Step-by-Step Guide to Buying a Bank repossession Home

The process of repossession of a property from a bank in Spain – Tips for buying houses taken over by a bank in Spain

Nowadays, banks are still owners of a stock of property for sale in Spain. These foreclosed homes come from the bankruptcies of property developers and people who cannot afford to pay their mortgages.

The repossessed houses are products highly sought after by experienced investors in the Spanish property market. But anyone can buy a repossession home.
If you are looking for a good deal, this is an excellent option to take a look at the properties taken over by the bank. But beware, not everything that shines is gold.

Here is the list of houses taken over by the bank for sale in Spain:

The bank repossession process in Spain

Before the bank begins the repossession process – The foreclosure process in Spain, which ends with the house repossessed by the bank, begins when the mortgagor is several months late without paying his monthly mortgage obligation.
The repossession by the bank follows a legal procedure which involves high costs for the debtor. Usually, once legal proceedings have been started, debt is added an additional 30% in the form of late interest, legal fees and expenses.

In this period, before starting the procedure of repossession by the bank, it is the right time to negotiate directly with the owner the purchase of the property since he will be interested in selling the house and saving as much as possible of his investment and credit.

The foreclosure process in Spain

Once launched, the foreclosure process, the usual path followed before the bursting of the housing bubble in Spain, was the auction of a foreclosed property. The problem in recent times has been the lack of buyers in court auctions, which has made award prices meager to cover the amounts owed by debtors on their mortgages. (Learn more about mortgage loans in Spain) – This problem has led banks in Spain to start with the repossession of property through an assignment in payment. Thus, the bank, before filing a foreclosure action, allows the offender to offer his properties to satisfy the total debt instead of starting the legal process.

Once the house is taken over by the bank, they will try to sell it as soon as possible to avoid the costs of owning property in Spain. The bank (generally) will consider any reasonable offer. In addition, buying a repossessed house from the bank is the best way to get a mortgage under the best conditions. The banks are eager to get rid of these good deals and are very open to listening to your offer and granting you the mortgage.

But, as said above, be careful.

Looking at bank-repossessed homes can be a great way to get the home of your dreams at a much lower price. However, do you know what steps to take to buy a foreclosed home? In this step-by-step guide, we explain how to do it successfully.

Do a thorough research. 

Once you have selected foreclosed homes, do your own research to find out what information is behind the property. Find out essential aspects such as the legality of the sale, and whether there are any outstanding encumbrances and personal situations involving the owner of the property. All these precautions can save you a lot of trouble when buying your home.

Obtain the Market Value of the Property

This is a basic but fundamental step to consider when buying any property, especially when looking at foreclosed homes. The market value can be determined by professional appraisals or real estate agencies. By knowing the approximate price of the property, you will know if you should make an offer for this property or look for another option. With idealista it is straightforward to know the market value of each house.

Search for Specialised Loans for Buying a bank repossession Home

Many financial institutions offer loans specially adapted to purchasing foreclosed homes, which incorporate more excellent payment facilities and more flexible financing conditions. If you decide to take out a loan to cover the price of the house, find out about the different types of financing the institutions offer. Compare them to find the one that best suits your needs and budget. At Asesoría Orihuela Costa, we recommend putting yourself in the hands of a mortgage broker to get the best mortgage.

Contact the Bank

Once you have found the repossessed property that best suits your needs, you should contact the bank that owns the property. Ask the bank for full details of the documents needed to make the purchase, as well as exactly how much money you have to pay for the house. This will allow you to calculate the actual cost of acquisition before closing the transaction.

From our agency in Orihuela Costa Alicante, we can help you with all the paperwork at the notary’s office, registry, settlement office, etc…