Distressed properties in Spain are the result of recent changes in the local regulations and tax adjustment, forcing foreign investors to leave them off-plan due to improper funding or inability to afford adjustments in mortgage payments.
According to the Spanish real estate market, a large percentage of real estate investors are British and a large number of them have sold their properties at very reduced price. This situation has led to increasing distressed property sales in Spain that benefit new investors.
Therefore, repossession also affects local investors and the process is quite different in comparison to other countries.
In Spain, the failure to repay a mortgage is directly dealt with the Banks, which are the common lenders. Once a distressed property falls into repossession, it is sold to the first bidder and that enables true bargain prices for buyers and big loses for the original owners.
Even though, the nature of distressed property sales in Spain is to get rid of a property quickly before repossession occurs. In some other cases, investors put a deposit down on ongoing real estate projects with the hopes of selling these properties before the project is complete.
However, unfinished properties are not easy to sell, and a new distressed property is sold every day for a fraction of the cost to allow the owner to move in a new direction.
Distressed properties in Spain are a good option for investors with previous experience in the housing market or those who want to invest in real estate with limited capital. Even though the advice of a financial expert is always a big aid to help avoid a fall into costly mistakes with properties about to be repossessed, many people ignore this option.
While people keep experiencing financial difficulties to repay their mortgages, distressed properties are an option for overseas investment in Spain at very affordable prices.
Mark Stucklin (Spanish Property Insight)
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Distressed property - its a realty! 
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