5 Things To Know About Buying a Bank Repossession in Javea

Blanca International in Javea have compiled this article and list of 5 things to know about buying a bank repossession in Javea. Blanca International are Estate Agents in Javea who help buyers find their dream home purchase property in Spain.

Buying a bank repossession property in Javea can save you thousands on your dream home, but you’ll need to be smart to avoid that dream turning into a nightmare.

For top advice from experienced real estate agents, contact our English-speaking team at Blanca International.

Bank repossession properties are rising once again in Javea in the wake of the COVID-19 pandemic.

During the last economic crisis, in 2012 alone just a handful of Spain’s top banks amassed more than 50,000 houses worth over $15 billion. The Spanish real estate analysts DePlace explains how recently more and more individuals and developers are defaulting on mortgages and debts, and watching banks repossess their properties.

Bank repossession properties are highly sought after in a place like Javea, as they can be purchased at knock off prices and resold for a profit or kept as permanent and holiday homes. Many websites offering bank repossession properties are in English these days.

However, there are pitfalls to buying a bank repossession property that make using an experienced real estate agency like Blanca International vital.

Below we will outline five things to know about the process.
1. You can get a bank repossession property in Javea at a cheaper price

Spanish banks who repossess a property are often in a hurry to sell.

This is of course because the bank wants to recover its unpaid mortgages and other losses, but also to avoid paying the costs associated with owning a property in Spain. As such, banks are generally open to considering any reasonable offer.

For example, the Spanish blogger at Vive Distino explains how they saved ‘thousands’ after the bank accepted their offer some 10% below the sale price. They encourage you to continue making offers even if an initial one is rejected as the bank will be keen to sell as soon as possible.

Nevertheless it is worth comparing sales prices of comparable properties in the area, often with the help of a real estate agent. While the bank wishes to sell their property it doesn’t mean they will sell a repossessed property for peanuts.

Furthermore, sometimes a very low price for a bank repossessed property could mean there are issues with it (see below).

2. You can get a 100% mortgage on a bank repossession property in Javea

In the same way that banks are eager to get rid of their repossessed properties, they will be keen to offer favourable mortgages.

If you are a Spanish resident, it is not uncommon to receive a 100% mortgage on a bank repossessed property in Javea. Many times this mortgage includes notary costs, property studies and other costs associated with the house purchase process.

Many banks will offer long repayment terms (up to 40 years), more flexible monthly repayments and sometimes even include a ‘renovation check’ up to €5,000 to help you make repairs to the repossessed property.

Many times this can make buying a bank repossessed property in Javea a favourable option for buyers without large savings or income.

NOTE: if you are not a Spanish resident you will be unlikely to get higher than 80% of the purchase price in a mortgage on a repossessed property.

3. You will have to pay a small amount to reserve a bank repossessed property and wait 60 days

The process to buy a bank repossessed property is straightforward, but requires a few months’ wait and a downpayment.

Once your offer is accepted you will typically be asked for a cheque nominativo (‘nominative cheque’) which reserves the property and takes it off the market. If the property is not sold or conditions unmet, this money will be reimbursed.

During this time you will also be asked to provide relevant documents such as confirming the origin of the money, your bank statements, proof of monthly income or salary, social security history and more.

When it comes to buying a bank repossession property in Javea, it’s worth noting that in 2020 following the COVID-19 pandemic the government of the Valencian Community passed laws that give them ‘right of first refusal’ for many bank repossessed properties.

The government of the Valencian Community may be interested to buy a bank repossessed property in Javea to provide more social housing, and even if they do not the process still grants the government 60 days to buy the house at the bank’s asking price.

It is very rare for the government to buy a bank repossessed property – especially as Javea is one of the municipalities in the Valencian Community which has offered the most land already towards social housing.

Once this window is passed, the house purchase can go ahead with relevant notary and legal costs and procedures.

Many bank repossessed properties also come with a six month guarantee for major structural faults or other important issues.

4. If you can, negotiate with the owner before a bank repossesses the property

The property repossession process in Spain comes with its own costs to the bank, and many times this is added onto the amount owed by a debtor.

While the procedure for repossession by the bank is underway, it can be worthwhile negotiating directly with the owner to save them as much of their investment as possible.

Many times the bank actually encourages this as, in previous years, a repossessed property was typically sold in a judicial auction. However low attendance or bids often saw houses selling for extremely low prices and the banks not meeting amounts owed by debtors on their mortgages.

Many times before even filing a foreclosure suit, the bank will let the defaulter offer the property to satisfy the total debt in advance.

In these cases it can be worth having a good relationship with the branch manager of your local Spanish bank and inquiring about upcoming foreclosures. In Javea local bank branches include Santander, Sabadell, Caixabank and Bankinter.
5. Make sure to fully check your bank possession property in Javea

Typically when securing a mortgage on a house you wish to buy in Javea banks will make thorough checks on the property.

In the case of a bank repossessed property, the bank will want to get rid of the house as soon as possible and be (willingly or unwillingly) unaware of any issues. These issues could include debts on community of owners payments, local property taxes, squatters, structural issues and houses being in a state of disrepair.

This is why you must fully check your bank possession property in Javea before buying. In many cases, use a real estate agency like Blanca International experienced in these purchases.

Here’s an overview of things to check:

Check any outstanding charges and debts on the property, which can usually be found by consulting the Land Registry in Spain (catastro). Ask your legal advisor to clear these debts before registering the property in your name.
Owners of repossessed properties will often leave their house in a bad state.
In rare occasions a property can have a demolition order.
The property may have had water and electricity supplies cut, which need to be reconnected often at a cost.
You may have to pay purchase tax on a value higher than the actual purchase price of the repossessed property – check with your legal advisor or real estate agent in Javea.


Useful links

You can find a list of property portals owned by banks and showing repossessions here https://privacasa.eu/bank-repossessions

You can find a list of all bank repossessed properties up for judicial auction in Spain here: https://subastas.boe.es/

You can find a popular forum (in English) for bank repossessed properties in Spain here: https://www.spain-property.com/bank-repossession.asp

Thank you for reading our five things to know about buying a bank repossession property in Javea.

For any further questions don’t hesitate to contact our real estate agents at Blanca International.