How to grab a bargain home in Spain
By Kevin Barnett, 01 Jul 2008
The key to a good property investment is to buy at the lowest possible price, essentially below the prevailing market value and then having had great holidays or rental income, enjoy maximum profit at the time of eventual sale.
That’s the ideal scenario for most buyers seeking a bargain home in sunny Spain and it can be realised more easily in current market conditions than at any time in the last decade.
But, as always, it’s a case of buyer beware as there are a few pitfalls to avoid. Here’s how to buy Spanish property at below market value:
Official auctions
This is where the banks have traditionally offered their repossessions, few and far between as Spanish families would eat cheese and bread for a month rather than hand back the keys. The auctions are advertised on websites with dates and instructions on how to get in on the auction circuit.
Don’t waste your time, as the local “dealers” will eat you alive if you start messing up their cosy buying activities. They grab the best deals, spend the minimum on repairs and rent them out within weeks. There may be the odd pile of bricks in a corner of the olive grove, but generally the best bargains are “spoken for”. Think Lovejoy crossed with Frank Abagnale Jr and don’t go there.
Bank owned
There are now more ex pats getting into trouble with their mortgage payments as the European Central Bank hikes the interest rate. Often, Spanish banks work with the owners to sell at the minimum price that clears the mortgage and the banks’ legal costs. This benefits householder and bank, but if it doesn’t work there’s a physical repossession and a professional valuation. This details every aspect of the property, its condition and compares its “value” with similar neighbouring properties.
Private Must Sells
Many ex-pats who moved too late to benefit from the generous equity growth percentages of buying off plan that attracted 1,000s of buyers to the Spanish property market up to two years ago. As a result they may be struggling to find the balance on completion. Other must sell and distressed sales vendors may have taken delivery and failed to attract enough rentals to pay the mortgage and other ownership costs.
The German owner of the Christopher Columbus family home in Mallorca lopped EUR 600,000 of his valuation asking price so he could get the medical treatment his wife required. It failed to attract offers on German EBay, but specialists, PropertyInSpain.Net sold it in five days of it being listed as a below market value bargain.
Developer key readies
Spain’s developers and builders are cutting production by a third this year, down from a peak of 600,000, as the off-plan investors switched to the so-called emergent markets and other buyers baulked at the rising interest costs of the Euro. That means there are more key ready homes available at the original launch prices of two years earlier and/or with a hefty discount to turn the bricks into cash that much sooner.
Sellers’ dismay becomes buyers’ delight, but where is the best source for these below market value bank owned, repossessions, developer discounted and must sell homes in Spain?
A Google search shows, specialist website PropertyInSpain.Net as the top ranked source for “must sell property in Spain” and for “Spanish bank repossessions”. The comprehensive website is offering habitable 3-bed homes from EUR 30,000 and a EUR 1M Marbella villa discounted by fifty percent with Real Spain and coastal bargains in all price brackets.
The company get the properties directly from the “owner” Spanish bank, offers them on its website and the buyers mainly deal with the bank branch nearest the property. There are also “Must Sell” and distressed sales in the online showcase and many are such value they can be bought with a 100 percent mortgage, often with the old mortgage being switched to the new buyer.
Because all the essential paperwork, including a current valuation acceptable by every lender, is readily available the buyer can complete within 4-6 weeks with mortgage and utilities organised.
So for the best bargains in Spain register for PropertyInSpain.Net regular updates as once these have been carefully checked and approved by their experts, members are informed without delay. Properties are fully legal, free of debt charges and officially registered. Buying is on a first come, first served basis.
PropertyInSpain.Net is respected for its carefully researched, up-to-the-minute professional advice on Spanish property and for the latest below market value investment opportunities.
The company has partnerships with many leading Spanish banks and the UK brokers for 50 of Spain’s leading developers.
Useful websites for general research
Spain website | Costa Blanca | Valencia Province | Alicante Province | Murcia Province | Benidorm | Castellon Province
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