Cash is King in Spanish Property Bank Repossession Market

Property in Costa del Sol

Spanish Property in 2013

If you are considering buying a Spanish Bank Repossession who will surely find how much cash you use in the transaction will affect how much the bank is prepared to accept which is totally contrary to resale property purchases and those properties bought directly from the developer.

If you’re buying from a distressed vendor the only thing they consider is what they physically receive for a property so if you’re buying with cash instead of a mortgage your cash isn’t that big a thing to the property owner. The only exception to this is if the vendor is under a timeline to sell and his property could be repossessed if it’s not sold within a month in this case this owner will need to find a cash buyer for the property. The same principal applies to properties that are owned by a developer here the price the property is sold for will be dependent on the outstanding mortgage the developer has on the property and the reality is he will not sell it below that price as he would have to pay the difference. Again the developer isn’t concerned if its cash or mortgage he just wants the maximum he can get for the property.

However all these rules go out the window when buy bank repossession in Spain because the bank will always want cash. There was one Spanish bank that was the exception to that rule in that they were always prepared to lend up to 110% finance on their own properties to maintain their valuation or outstanding debt for the property but will now for the first time consider reducing their valuation of properties for cash buyers. Put very simply cash is king and if you’re a cash buyer then it’s Spanish Banks where you will get the best deals from.  The only issue is that is does the bank actually have a property you want to buy. The banks own a lot of stock no one wants to buy and normally when they have properties people want to buy they are snapped up pretty quickly especially villas.
However if you do find the right property and you are a cash buyer then you will be able to achieve a discount on the property that a buyer seeking a 90% mortgage would not be able to negotiate.  Even if you only had 50% cash you can be pretty sure the bank would give you some discount for that compared to a buyer seeking a 90% mortgage.

As stated above cash is king when looking to buy a bank repossession in Spain and if you want some help or further advice on how to take advantage why not give me a call at Spanish Hot Properties.

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Bank repossessions in Spain
Spanish Bank Repossessions

The Spanish Bad Bank by Name Bad Bank by Nature

Marbella

Marbella Property in 2012

The bad bank in Spain known as SAREB has shown its true nature and why we will be staying well clear of having any business relationship with the bank.

We see the problems on the ground with buyers at La Duquesa Village and Bahia de Plata from Caixa Catalunya experiencing horrendous problems with those banks now being nationalized not having there agreed obligations to finance the said purchases honored by SAREB. This means that 100s of Spanish house sales representing  millions of Euros of house sale in effect being cancelled. This is the same situation with the banks that have been nationalized holding stock in the Medina de Banus development.

It’s really hard enough to find would be Spanish property buyers in this market without SAREB having no comprehension about selling to the international property buyer. We alluded to the problems the bank would have last month and unfortunately it’s actually worse than we predicted.

The bad bank, created as a condition of a European bailout of as much as 100 billion euros for Spain’s banking industry, will have 90,000 homes within about two years, Sareb General Director Antonio Carrascosa said on Nov. 27. The Bankia group alone will transfer 38 billion euros in real estate loans and 12 billion euros of foreclosed assets by gross value to the bad bank.

Sareb will buy foreclosed assets at an average discount of 63 percent to book value. That includes reductions of as much as 80 percent for foreclosed land, 63 percent for foreclosed unfinished housing developments and 32 percent for loans to finance finished apartments, according to the state rescue fund known as FROB.
However we come back to the same old problem if the bank doesn’t know how to deal with International property buyers how are they going to shift the stock no matter what the price is. 2013 should be a very interesting time to say the least.

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Spanish bank repossessions

BANK OF SPAIN OFFICIAL SITE

Why is It Time To Buy Spanish Bank Repossession in Spain?

There has been lots of talk about now being the perfect time to buy Spanish bank repossessions in Spain but why now?

 

Luxury Spanish property in Costa de la Luz

Spain

The banks have been dragging their feet over selling the properties they hold in the hope that things will improve. However, after the stringent reform unveiled by the government it will be worth their while to sell their property assets.
The value of the property assets held by the banks is less than the value given in their balance sheets, but is higher than their declared value in the new financial reform, a reform in which Mr Guindos, the Minister for the Economy, has taken a tough stance, according to the university professor Manso Olivar. The professor argues that the government has brought in this new reform in order to send a message to the banks: “If they are heavily indebted and do not have any other source of liquidity, they will have to sell their property assets even though prices are not very good at the moment, just like any other business would have to do in the same situation.”
In reality we are now seeing bank repossession in Spain being priced very realistically so much so they now represent the best opportunities which was never the case before.
Another factor that affects UK buyers positively is the rate of the Euro People buying property for sale in Spain can now take advantage of the most favorable exchange rate between sterling and the euro for 19 months.  As Marketing  director of Spanish Hot Properties I  believe that everything is in place it’s just about confidence .The Eurozone debt crisis is weighing heavily the European Central Bank’s and politicians shoulders, which makes sterling appear to be attractively stable and increase in value. Reuters columnist Fiona Maharg-Bravo predicted this week that property prices in Spain are likely to become cheaper in the near future as unemployment rises and the country slips back into recession. This ties in with our experience where for the first time some Spanish banks are being much more realistic about property for sale in Spain.
All that is required for the floodgates of sales to open now is the Euro issue resolving itself and once that happen you will see sales levels not seen since 2007 and before.
Spanish bank repossessions
Property for sale in Spain