# Buying a repossession property



## piersuk (Nov 13, 2015)

I wonder if someone could help with a step by step guide or experiences with buying a repossession property?
We are over in March and April to look at several bank repossessions. I understand the issues with subsequent tax bills and debts on the property but my questions are more direct than that, for instance.

When should we approach a solicitor?
What should we be seeking from the lawyer early on?
How/When should we discuss mortgages? Some banks offer 80% whilst others 100%.

anything else that would help on our way.

Thanks
Pedro


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## xicoalc (Apr 20, 2010)

You can still get some bargains from the banks but you should be very careful.

Usually the procedure would be to view the property and then if you like it you make an offer and pay a small deposit (say 3000 or 5000 euros) for them to take it off sale. I would instruct a lawyer at this point before you hand over any cash.

In general (but check before you hand over any money) the banks will refund your deposit if they cannot offer you a mortgage. I would however ask them to study your circumstances for a mortgage asap and then at least you know if they are likely to give you one and on what terms.

Your lawyer will do the appropriate checks for debt, the deeds, permissions and so on but in addition there are other things to take into account. Most bank repossessions have had the water and electricity supply disconnected. Once a permanent disconnection has taken place you have to go through a process to get reconnection and one thing you will need it a certificate that the house is habitable from the local town hall as well as (usually) the electrics and plumbing certifying as safe by a sparky and plumber (again you have to check).

I came very close to buying a repo a while back but as is often the case the kitchen had been removed. This would mean new kitchen before the council will give the certificate as the house has to have certain things (place to cook, clean, shower etc).

I also found out that the septic tank did not meet modern standards and so was unlikely to pass the inspection. This would have meant that just to get light and water I would have had to spend thousands on a new septic tank, put in the kitchen, do any required work on the plumbing and electrics JUST to get it connected to the grid.

So you should be instructing a lawyer asap to check his side of things and all the paperwork and probably a technical architect to inspect the property for your peace of mind and also for the purpose of acquiring the right certificates and if the house is up to spec (if the cert is needed of course).

THEN... this is when I would pay my deposit and reserve the house and not before.

You just have to be very careful and make sure you have the right people working for you when buying any property but more so from a bank.

Finally, on the 100% mortgages check the terms. Some will even pay the gastos (taxes and legal fees of around 10%) and add this to the loan but check the terms, rates (especially after any low price initial year or two) and penalty if you do want to move your mortgage elsewhere at some point down the line.

Good luck!


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## piersuk (Nov 13, 2015)

Firstly, thanks so much for great answer which clearly has taken some time to write. I'm very grateful.

Just a couple of questions if I may



xicoalc said:


> Usually the procedure would be to view the property and then if you like it you make an offer and pay a small deposit (say 3000 or 5000 euros) for them to take it off sale. I would instruct a lawyer at this point before you hand over any cash.
> 
> In general (but check before you hand over any money) the banks will refund your deposit if they cannot offer you a mortgage.


Are you saying this 3k-5k should not be handed over at this stage? Or is this deposit that is returnable if things change ( I will of course check, but just based on your experience)




xicoalc said:


> I would however ask them to study your circumstances for a mortgage asap and then at least you know if they are likely to give you one and on what terms.


We are looking at 4 possible properties, all of which are apartments, unfortunately with three separate banks. Is there a process to approaching them with a view to mortgages in these circumstances. We have been told to take our various payslips, P60's and bank statements with us.



xicoalc said:


> Your lawyer will do the appropriate checks for debt, the deeds, permissions and so on but in addition there are other things to take into account. Most bank repossessions have had the water and electricity supply disconnected. Once a permanent disconnection has taken place you have to go through a process to get reconnection and one thing you will need it a certificate that the house is habitable from the local town hall as well as (usually) the electrics and plumbing certifying as safe by a sparky and plumber (again you have to check).


We have been advised on each that water and electric have been disconnected. Costs suggested as being €1300ish for reconnection. What is the name of the certificate that is required to show house is habitable from town hall? 



xicoalc said:


> I came very close to buying a repo a while back but as is often the case the kitchen had been removed. This would mean new kitchen before the council will give the certificate as the house has to have certain things (place to cook, clean, shower etc).


