Spanish bank repossessions 10% more expensive concludes study09/01/2014
A study by a Spanish banking association concludes that bank repossession properties are on average twenty percent more expensive than properties sold on the open market.
The association of Users of Banks, Savings Banks, and Insurance (Adicae) looked at 96 properties offered by six banks.
It found that in many locations banks were charging a huge premium for the “privilege” of mortgage finance, effectively undercutting local agents while at the same time making a large profit from consumers unable to find comparable lending terms on the open market.
In one case a property was priced at 132 percent above comparable properties in the area.
Interestingly the problem is more acute for local agents than for our readers in the overseas property industry. Buyers in coastal areas are more likely to be international and to have higher deposits or buy cash meaning banks have less pricing power.
Property stock in coastal areas also has a higher proportion of developments which have never been occupied which banks are keener to sell off in bulk which is another check on bank repossession prices.
The fact remains that any self respecting international agent would not touch the vast majority of stock on banks’ books.
However, due to the lack of property information and photos on bank websites, it can be difficult for consumers to compare “like with like” which is confusing and increases the sales cycle for the industry.
It’s not just banks competing unfairly on financing which is inhibiting international sales, its incompetent marketing too.
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