Bank Repossessed Property in Marbella?
Many buyers are attracted by the idea and think that making the decision to buy a bank repossessed property is a good way to get onto the property ladder in Marbella, but this is something that should be approached with extreme caution. Firstly the majority of stock on the bank’s books is not particularly attractive and usually not worth a second look! The property has often sat empty for many months or even years and will be neglected and perhaps has been subject to thieves and vandalism. It’s logical that if an owner has got into difficulties with his mortgage, then of course he has tried to sell the property himself first and failed.
Most Spanish banks now have a ‘real estate’ division on their websites, so feel free to take a look and see how poor the standard is. You can usually tell when they only post external pictures! Secondly, remember that you are never going to be in possession of true and ‘unbiased’ facts from the Bank – the one entity that you really want to be sure you can rely on! Banks are no doubt manipulating the real number of properties being repossessed in order to keep their balance sheets looking right.
In the past, they would begin proceedings against an owner after just 3 months of arrears and yet, over the last year or so, many owners have gotten away with 12 or 24 months before being repossessed. This way the Banks can actually massage the figures and hold their position on prices. Back in 2009 when things were getting rough, the banks were only offering around 20% discounts, and it was only later in 2011 that more attractive discounts appeared.
One would expect to be discussing 40-50% discounts for it to be worthwhile. Of course, the banks shot themselves in the foot during the boom years, with the exaggerated valuations that they encouraged and often in excess of 100% mortgages, resulting in countless negative-equity situations.
If you find something that you like, bear in mind that if you agree to pay the listed price and a small deposit, then they will get moving pretty quickly. If you put in an offer, then they will often hang around in the hope of an improved offer and you may well find yourself in a bidding situation.
So yes, buy a bank repossessed property in Marbella. Some banks are even offering 100% mortgages to sweeten the deal, but buyers must be certain that they are actually paying no more than the true market price. If you are a non-resident and looking to get on the property ladder in Spain, then it is extremely unlikely that the bank will offer you 100% – more like 70% and you will have to open an account with them as soon as your offer is accepted. Of course, the interest rates and conditions will be better than most standard mortgages.
Always bear in mind that if you’re looking for a deal on a property purchase in or around Marbella, you should still look at the resales market, negotiate hard on price and shop around for a good mortgage product. Find yourself a good lawyer, and be prepared to be patient!