Romanian banks to sell more foreclosed properties in 2013

Newsroom 07/12/2012 | 14:42

Buying a residential property in Romania can be at least 25 percent cheaper when the seller is the bank. The number of foreclosed homes has been going up in recent months and the trend will be maintained in 2013 in direct relation with the number of nonperforming loans reported by banks, Adrian Erimescu, CEO of Imobiliare.ro told BR.

“We expect banks to make more effort to capitalize on real estate collaterals for bad loans which will mean more auctioned apartments/houses in 2013. Banks can’t postpone debtors for ever especially when most bad loans have already been rescheduled”, he explained.

If up until now the foreclosed home auctions were mainly targeted at investors, starting 2013, banks are expected to focus on individuals, added Erimescu. “However, targeting individual buyers is a challenge because the foreclosure process is very emotional both for the debtor and for the potential buyer. Moreover, individual buyers are not educated with regard to the acquisition of auctioned properties. It also creates a logistics problem for banks which have to find resources to handle  selling and marketing on the real estate market, something which is different from retail lending,” he explained.

Buying a foreclosed home can be 25 cheaper (starting with the second stage of the auction) than the initial evaluation, he explained. “What is important for a potential client is to negotiate directly with the bank, to contact the bank and make a direct offer (…),” said the Imobiliare.ro CEO, explaining that this can be below the bank’s asking price.

Foreclosed apartments available for sale are in line with the general residential offer and are available both downtown and on the outskirts of Bucharest. “We are mainly talking about old apartments with one and two bedrooms. There are also houses and land plots which are being auctioned. The main difference between foreclosed properties which are auctioned and the rest is the price  – at least 25 percent cheaper starting with the second stage of the auction,” he said.

 

Where to get information about foreclosed homes

Information about foreclosure auctions is available on the banks’ sites as well as on dedicated sites. For example Raiffeisen Bank has a dedicated application for its offer available at www.vanzari.bunuri.raiffeisen.ro. Asking prices start at EUR 20,700 for a 37 sqm one-bedroom apartment (1970) in the Ferentari neighborhood and can go up to EUR 164,250 for a 170sqm three-bedroom property (2007) in Lacul Tei,  according to information available on the site.

Imobilare.ro promotes the offer of several banks and believes “it is only a matter of time” until it will work with most of the “large players” on the market.

In 2013 we expect that all the banks will promote foreclosure auctions on their own sites and on dedicated real estate and auction platforms. Collecting the information and presenting it at a level which is satisfactory for the potential client remains a challenge, but we have seen some progress in this direction,” he said.

Overall, 2013 should see more transparency on this market and potential buyers should have easier access to information, he concluded.

Simona Bazavan

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