An alternative way to buy a house, despite being little used, is to participate in real estate auctions, saving on the market figures, but, to move safely, you need to know the regulations well and know how to proceed.
The judicial real estate auctions concern the forced sale of a property owned by the executor, the person who, due to his outstanding debts, undergoes the expropriation of the property in order to obtain liquidity to satisfy creditors.
Any natural or legal person can participate in the auction, with the exception of the debtor.
What are the essentials of real estate auctions?
ADVERTISING
It is mandatory to publish the auction sale of a property by: posting for at least three continuous days in the register of the court where the executive procedure takes place, publication on special websites and newspapers at least 45 days before the expiry of the deadline for the submission of offers.
VISIBLE DOCUMENTS
– Notice of sale: official document with all information relating to the property, date, time and place of the auction, the basic auction price, the minimum bid and how to participate.
– Expert report: it indicates all the information relating to the property (value, floor plan, cadastral data, conditions, presence of irregularities or building abuses, debts towards the condominium), and whether the accommodation is vacant or occupied by the executive owner or by third parties and in what capacity.
– Order of the judge: it establishes the conditions and terms of the auction sale.
The foreclosed property is entrusted to the judicial custodian who conserves, administers and manages the property. It is therefore necessary to contact him to visit the property.
AUCTION WITHOUT ENCHANTMENT AND WITH ENCHANTMENT
In the sale without auction, the most widespread, the participants present their offer in a sealed and anonymous envelope, the amount of which must not be less than a quarter of the base price, together with a deposit of 10% of the proposed price. The offer presented is binding, if it is the only one, the bidder will be obliged to purchase, under penalty of forfeiture of the deposit. In the absence of offers, the judge orders a new auction with a reduced price of up to 25%. In the event of multiple valid offers, a tender is held between the participants with the base price given by the highest offer.
In the sale with enchantment, arranged if the sale without enchantment is ineffective, the participants submit their application in a sealed envelope, together with a deposit indicated in the notice. A tender is held, with pre-established minimum bids, which ends when 3 minutes have passed since the last bid. An offer increased by 1/5 of the price reached in the auction may be submitted within 10 days of the award, which leads to another tender between the new bidder, the provisional successful bidder and the participants in the previous sale. After this deadline, the award becomes final.
PAYMENT OF THE PRICE
The successful bidder is required to pay the award price, less the deposit paid, within the deadline and in the manner indicated in the notice of sale, by bank transfer or by opening a mortgage loan. In the latter case, the bank loan must be defined by the deadline for the balance. There is an agreement between the Italian Banking Association (ABI) and the courts for the granting of subsidized mortgage loans, which cover up to 70-80% of the estimated value or the hammer price of the property if the amount is lower than the first.
What are the pros and cons of real estate auctions?
BENEFITS
• The property can be purchased at a lower price than the market price.
• If the auction goes empty several times or the minimum price is not reached, the property will be put up for auction after a few months at a further reduced price.
• The appraisal guarantees maximum transparency on the state and conditions of the property.
• With the transfer decree, the enforcement judge frees the property from mortgages and foreclosures.
CAUTIONS
• Given the complexity and riskiness of the procedure, the assistance of a competent professional is recommended.
• Make sure you have financial coverage or can access a mortgage, within the terms set out in the notice of sale.
• Read the appraisal very carefully, or rather have it read by an expert, to verify problems and sanitization of any building abuses.
• Check if the property is occupied, by whom and for what reason. Release from the former owner or relatives may take time. In the presence of a regular lease, it will be necessary to wait for it to expire.
• The execution judge cannot cancel some burdens such as usufruct, housing, criminal and judicial kidnappings, etc.
Although the presence of a lawyer is not mandatory, given the complexity and riskiness of real estate auctions, the assistance of a competent professional is recommended.
If you want more information for the purchase of a property at auction, contact us for a confidential consultation at 3474757276 or write to info@capriimmobiliare.it
