Real estate auctions or foreclosure auctions are increasingly sought after by those looking for good real estate deals with values up to 20% below the market. The real estate auction system is also considered very exciting by its fans, as the dispute is usually fierce to ensure the purchase of the best goods.
However, if you have decided to participate in an auction of real estate, you must have availability and knowledge regarding the goods that will be auctioned and therefore this practice is considered rather laborious. You need to be able to:
Even after so much work you should keep in mind that going to the real estate auction will not always the desired property will be sold, this will depend on the bids that will be given by the various stakeholders.
Delinquency is the main cause of the growth in the number of properties that go to auction throughout the country. Some legal parties are very severe when it comes to the defaulting borrower, in the case of contracts in which the fiduciary alienation is foreseen. With a delay of 3 months in the installments, the bank can already contact the owner informing that the property will be taken to auction.
1) Be aware of all the information contained in the public notice
The auction notice can be considered your shopping guide, in it you will find all the important information about the properties that will be auctioned and about the negotiation:
• Description of conditions of sale;
• Description of the state of conservation of the property;
• Minimum price of the property;
• Contract model;
• Auctioneer’s commission;
• Payment conditions;
• Taxes that must be paid.
Remember in case you give the winning bid and, as a result, giving up the purchase will be subject to arrest, payment of a fine and an impediment to attending auctions for up to one year.
2) Property values
Always research real estate values, not always the evaluation of the auction process.
3) Choose vacant properties
To avoid future legal problems, opt for vacant properties. Attention: 90% of the properties that go to the auction are still occupied, meaning the former owners have not yet been evicted. When you finish a real estate, you receive a letting letter that allows you to request a vacancy. However, it is common to have appeals against the execution and foreclosure of the property that will be analyzed by the courts and it may take many years for the eviction to occur.
4) Know the best form of payment
In the auction announcement you will find all the rules about the terms of payment. Know more:
• You must pay the 05% of the additional commission to the auctioneer;
• In general, the value corresponding to 30% of the property must be paid in cash;
• If you choose to finance the remainder of the property, you must obtain the line of credit before the auction.