap Spanish repossession may be in need of lots of work, both structurally and cosmetically. Obviously these repossessed properties are unlikely to have been looked after and had money spent on them for a long time.

Repossessions Direct From Spanish Banks - This could be your best bet to grab a bargain property in Spain - to physically walk into a Spanish bank and talk to the manager. Many people are unaware of this but many Spanish bank branches are franchised out. This means that the manager has a great deal of control over the local activities. If he has repossessed properties on his account book then he will no doubt be keen to get them off the books. The only problem you face here is getting to the front of the queue ahead of the local Spanish businessmen. But now there are so many repossessions in Spain this is less of a problem.

Direct From Property Owners - If an owner of a property in Spain is falling behind with their mortgage payments then clearly they know they are in danger of having their house repossessed.

These owners are often referred to as distressed sellers. They therefore must sell and as keen sellers you will certainly get a bargain property if you negotiate correctly.

But how do you find these distressed sellers? Well it won't be obvious but when you are looking for property, look for private seller adverts in local newspapers, many of these sellers will be distressed sellers anxious to offload their property quickly before it goes down further in value or that they fall further behind in mortgage arrears.

Look for Spanish property with estate agents also and look for those properties advertised as price reduced or low priced for quick sale. Ask the estate agents too, they may well tell you which sellers are likely to accept offers well below the asking price.