Real Estate Servicer Trends 2020

Real estate servicers have been gaining increasing importance in Spain, especially since the 2007 crisis, through which major Spanish banks accumulated a considerable stock of homes that their clients could not pay for. But you might wonder what real estate servicers are and what their role in the economy is. We tell you all about it below.

What real estate servicers are and how they work

Essentially, they are external companies to banks that absorb loans associated with a real estate asset. Their purpose was to sell these homes at attractive prices and good financing conditions to remove them from the banks' asset portfolios as soon as possible, although their functions have evolved, growing in structure, capabilities, and professionalization.Today, servicers also manage new construction homes, private flats, and even land to later build premises, shopping centers, or hotels. As of 2018, these companies managed over 750,000 assets, slightly less than 28% of the total stock at that time.Among the services that real estate servicers provide to financial institutions are property recovery (in case the client cannot meet the mortgage), judicial and physical sanitation, maintenance, payment of fees and taxes, tenant management, valuation of the bank's real estate portfolio, property commercialization and potential client acquisition, preparation of reports on the current situation of the portfolio, etc.They also serve investment funds, especially regarding research and market studies on possible property opportunities and the management of the purchase process. The latter is similar to the market studies done for Airbnb.

The largest real estate servicers in Spain

In our country, there are several real estate servicers, generally one for each considerably sized financial institution, although among the main ones, the largest is Altamira and belongs to Banco Santander. It has assets valued at over 54 million euros, which represents a market share of 22%. The 41 million euros in assets managed by Servihabitat make it the second-largest servicer in the country, 17% of the market. In third position, we would have Haya, from Bankia, managing 39 million and a share of 16%. Both Aliseda and Anticipa, from Banco Popular, which was later acquired by Banco Santander, represent 14% of the market.

Changes and trends for 2020 in real estate servicers

For 2020, real estate servicers are expected to significantly accelerate property sales, as a market slowdown is feared after showing signs of cooling down in recent months, in addition to the effects of changes in the LAU (Urban Lease Law), which mandates 7-year contracts, updating rent only with the CPI. To achieve this, mortgage foreclosures are increasing, and homes are being sold even before evicting the defaulting owner. Thus, it can be understood as the end of the cycle for funds that arrived in Spain after the crisis and have already achieved the expected profitability.Servihabitat has increased its offer of ready-to-sell assets by 28%, as has Haya, which offers properties with up to a 40% discount, although located in areas with low demand. Discounts, generally averaging 30%, have also recently been applied by other servicers such as Altamira, Solvia (from Banc Sabadell), and Aliseda.

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