BUYING FLATS AT AUCTION: HOW DOES IT WORK?

Surely this isn’t the first time you’ve heard about the existence of apartments at auction, right? And it is that in recent years the stock of properties at auction has increased due to the fact that banks have increased the number of foreclosures.

Currently, many interested buyers question some doubts about the operation of this type of operation since, since the property is at auction, the price at which it can be acquired is usually much more competitive than that established by private companies, that is, the real estate.

In this post we are going to discover how the process of acquiring apartments at auction works so that you know in detail this option for the sale of real estate that currently exists and with which you can get quite cheap prices.

REAL ESTATE AUCTIONS: WHAT YOU NEED TO KNOW
To know how the auction real estate market works, it is essential that you know the origin of these homes: they are floors of banks that, in general, have been seized from owners for not having paid their mortgage or bank loan. Therefore, due to the breach of its obligation, the bank keeps the property and puts it up for sale through the auction mode.

However, although at first glance it seems a more than reasonable and interesting option to take into account if we want to buy a flat, the truth is that the conditions that are requested to be able to access an apartment auction are not, at all, easy to do. meet nor accessible to everyone . Why? For the following reasons:

Deposit : to be able to bid for an apartment at auction of a bank entity, you must make a deposit that will allow you to participate in said auction; an amount that is usually quite high and not available to everyone.
Financing : in addition to this “entry” it is also required that prior financing be obtained that can demonstrate that you are a reliable and safe buyer, something that is currently not so easy to achieve due to the economic crisis that has hit us since 2007.
Due to the low citizen participation in the apartment auctions, the initial deposit was reduced from 20% to 5% to motivate buyers to take part in the bids; However, this measure has not succeeded in attracting the private public that, today, still prefers to carry out any real estate purchase and sale operation with a real estate agency or specialized company.

One of the reasons why the auction floor sector is so risky for an individual is that, if the winner of the bid does not finish paying or does not meet the established payment term, generally approximately 20 days, he loses the deposit and you are not entitled to a return on your initial investment.

BUYING AN APARTMENT AT AUCTION

HOW APARTMENT AUCTIONS ARE CURRENTLY HELD
Formerly, auctions were held in a room where those interested in acquiring said properties were; however, currently there are many apartment auctions on the Internet, since in this way, the attendance of a majority public has been achieved and a greater possibility that there is a buyer for the auctioned property.

In fact, the online auction is having much more welcome than the traditional auction, because it allows the companies or banks that own the properties to register the property in question together with the characteristics and other information of interest to the future buyer. In addition, these online platforms also allow you to see the evolution of the bid live.

The properties that are launched at auction usually have a very low price compared to the real situation that they would have in the market; in fact, the discount usually reaches up to 40% . And as we told you a few months ago, in some cases banks are selling homes at a discount of up to 65% .

TIPS FOR BUYING AN APARTMENT AT AUCTION
Thinking of taking part in a floor auction? It is a good option as long as you have the initial amount to be able to invest in the bid. Anyway, before launching into this sector, at Trovimap we want to give you a series of tips that you need to take into account so that the operation is beneficial for your personal interests.

SOLVENCY FOR THE APARTMENT AUCTION
The first point that you have to be clear about if you want to know how the floors at auction work is that it is essential that you are a solvent person, because as we have already pointed out previously, you must make a payment as a “deposit” the day before the bid to be able to participate in said auction. If in the end it turns out that you are the winner of it, then you must pay the rest of the amount within the established period, otherwise, you will lose the ticket.

FIND OUT ABOUT THE TYPE OF AUCTION
Another important tip is that you inform yourself well of the type of auction that is going to be carried out, since there are times when the auction of the property of the property is carried out but without the usufruct being auctioned, that is, you can become the owner of a property but it is likely that, for the moment, you cannot enjoy it because it is occupied by tenants or for any other circumstance. You always have to look at the auctions in which the property to be bid is COMPLETE .

COURT RECORD OF THE AUCTIONED APARTMENT
Another interesting point that you should assess before deciding to buy an apartment at auction is that you go to court to request the file of the property on which you want to bid. In this document you will be able to make sure if there are any legal charges or notifications about the house, an essential point to avoid future problems with current laws.

VISIT THE PROPERTY THAT IS UP FOR AUCTION
We also recommend that, before participating in the auction, you visit the property that is going to be auctioned in order to check the real state of the house and make sure that there are no tenants, but that the person who resides there is the owner sued by the bank. This step is important because if the house is rented it can cost you more than 8 months to evict it.

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