Buying real estate in Spain, the pitfalls to avoid
Spanish banks still have a stock of one million homes foreclosed and for sale. So much so that it is possible to buy villas discounted 40% on the Costa del sol. But beware, to achieve a good deal it is necessary to avoid the pitfalls, people who come from outside who arrives in Spain to take advantage of broken prices on real estate, does not know that it could end up with a more slate Important. Indeed, the On-site Housing Code has peculiarities, of which the French buyer knows nothing.
1 – Unpaid charges go to the future owner
First of all, unpaid charges are automatically the responsibility of the buyer. While in France it is possible to buy an old apartment following a real estate foreclosure and wash the hands of the loads that hover, this is not the case in Spain. The local by-law requires the new owner to take on the unpaid water and electricity on the housing he has just bought. To avoid this very unfortunate situation, especially if the last occupant stayed 2 years without paying his bills, it is necessary to go to a lawyer. With benefits ranging from 1% to 2% of the price of the coveted home, the buyer will ensure that no chargeishes is due on the dwelling.
2 – The stock of seized property for sale from banks
The Spanish banks have a complete catalogue of foreclosed houses for sale, and will be happy to present them to you. But their explanations will stop there, they will be careful not to tell you about the urban projects that have just been voted on and accepted by the local city council. In the end, because the state coffers are empty, you will have to participate in the construction of a road, a cultural centre or a new gymnasium. And once you've become a homeowner, you can't refuse. Find out more about the urban project that is underway in the municipalities you want.
3 – A liability that banks are doing very well with, bank foreclosures
The public mistakenly believes that the Iberian real estate crisis was caused by the subprime crisis in the United States. This is a false truth, because in fact the Spanish banks were reckless from the early 2000s. At that time, new programs followed one another, even going so far as to create new cities in the middle of the desert. And in order to sell these projects, we had to be flexible on the terms of borrowing. As a result, many middle-class households with limited incomes have been able to become homeowners by taking on up to 50% debt. Over the years, late payments have accumulated and the number of bank foreclosures has gradually increased.
The arrival of the subprime crisis in the euro area has only given an extra blow, in an economic system already weakened by a housing market at half-mast. Today, the catalogues of credit agencies include a number of foreclosed homes for sale, which they would very much like to get rid of in order to replenish their assets.
Because when foreclosed homes do not sell, their price decreases. However Spain could see the end of the tunnel, and still hesitant buyers could miss out on the best deals. As prices per square metre begin to stabilize, to the point that the rating agency Standard and Poor's has forecast that they will lose only -2% in 2014.
4 -Good deals are trading
There are still good real estate deals to do, with prices discounted by up to 40%. Banks want to dispose of their foreclosure stocks quickly, but also have a problem with economic growth. It is now possible for a French household to buy a villa with a swimming pool seized by a bank, while borrowing from the same Spanish bank. This is one of the best strategies to get the best price, because the financial institution wins on 2 tables. First he gets rid of a bulky liability, then he returns to growth by lending money to an individual.
But there are other tricks. Opening a current account and stocking it monthly to cover maintenance expenses is a good idea. Asking the bank for an extra effort on the purchase price in exchange for a home insurance purchase is still a good idea.
5 – opportunities not to be missed
Today, more than one million new properties remain unsold between Marbella and Valencia. This is enough to drive down prices, some of which have lost as much as 40% since 2010. Today it is possible to buy a villa facing the sea, with swimming pool, at 2500 euros per square meter. Suffice to say that it is impossible to find such prices in Brittany, much less in the Landes, let alone on the Côte d'Azur. Going further south on the Costa Blanca, it is possible to find a new villa in a residence with shared pool and garden. Prices range from 150,000 to 200,000 euros, depending on the area of the house and the surface of the garden.
Don't hesitate to come back to us to get you a cheap good that suits you