BUYING Property Auction House Leeds: HOW DOES IT WORK?

Surely this is not the first time you have heard of 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 up for auction house, the price at which it can be purchased 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 to buy and sell properties 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 auction house are not, at all, simple to do. meet nor accessible to everyone . Why? For the following reasons:

  1. 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.
  2. 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 auctions of the apartments, 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 who, today, still prefer 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.

HOW APARTMENT AUCTIONS ARE CURRENTLY HELD

Formerly, auctions were carried out in a room where those interested in acquiring said properties were; however, currently there are many apartment auctions on the Internet,  as in this way, the attendance of a majority public has been achieved and a greater possibility that there will be 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 they would have on 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, 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 will have to 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 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 the 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 launched in the auction to be able 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.

FREQUENTLY ASKED QUESTIONS IN THE APARTMENT AUCTION

At this point we are going to solve some of the most common doubts that users have when accessing apartments at auction. In this way, we want to try to clear up any questions you may have about this sale and purchase operation and be able to better guide you towards the most optimal path for you and your family.

  • Where can I see the homes up for auction? There are many agencies that have bags of flats up for auction but, in general terms, it is the banks that have a greater amount of repossessed properties and, therefore, the offer will be much more varied. In any case, public administrations are one of the large property owners. They have a multitude of properties from liens or debts contracted with the administration and that means that they often also auction these properties as does, for example, the Tax Agency .
  • Is it really worth buying apartments at auction? It is a somewhat complicated question. The truth is that you can find much lower prices than those currently on the market, but it is also true that the risk is very high since you will have to pay a deposit that you can lose in the event of not being able to pay the entire amount of the bid within 20 days.
  • Can everyone participate in an auction? In general, these apartment auctions are fully open to anyone who wants to participate, be they a natural or legal person. The only condition is that the buyer is of legal age and that, obviously, he has not been declared insolvent.
  • What is the starting price of the apartments at auction? You have to know that, even if it is an auction, there is always a minimum price that must be reached so that, finally, the transaction is carried out. In the event that the bid does not amount to at least that amount, the auction will not be considered valid and there will be no owner who will keep the property.
  • How much do you have to pay to bid? In order to participate in an apartment auction, it is essential that you advance an amount that is considered a “deposit” and that will be returned in the event that you are not the final buyer. This amount proves the bond and solvency of the interested party and can range between 5% and 25% of the minimum sale price.
  • What documentation is needed to participate in the auction? You only have to present the personal data of the person interested in making the purchase, as well as the ID document. You must also inform about the property for which you want to bid and, for this, you must specify its data (address, municipality, etc.) as well as the amount of the offer you give for the home. Finally, the person interested in bidding will have to include a bank receipt proving that he has made the deposit, which is essential for the bid to be valid, without this document, the offer will be discarded. All this documentation must be presented by hand at the address specified in each auction or it can also be delivered on the same day of the auction.
  • How is it the procedure? At the moment in which all those interested in bidding on the properties have already delivered the relevant documentation, all offers will be opened and read, together with their owners, at a table made up of three members (president, vocal and secretary). The highest bid will be the one that will keep the property as long as the bidder complies with the requirements detailed above and that the amount of his offer is higher than the minimum bid price.
  • What if there is a tie? In the event that two buyers offer the same amount for a property, the winner of the bid will be the one who delivered the offer first.
  • How do you proceed to pay for an apartment at auction? As soon as a buyer wins a bid for an auctioned apartment, they must pay the rest of the amount within a period never exceeding the pre-established period. The amount you enter must deduct the entry or initial deposit that you paid to participate in the auction. In the event that the buyer is not able to collect the money from the property, it will be treated as if it were a waiver and, therefore, he will lose the money from the deposit and must also pay compensation as long as the body in charge of conducting the auction so consider it.
    [su_note note_color = »# f8de70 ″] In the case of auctions carried out by public administrations, these terms may be different as well as some of the requirements detailed above. [/ su_note]
  • And what taxes are paid on the apartments at auction? As in any other real estate sale and purchase operation, the auctioned apartments also include the payment of taxes, such as the ITP ( Tax on Patrimonial Transmissions ) and the AJD ( Documented Legal Acts ). So that you can get an idea of ​​how much this amount is, you have to calculate that, on average, the final price usually increases by 10% in order to pay these taxes.
  • Can an auction be deserted? Effectively. In the event that the bidding price has not been reached, the auction will be considered deserted and that is when the entity can begin to try to sell the apartment directly, that is, by establishing a final closed price that is usually higher. higher than what we usually find in auctions. In the event that no buyer is found, it is likely that the same property will be auctioned again with a reduced price, with discounts of up to 15%.

As you can see, the operation of the apartments at auction is somewhat complex and you must be willing to take an initial financial risk in order to benefit from more competitive prices. However, we recommend that you think carefully about all the possibilities that exist and that you value the situation taking into account your current reality, both at an economic and family level.

Apartments at auction can be a good investment for the future, but they can also be a risk that affects your economy. Therefore, think about it well and make a reasoned and conscientious decision or bet on going to the conventional real estate market.

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