Buying a sofa attachment in Spain may seem interesting. After all, prices are often very competitive. However, the course of the transaction can be stressful. This article gives you in advance 5 tips On investing in a bank foreclosure.
Tip 1. Timing
A bank repossession usually needs to be handled very quickly. Count such a 30 to 60 days. This means that the notarial deed will be signed within a maximum of 60 days.
The main stumbling block is obtaining an NIE number. This is a tax identification number for non-residents. Applying for such a NIE number can easily take 1.5 months. Some banks also require you to have an NIE number before they reserve the property for you. You understand that this can be problematic.
A first tip, therefore, is to already apply for a NIE number in advance.
Tip 2. Decide quickly
When you go to view a bank foreclosure, you will find that the broker will push for a quick decision. You may think that every estate agent pressures you to act quickly. With a bank foreclosure, however, this is the rule: quality homes go out the door really fast.
Tip 3. Resale or new build?
It happens that a bank foreclosure is actually a new build. After all, the property was often never put into use. So for Spanish law, the property may qualify as new, so VAT applies. In the case of a new construction, VAT is added, plus stamp duty. If the property is a resale, it is registration duty.
An example. If a bank repossession located in Murcia qualifies as new construction, you will pay 10% VAT + a stamp duty of 2% on top of the purchase price. However, if it is a resale, there are only registration fees of 8%. So this is a difference of 4% on the purchase price.
Therefore, ask beforehand which regime applies.
Tip 4. Haggling over price is not obvious
You also have little to no margin to negotiate the price. Banks fix prices in advance. Haggling is difficult because you are not dealing directly with the decision-maker. Also, banks have their own procedures on pricing, so it is not easily deviated from.
Tip 5. Hidden costs
With a bank repossession in Spain, there is typically a problem. There is a reason why prices are so cheap. However, the nature of the problem may vary.
- For example, there may be outstanding debts in the urbanisation.
- Or there are building violations or charges on the property.
- Possibly the houses are not yet fully finished.
- The asking price may be too low for the tax authorities.
- You are not allowed to rent out.
It is therefore advisable that you seek advice before making your purchase. That way, you will know what you are getting into.
Are you planning to invest in a bank foreclosure in Spain? Then first take contact us for a residential appointment.