Peculiarities of purchase of real estate collateral in Spain

Mortgaged real estate is housing purchased on credit by the previous owner, who was never able to pay off his obligations. Also, real estate from bankrupt construction companies that have failed or failed to meet financial obligations for this object is considered as collateral. Such real estate (sometimes entire complexes) is seized by the bank and put on the market, often at very attractive prices. The crisis had a huge impact on the development of this segment - sales of mortgaged housing today account for about 10% of the total number of transactions in Spain. Although the procedure for buying mortgaged real estate over the past few years has been quite streamlined, there are some nuances in it. It would seem that in the purchase of problem housing there is only an additional plus - low cost - however, the bank is a rather specific owner, offering the buyer somewhat different terms of purchase. Life cycle of mortgaged real estate Real estate, taken out in a mortgage, goes to a new owner, who has all the rights, up to the sale of this housing with a mortgage encumbrance. If it was not possible to repay the loan, the owner receives a notice of eviction, and the housing becomes the property of the creditor bank. After that, the bank lists the property for sale, transferring information about the objects to authorized agencies. In 2012, a “bad bank” was created in Spain, whose task was to buy and resell distressed bank assets, so a significant part of mortgaged housing went through another instance. The apartment is often returned to the bank in an unsatisfactory condition. Former owners, leaving the house, can cause significant harm to it, while the bank is not interested in carrying out repairs. Broken tiles, torn wires and lack of plumbing - this is what a potential buyer can expect. Of course, there are pleasant exceptions - all this also affects the final price. If the buyer is satisfied with everything, he concludes a deal with the bank and becomes the full owner of the home. Mortgaged property prices Banks are not interested in owning seized housing and paying taxes on it. Therefore, the prices offered by them may be lower than the market ones: they are formed on the basis of the market value of the object and the balance of the loan amount not received by the bank through the fault of the previous owner, and are most often final. Some banks offer bargaining opportunities to the buyer. As a rule, this applies to overpriced properties. It is also possible to buy mortgaged real estate at auction - the most interesting offers are bought out by entire portfolios. Such a purchase is especially profitable for companies whose reconstruction, which has been put on stream - repaired real estate, especially if it is advantageously located, significantly increases in value. Owners of mortgaged real estate, who are in a difficult situation, often prefer not to wait for the housing to go to the bank, but to sell it with encumbrance. This can be much more profitable for the buyer, agencies are happy to participate in such transactions. Features of the purchase The object for sale, in addition to the damage caused by the previous owners, may have debts for utilities. The bank is not responsible for them, so it is better to find out all the details at the stage of working with the agency. As for obtaining a mortgage loan for a collateralized object, the conditions for its provision can be ordinary or even more favorable - for example, the loan amount is 60-70% of the value of the object. However, the provision of a standard package of documents when obtaining a loan cannot be avoided: the bank, trying not to step twice on the same rake, carefully checks the creditworthiness of a potential buyer. If the new owner was also unable to pay off the mortgage loan, the story with the seizure of real estate repeats itself. Regions The bulk of mortgaged real estate, as a rule, is located far from the tourist regions, but in places interesting to our compatriots, you can find lucrative offers. Agencies that value their reputation pay special attention to the liquidity of such objects and try not to offer buyers housing in “unfavorable” regions. Who is interested in collateralized real estate A buyer who has the opportunity to purchase an ordinary real estate not owned by a bank is unlikely to become interested in collateralized objects: the probability of finding high-quality housing that does not require additional investments is too low, and a lot of time will have to be spent looking through the "killed" houses ... However, if you have the time and desire to "separate the wheat from the chaff", you can look for something at a very favorable price and at the same time suitable for life. Perhaps the main category of buyers interested in secured housing is investors. If the region is prestigious enough, high-quality home renovation can significantly raise its price and ensure a profitable resale in the future. Antonina Khirnaya HomesOverseas.ru We would like to thank Olga Golenko (DGF & IP ) and Elena Kartavtseva ( Lighthouse Estate ) for their help in preparing the material .