How many bank repossessions have you ever bought? Who buys bank repossessions and why? How do bank repossessions work in Spain rather than the UK or Germany and other Euro states?

You may have noticed that the hype around the words Bank Repossessions Available is mostly on aforementioned Google advertising. Why do you not see these claims promoted in glossy print publications? Or their simple “snap them up” common availability reported by renowned property journalists?

Is it because it’s just fiction, hyped up online for low costs by dubious agents or back bedroom websites looking to ensnare and then to lead you goodness knows where?

Bank repossessions, would commonly be sold at public auction. In the UK that means what it says, however in Spain it simply means that a public bulletin is issued, but to our knowledge there’s certainly no physical auction. 

The process is too laborious to explain here; suffice to say there is a 9-12 month procedure for a bank to obtain, process and sell off a property through an official repossession. There is no auction - there is a courthouse, where ultimately a few in the know may pick up the property at a knockdown price, or it returns to the bank stock unfettered by the defaulted mortgage.

Why not? Well, in recent years banks worldwide (bailed out by the taxpayer, naturally) have lent somewhat carelessly, approving very high mortgages – in many cases 80-100% or over! – on properties that were often overvalued.

We all know this – we’re paying the price for it, yet the banks are not and will not, certainly not to the advantage of José Público with a bit of spare cash and an eye for an auctioned, bargain repossession.

Where a bank has had to repossess a property (in significant numbers now) they find that the property does not have sufficient equity to auction off - it simply won’t sell at auction to cover the original loan plus costs. It is then transferred to an asset on their balance sheet or towards a toxic loan bin to be held until sold in the future at a price that covers any losses incurred.

Yet that is not the whole story…

VIVA, as a recognised agent of more than 10 years’ standing do, on an occasional – confidentially referred – basis, receive indication of properties that might be facing repossession that can be purchased prior to any proceedings, thus allowing the existing owner an exit, at a cost to the new buyer of the outstanding mortgage and indeed sometimes being able to subrogate into the current mortgage. This is often a bargain - a “Bank Pre-Repossession Bargain”! Or once again is it? 

If an owner can’t sell his property at just above his outstanding mortgage, then why buy it? The circumstances of the default need to be investigated and even considered against the “Perfect Mix.”

Bank sell-offs or pre-repossessions are quick to the market, and require quick action. José Público, however, should ask himself whether this bargain is actually the kind of bargain he really wants. Will he use it, if so will he like it? Or if buying for profit as a speculator then how will he then sell it at a price the bank could not?

Ask yourself again, how many repossessions have you bought in your lifetime? Then think again about the marketing behind them.

If you would like to know more or hear from us further
please email us at info at yourviva dot com  

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