The 2008 economic crash was particularly difficult for Spain. Subsequently, many cheap Spanish property repossessions have appeared on the market.
After the economic crisis, unemployment rose sharply, lax lending was rife, and interest rates crept up. This meant that many Spanish homeowners found themselves in financial difficulty and instances of home repossessions soared. It’s only now that the Spanish economy is bouncing back and home valuations are recovering again. Plus, the number of bank repossessions have made for some very attractive prices – but there are things to look out for if you’re considering cheap Spanish property repossessions.
When it comes to bank repossessions Spain is fertile ground. What’s more, bank repossessions aren’t confined to the rural interior; there are also opportunities to acquire bank repossessions in Spain on the Costa Blanca or Costa del Sol. Purchasing a repossessed property is certainly tempting as the prices tend to be much lower than comparable homes in the area. Plus, it’s possible that the bank will offer you better financing conditions. That said, there are potential financial risks that need to be taken into account. Below we outline what to keep in mind when considering this type of investment.
1. Check for outstanding debts against the property
As we’ve introduced above, the bank will repossess a property when the owner defaults on their mortgage. Therefore, it’s entirely possible that the property will have other debts outstanding. Examples include IBI (local council tax), rubbish collection fees, or any other type of unpaid community taxes. Complete records of any outstanding debts are usually held by the Land Registry – but it’s possible you may need to do some in-depth research to avoid any unexpected costs.
2. Water and electricity supply
When it comes to cheap Spanish property repossessions, the same scenario can apply to the building services. If someone has defaulted on their mortgage, it’s also likely that they may have failed to pay other bills like water and electricity. Equally, if the property has been vacant for a long period of time, the electricity board or water company may have disconnected the supply. Therefore, you need to research the status of the building services and the cost of reconnecting should this be necessary.
3. Make sure all legal documents are in place
Remember – just because you’re buying from a bank doesn’t necessarily mean all the legal paperwork will be in order. In some cases, the previous owner may have not recorded extensions or swimming pool installations with the Land Registry. Equally, you may not always receive the current habitation certificate when buying a Spanish bank repossession. Another piece of paperwork you’ll need to ensure is in place is an energy performance certificate. Without one, you could incur a hefty fine. If any of these documents are not presented, you will be responsible for the cost of obtaining them.
Cheap Spanish property repossessions: Make sure your investment is sound
Sure enough, cheap Spanish property repossessions offer great value for money. However, it is critical to pay close attention to the details. Often, it is advisable to hire an experienced surveyor to assess the condition of the property and the building services. In addition, you should also hire a lawyer with plenty of experience. With their assistance, you can investigate any outstanding debts or charges. Through the expertise of the right professionals, you can enjoy your new Spanish home without any complications – and make sure it’s a great investment.