What are property auctions?
Property or real estate auctions are an opportunity to buy a property at a very low price, around 30% below the market value. Auctions permit the forced sale of a property belonging to an individual or a company, normally due to a situation of non-payment of acquired debt.
The essential elements of judicial auctions are:
- The “Perizia” (evaluation) which, in addition to containing all the descriptive data of the property, defines the basic sale price established by an expert appointed by the judge.
- The “ordinanza di vendita” (order of sale) which defines the terms and conditions of the auction.
- The “custode giudiziario” (judicial custodian) appointed by the enforcement judge who is responsible for the management, conservation and administration of the seized property.
- The “avviso d’asta” (auction notice), a public document containing information such as the place, date and time of the auction, the basic price, the amount of the minimum bids, the deadline for the submission of bids, the address of the property, etc.
What is the main information about the auction of a property?
- Prezzo d’asta: the minimum price for which the property can be sold at auction.
- Rialzo: the minimum bid increase required at the auction.
- Deposit cauzionale: to participate in the auction you must first pay a deposit (% of the bid submitted), in case of not winning the bid, the deposit is returned
- Data vendita: this is the date on which the auction sale will take place. If the auction has not ended, because it has been abandoned, there is no adjudication or it has not been able to take place due to force majeure, the judge will have to set a new date. In the meantime, the state of the auction is defined as “non partecipabile” and the property listing will not include the date of sale.
- Availability: the state of the property, indicating whether it is “free” or subject to personal or other ties. This information is included in the “perizia” of the auction.
- Court: auctions usually take place at the courthouse but can also be telematic, being conducted electronically thanks to a computer platform.
How do property auctions work and how can you participate?
There are two auction sale methods: “senza incanto” and “con incanto”. In the “senza incanto” auction, participants must submit their bids for purchase in sealed envelopes within the deadline, indicating the price, method of payment and other elements useful for the evaluation of the bid itself (and leave a deposit of 10% of the bid to be submitted). The envelopes are then opened in the presence of those who submitted offers and, if the proposal is deemed suitable, the property is assigned. If there is more than one offer considered valid, a tender is called among those interested, based on a base price equal to the best offer.
The “con incanto” method is a public auction between all the bidders. This type of auction generally takes places in case the “senza incanto” auction does not give results. During the auction, the bids are made publicly, with the possibility that each participant can bid for a higher price than the last declared. The auction is considered closed when at least three minutes have elapsed since the last bid was received and no one has made a new bid.
What are the main advantages of buying a property at auction?
The main advantage is the price, as it represents a significant saving that can reach 60% over the market price. Buying a property at auction also has the advantage of not having to pay notary fees.
On the other hand, the procedures for buying a property at auction have a certain complexity and it may be convenient to have an expert agency, to facilitate the process, avoid surprises, save time, provide you with all the information you need and have adequate advice.