All the properties have kitchens and bathrooms but three do not have cookers fitted but have the hole for it, is this just a case of adding a cooker to fulfil this criteria? Again it seems a bit of a circle whereby there is no running water so how can you wash.



xicoalc said:


> So you should be instructing a lawyer asap to check his side of things and all the paperwork and probably a technical architect to inspect the property for your peace of mind and also for the purpose of acquiring the right certificates and if the house is up to spec (if the cert is needed of course).
> 
> You just have to be very careful and make sure you have the right people working for you when buying any property but more so from a bank.


The properties we are looking at are northern Costa Blanca, Moraira and surrounding areas. I notice you are on the CB as well. Do you have a recommendation for English/Spanish lawyer? (PM is fine to comply with site rules). Just looking for some recommendations.



xicoalc said:


> Finally, on the 100% mortgages check the terms. Some will even pay the gastos (taxes and legal fees of around 10%) and add this to the loan but check the terms, rates (especially after any low price initial year or two) and penalty if you do want to move your mortgage elsewhere at some point down the line.


Comes back to what was said above, is there a process for this..

Be really keen to know the differences between the licence of habitation and second licence of habitation and names of some of these other processes on the way.

If I'm successful, or not, I intend to write a guide. Bound to help others.


Once again, thanks ver much for your help.

Ped


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## Guest (Feb 24, 2016)

piersuk said:


> Firstly, thanks so much for great answer which clearly has taken some time to write. I'm very grateful.
> 
> Just a couple of questions if I may
> 
> ...


Please see my replies in bold.


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## ponyriver (Feb 3, 2016)

I know one thing you should ask,Has it got planning permission.My friend got caught out by this.


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## piersuk (Nov 13, 2015)

Lovely, thanks. 

We anticipated the affirdabilty aspect and have already prepared the pay slip and P60's.

It's good to read, if I reading correctly, that issues can be overcome. Is the €500 sum refundable pending solicitor searches or certificates not being in place?

When you say "a large deposit with the bank" what are you talking? The places we are looking are €70k-€90k. We have €25k which we could lodge with them.

"Pony river" I'm told that they would be listed as not legal if this were the case, of course we would check though, good call.

Thanks

Ped


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## Guest (Feb 24, 2016)

piersuk said:


> Lovely, thanks.
> 
> We anticipated the affirdabilty aspect and have already prepared the pay slip and P60's.
> 
> ...


Not in our case.


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## xicoalc (Apr 20, 2010)

piersuk said:


> Firstly, thanks so much for great answer which clearly has taken some time to write. I'm very grateful.
> 
> Just a couple of questions if I may
> 
> ...



It is, as far as I believe not refundable UNLESS you cannot get the mortgage. You would need to check the exact terms with the bank. DO NOT part with cash until you are sure all is ok. Other say 500 euro, this seems cheap, I was doing this literally last month and they wanted 3000k






piersuk said:


> We are looking at 4 possible properties, all of which are apartments, unfortunately with three separate banks. Is there a process to approaching them with a view to mortgages in these circumstances. We have been told to take our various payslips, P60's and bank statements with us.


Are you resident in Spain or the UK? If you are not a Spanish resident then the % will be lower. You will also need a copy of your UK credit file if you are not resident for at least 5 or 6 years.

Always best to ask the specific bank their terms. I doubt 80 to 100% will be available if you are not established in Spain and resident



piersuk said:


> We have been advised on each that water and electric have been disconnected. Costs suggested as being €1300ish for reconnection. What is the name of the certificate that is required to show house is habitable from town hall?


Already answered by another here



piersuk said:


> All the properties have kitchens and bathrooms but three do not have cookers fitted but have the hole for it, is this just a case of adding a cooker to fulfil this criteria? Again it seems a bit of a circle whereby there is no running water so how can you wash.


I believe that the requirement would be a sink with fitted water and drainage but local rules may vary



piersuk said:


> The properties we are looking at are northern Costa Blanca, Moraira and surrounding areas. I notice you are on the CB as well. Do you have a recommendation for English/Spanish lawyer? (PM is fine to comply with site rules). Just looking for some recommendations.


I dont like to recommend anyone for things like this but I will say always go Spanish. Many speak English and if not you can take a translator but in my experience, using Spanish professionals is the best way to go



piersuk said:


> Comes back to what was said above, is there a process for this..
> 
> Be really keen to know the differences between the licence of habitation and second licence of habitation and names of some of these other processes on the way.
> 
> ...


