I want to bring to everyones attention a possible "scam" if I can use the word. Please remember "Buyer Beware".
I was this week introduced to a client who was looking for some advice re buying property and financing it. She had been shown what she was told was distressed property here in Marbella that had been repossessed by a financial institution (no names - not that they are culpable). Apparently the company showing her specialises in distressed sales and they were selling 40 apartments in the complex at greatly reduced prices. She was being offered an apartment for approx 435,000€ which was allegedly approx 200,000 under bank valuation. The lady asked to be shown some paperwork relating to the repossessions as it is quite a high profile named bank that is supposedly possessing. The persons showing her were unable to produce any corroborating papers or the valuation certificate although she was told it would be made available later. Additionally while the apartments are finished she was not told which specific apartment she would be buying - there was a choice of 40 and she was being asked to take a giant leap of faith as to what she would end up with.
Thankfully she deferred making a decision and happened to wander into a local agents office later in the day. Quite by coincidence the agent in question has listed an apartment in the urbanisation of equivalent dimensions - same facililities, number of rooms, terrace etc. This was in fact a private sale at 345,000€ - pre negotiation. Now I dont know who determines the level of distress as I am not an agent but I have to say that the property would not be the only thing distressed if I had ended up buying something like that. I have no doubt that she would have been pretty distressed too.
It seems to be the flavour of the month - the term "Distressed Sale" would infer that one is getting a bargain. I have to say that I have been extremely fortunate in the property transactions I myself have been involved in here and I have been in the right place at the right time, but I have always managed to get direct to the buyer via a friend or something or I have been steered in the right direction by a couple of business contacts. I have not been shown the property by an agent and circumvented them, they have been genuine deals that have been offered to me, that I would not wish anyone else to take advantage of - why would I, I am a greedy person. If it is such a good deal I am always going to go for it myself!!! The point I am trying to make is that generally speaking why is someone going to be so generous to offer you, a complete stranger such a good deal?
Genuine distressed property is largely speaking offered on the QT to a friend of a Notary or bank manager etc and repossession levels here are very low as Spanish mortgage lenders are very conservative when it comes to assessing risk. I have had two distressed property experts contact me in the last couple of years to offer me "distressed sales" but when I have been shown what is available I have done my research and found that they are only offered at market price or in one particularly ridiculous case 15% more than it was in a local agents window.
I have no doubt there are some genuinely distressed sales out there - just be careful before you commit to anything. Dont take their word for it that it is a spanking deal and dont forget it is not that difficult to forge documents - especially in this day and age.
Rgds