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Repossessed Property for sale in Spain
What do you have to know?
There’s a wide range of repossessed property for sale in Spain – also referred to as Foreclosure or Real Estate Owned, and that’s why, today, we want to talk about repossessed properties and exactly what they are.
What is a repossessed property?
A repossessed property is a property that belongs to the bank because the previous owners did not pay either their mortgage or other financial debts and had to abandon the property. These homes, which are often sold to the highest bidder at a public auction, usually sell for less than the market price because a lender wants to get money back quickly. This is a great opportunity for potential buyers since repossessed property for sale in Spain could be a perfect investment.
What are the most common types of repossessed properties?
It’s important to know that not every repo property in Spain is the same. Let’s go over the different types so you know exactly what you’re looking for.
Historic Homes
Occasionally you can find old historic homes that have been lost in foreclosure. Do not be quick to pass these up. Though some may require complete modernization, which can be a large investment for a fix and flip investor, others have been remodeled and sold with high profit with help of the right agent.
The construction methods used a century ago can rival or exceed how homes are built today, as we all know. However, renovated, restored and updated historical homes are often sought after.
Single Family Residential Homes
The vast majority of bank repossessed homes for sale in Spain and government repo homes are standard residential properties. Some may have a frame construction. Others can be concrete or brick homes.
Depending on the local area and construction, the home may offer a basement, garage or even a pool. Investors often buy these homes and convert them into rental properties. In doing so, they can benefit from the income stream while they wait for the market to recover before they sell them at a substantial profit. First home buyers should consider buying a repo home because the purchase cost is often less than a traditional purchase.
Fixer-Upper Homes
The name is as descriptive as can be for this option. It’s one of the most thought of types of foreclosed homes in Spain, they are the properties that are in need of some type of repair, remodeling or complete renovation. Investors often focus on these properties because they can offer the greatest return on their investment. Depending on the condition of the property, these homes can be sold at a huge discount and, depending also on how well the property is renovated, the value of the property can increase vastly.
Abandoned Homes
There are lots of these properties in the Costa del Sol, suburb and small rural towns in the south of Spain. If the property owner fails to make any mortgage payments or they forget or refuse to pay the property taxes, these properties can be repossessed and sold at a substantial discount for the buyer.
Vacant Land
Vacant land foreclosures and repossessions often happen at the state property tax level. If a property owner fails or forgets to pay their property tax on a piece of vacant property, the property can be auctioned at a property tax sale.
There are many cases in the Costa del Sol of vacant land being sold at prices well below the market average. The offer isn’t huge but, if you surround yourself with quality agents that know the markets movements, you can soon catch a real winner.
There are various other types but, the most usual repossessed properties for sale in Spain are the ones stated above.
Why are properties repossessed?
There are various reasons why properties get repossessed, 99% of the time it’s due to financial or family issues. It’s, at this point, that we want to review the situation of real estate in Spain throughout the last decade. This should explain a little more about why there are so many foreclosed properties for sale in Spain.
In 2006, properties in Spain are being constructed at alarmingly fast rates and prices seem to be healthy. Buyers from the northern countries of Europe are purchasing their dream properties in the sun.
Fast forward to 2008 and the property bubble in Spain is in the process of bursting. An event that left the entire construction sector in ruins and thousands of people without a job to create income. This appeared due to the inception of one of the biggest depressions we’ve experienced in the last few decades. The depression lasted around 7 years and left property value in Spain 65% lower than at the start.
With the global crash affecting jobs and income at home, many foreign buyers who had financed their property in Spain could ill afford to maintain mortgage repayments or meet the expenses required to maintain their holiday home in Spain. Millions of foreign buyers were left with negative equity and, to no real surprise, many of them chose to simply abandon their Spanish holiday properties and, at this point, the banks repossessed all of these properties and areas.
After 2015, the Spanish market has been on a slow but steady recovery and buyers from the rest of the World, especially from the north of Europe, have made a return to purchase a property in the Spanish market.
This isn’t the only reason why properties have been repossessed in Spain, but it is one of the most common ones and vital to understand the way the Spanish property market works.
Reasons why you should think about buying a repossessed property in Spain
Cheaper prices
Obviously one of the most attractive features of buying a repossessed property in Costa del Sol, is that the prices are usually below the average price of the market. This serves as a great opportunity for buyers.
Less risk of negative equity
Buying a bank repossessed property in Spain with the market at a low price point means you will have less need to worry about negative equity. It’s unlikely that the property will be worth less than what you pay for it.
A diverse choice of properties
You may imagine the bank repossession market to be a reduced one but, as we have a portfolio of more than 22.000 properties, we know that there’s an offer of repossessed properties for sale in all shapes and sizes. From small apartments to large villas, there is something to suit your requirements from Estepona to Malaga. We have properties in all of the key locations throughout the coast.
Fast chain-free completion
A chain-free property is one that is being sold by someone who does not need to sell the property to be able to move to a different property, these are sellers that are not tied to other requirements.
This is a big advantage as, during the buying process, one of the most common things that cause failure is sellers depending on other properties to buy at the same time. A chain of dependent steps is created where everything has to fit in perfectly otherwise the whole process fails.
No debt with the property
When you buy a repossessed property in Spain with MK Estates, the bank will keep all of the debt associated with the property. This includes any and all taxes that may be tied to the home.
Experienced and effective agents
Our agents have been working with bank repos for many years and we know exactly what we have to look for so that we can get you your dream property in the most secure, cheap and fast way possible.
No negotiating prices
When purchasing a bank repossession, you know, right from the start, what the exact price of the property is going to be. This way, you don’t have to deal with the hassle of negotiating and not having your requirements met. You’ll know if the price is right for you from the beginning.
Removing unpredictable elements
This is tied to the chain-free nature of these contracts. By purchasing a foreclosure property in Spain, you’re getting rid of a few steps in the process that make everything fail.
Motivated sellers
Banks need the sales to succeed to get rid of their financial losses, so they will always do everything that’s possible to sell the properties.
Renovations are cheaper in Spain
Sometimes, when buying a repo property in Spain, you’ll need to make some adjustments or renovate certain areas or elements of the property that may be worn out, not secure, etc. In Spain, renovation costs are much cheaper than in Northern countries like England or Germany.