Distressed Property In Spain

When buying distressed property in Spain there is a small time span that allows potential buyers to buy this property at the lowest price possible. Presently the opportunity to do this is kept to a small handful of involved parties ranging from bank staff in the know and the auctioneers that hold property auctions on behalf of the courts.

At auction all property has a minimum level that it can be sold at. This is dictated by the actionable value as specified on the Nota Simple when a loan is set up. If the property does not sell at auction for this minimum amount, the bank then has to take over the property in its entirety. This means the bank must pay 7% transfer tax, pay off any outstanding IBI or community charges and then maintain the property and its normal running costs relating to both the above until they sell it.

The legal costs after auction in order for the bank to take property over also add to the banks woes.

Where the canny buyer dips in is in-between property not selling at auction and the bank taking property over. To avoid all the costs of taking the property on the bank will be willing to accept for their loan and remove their security from a property a much lower amount than they will be willing to sell property for after they actually own it and have increased their exposure to property even further.

Under Spanish legislation, the bank gets 21 days after auction before they have to transfer property to their name to accept an offer to remove their interest and mitigate their outstanding debt.

Given level of property, banks currently hold and expect to hold, and cost of taking property over they are very open to negotiation at this point.

We only offer property that has or is due for auction and may not or has not sold at auction and is falling within the 21 days that would provide best value for money and can be bought at lowest price possible.

Buying at this point also avoids Notary costs as payment is made direct to courts. It is generally only suitable for cash buyers as time span for acting is short and does not normally fit with the process of raising a loan, however in some circumstances a pre-arranged loan could be in place.

Each month we will publish the best value properties potentially available for the following month. See the latest Spanish repossessed property list here.

If you would like more information please contact us today.