What is a “Repossessed Property”?
This is the general term used to describe properties which
have ended up in the hands of the bank due to non-payment of
the loans associated with the property. They are homes whose
new owner is the bank.
Is it safe to buy a repossessed property?
Legally there is no problem. The bank representative will
sign the deed of sale in favour of the buyers.
Could there be outstanding debts?
No. The loan originally taken out on the property has been
cancelled and the property should appear as free of charges
in the property registry. If there are any doubts regarding
payments due to the homeowners’ association or the Council these should be paid by the banking institution before the
deed of sale is signed. Outstanding water and electricity
payments that may have been left by the previous owners are
irrelevant, as in any case a new contract is made with the
Do these properties benefit from any special mortgage
Yes. All the banks make special offers for the purchase of
their properties. Some finance a very high percentage of the
value of the house and also offer better interest rate
conditions. They are usually more flexible in their analysis
of the buyers’ documentation than in the case of a mortgage
for a property not owned by the bank.
Do they have water and electricity supply?
In general, no. They have been unoccupied for some months
and the supplies will have been disconnected. To reconnect
the supply a new contract will have to be taken out with the
corresponding companies. These contracts may require
additional documentation which the banking institution is
not obliged to supply and which may involve an additional
cost. Depending on the age of the property, on how long the
supplies have been disconnected and on the particular rules
of the Council in question, different documents will be
requested such as, for example: official certificate of
installations, second occupancy licence, technician’s
What condition are the properties in?
They differ greatly. In general they all (except new builds)
require some aesthetic repair. You should bear in mind that
their previous owners lost the home and had to give it up,
and in some cases items such as internal doors, bathroom
fittings and taps may be missing.
Will the bank make any repairs?
No. The banks’ policy is to liquidate their existing real
estate stock and in most cases this consists of establishing
a minimum price which excludes any maintenance or repairs
being carried out by the bank.
Do I have any guarantee against any defects I find?
The fact is that you don’t. The properties are sold “as
seen” in the condition in which they are found and the bank
is not responsible for any damage there may be to the
Are they cheaper than other similar properties which are not
Without doubt. However, you must also take their condition
into account. When you go to view repossessed properties you
should know what to expect. You need to be able to imagine
the house clean and repaired of any small imperfections.
However, the investment required in some cases may be
profitable for the buyers.
Do the banks accept underbids on their properties?
Only occasionally. For some months now all banks, have been applying a minimum
price policy in order to sell their portfolio of properties
as quickly as possible.