The license of habitat is granted when a property is new. Second license is if required for other purposes later down the line (such as when the electric has been cut off). Just means if the house has never been granted then its the first and if it has then its the second!


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## piersuk (Nov 13, 2015)

Thanks. No not estbalished in Spain, we are in the UK. We've been advised that 80% would be available subject to T&C as an overseas buyer. 
Are we reliant on the agents directing us to the bank. Here [UK] we would of course go and get our mortgage offer in principle.

Sorry for daft questions, up until we started to consider repossession properties we were set to save for the next 5 years to buy outright.

Thanks
Pedro


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## snikpoh (Nov 19, 2007)

ponyriver said:


> I know one thing you should ask,Has it got planning permission.My friend got caught out by this.


This is what the habitation licence (cedula) proves as stated previously.


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## xicoalc (Apr 20, 2010)

piersuk said:


> Thanks. No not estbalished in Spain, we are in the UK. We've been advised that 80% would be available subject to T&C as an overseas buyer.
> Are we reliant on the agents directing us to the bank. Here [UK] we would of course go and get our mortgage offer in principle.
> 
> Sorry for daft questions, up until we started to consider repossession properties we were set to save for the next 5 years to buy outright.
> ...


I hope you can get 80% being outside of Spain but I think this is going to be hard. Apart from Banco Popular (and i may be wrong) but no others cover gastos which means you will need to allow 10% for this. If you are using an agent they may want a fee. To be honest though why would you use an agent when the banks all have their own websites for their properties and most will have english speaking staff...? And, if you are using an agent they should be providing you with a lot more info than you seem equipped with.

Mportage offers in principle apply in Spain too and when I was looking at a repo I spoke to the bank in advance who said "yep, based on this info we will give you up to X euros and X% ltv" 

Never trust an agent or intermediary , always instruct your own lawyers and professionals!


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## moskovsky (Feb 19, 2016)

piersuk said:


> Thanks. No not estbalished in Spain, we are in the UK. We've been advised that 80% would be available subject to T&C as an overseas buyer.
> Are we reliant on the agents directing us to the bank. Here [UK] we would of course go and get our mortgage offer in principle.
> 
> Sorry for daft questions, up until we started to consider repossession properties we were set to save for the next 5 years to buy outright.
> ...


Hi. 
We came in October last year, like you, with a view to buying a repossession. We viewed 3 properties and as mentioned before, realised that there was a lot more expense involved to bring them up to standard.
We made an appointment with a fantastic lawyer in Gandia, Carolina Just Miro who is fluent in English. She has had a lot of experience in repossession properties and actually advised us to find a town we liked and visit agents in that town as there were a lot of bargains to be had without the hassle of reconnection of services and installing kitchens etc.
She was absolutely right. We have since purchased a nice 3 bedroom flat with roof terrace in Ontinyent for a lot less than any of the repossession we viewed and with a lot less hassle.
Her charges were a lot less than any other lawyer we contacted and she gave us her best attention.


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## peedee (Aug 30, 2015)

moskovsky said:


> Hi.
> 
> We made an appointment with a fantastic lawyer in Gandia, Carolina Just Miro who is fluent in English. She has had a lot of experience in repossession properties and actually advised us to find a town we liked and visit agents in that town as there were a lot of bargains to be had without the hassle of reconnection of services and installing kitchens etc.


Also used Carolina and would recommend


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## piersuk (Nov 13, 2015)

peedee said:


> Also used Carolina and would recommend


Thanks for the information. I have just emailed her.

Pedro


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## moskovsky (Feb 19, 2016)

piersuk said:


> Thanks for the information. I have just emailed her.
> 
> Pedro


Good for you. You won't regret it if you go with Carolina. Not only will you have an excellent lawyer but you will end up with a very good friend.


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## piersuk (Nov 13, 2015)

*Lawyer Javea / Moraira*

Can anyone suggest a good lawyer in the Javea / Moraira area, we were going to to use Carolina Just up at Gandia but this seems a long way when there may be others a little closer. I really don't have a problem using Carolina if she is the best option but I thought I would ask to see if there are others with positive experiences locally. 

I should add this is a lawyer to for buying a home. Not a repo.

Thanks Pedro


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