“How can I buy a bank repossession in Tenerife?” Quite a regular question that comes up in our game…
First of all we need to get clear on what you want from the property that you’re going to buy here in Tenerife.
The thing is, there really aren’t that many bank repossessions left here that are worth having, especially in areas that you might consider as suitable for a holiday home, so really, if you’re looking for a short term holiday let in Tenerife and want to look at bank repossessions, at the time of writing, there is very little – if anything – available for you.
Now, if you’re looking for a cheap bolt hole that you’re going to use yourself, well, that could be a different matter because there are still some suitable properties available – but – there’s always a but isn’t there? But, you’ll need to realise that again, the bank repossessed properties close to the popular holiday resorts along the coast have pretty much all dried up now. You’ll be offered loads of properties in towns such as Las Chafiras, San Isidro and the like. There’s nothing wrong with these places, it’s just that you need to realise that they’re not on the beach, probably won’t have a sea view and there’s a chance that they won’t have a community swimming pool either.
So, you’ve got to get over the hurdle that you’re probably not going to find a bank repossession in Las Americas or Los Cristianos. Also that there aren’t any left on holiday letting complexes, so if you buy a property through the bank you’re probably not going to be able to rent it on a short term holiday basis and you also need to be prepared to look at the residential areas that might suit you…so now to your question, how do you go about buying a bank repossession in Tenerife?
The answer is two-fold. If you speak Spanish or are willing to assume that someone in a bank is going to speak your own language with you at a level that you’re comfortable with while buying a property from them, you could quite easily go direct to a bank. There are still banks with bank repos for sale and plenty of them…just bear in mind what I mentioned earlier.
If you go direct to a bank, you should really take independent legal advice and speak with a lawyer. The bank may go ahead and do some of the legal work for you but you should really make sure that you’re happy with what you’re buying and that there is no mortgage outstanding on the property, or if there is, that it’ll be paid off in its entirety on the day that you sign at the notary to become the new owner.
If you’re a little more cautious or maybe it’s that you’d like to have a more varied list of bank repossession properties that are available, you might choose to go to a reputable estate agent that deals with bank repossessions.
If you do it this way, it’ll be more like buying a property through the normal channels. You’ll also have the estate agent working for you and so hopefully they’ll be able to inform you of any unpopular areas or any other reason as to why the property has been repossessed by the bank.
If you end up choosing to buy a bank repossession through an estate agent, you may find that the agent wants to charge you a finder’s fee. The thing is, sometimes the banks that want to get rid of the properties don’t want to pay any commission to the agent, so in effect, the agent will add something on top of the cost of the property…probably 2.5 – 3%, to pay for their services. As long as it’s not extortionate there’s no reason why they shouldn’t charge, after all, they’re the ones with the knowledge of how the process works and which banks have which property, so they need to be paid for the work they’re doing.
Again, even if you use a reputable estate agent, just as I mentioned earlier, you should really use an independent lawyer as well just to ensure that what you’re buying is legal, will be 100% yours once you pay for it and that there are no outstanding charges on the property.
When you buy a bank repossession in Tenerife, the system will be pretty much the same as buying a non-bank repossession. You probably won’t get loads off the price – if anything, you’ll need to pay at least a deposit of 10% to reserve it and you’ll have to attend notary, just the same as normal.
If you’re interested in buying a property in Tenerife and want to know what the buying process is like then click the following link and it’ll lead you to a page that has 17 of the most frequently answered questions about buying a property in Tenerife.