Guide to real estate auctions

What is an auction and what types are there?

An auction is a good method to acquire a home at a lower price than it has on the market. This discount can be as high as 20%. In general, they are homes that have been repossessed and accessed through the courts. Little by little, online auctions organized by companies have become popular, which only require registering and paying a prior deposit, which is usually 1% of the starting price of the house.

How is the price of the house calculated and what is the minimum bid?

According to the new Civil Procedure Law that regulates everything related to auctions in articles between 655 and 675, there is no minimum starting price. However, if the potential buyer offers 70% of the price of the property, the property is awarded to the highest bidder, although there is also the possibility of offering only 50% of the price.

How can I find out when and where the auctions take place?

Information on when and where auctions are held can be obtained through the courts, auction catalogs or through specialized companies. The Network also contains documentation on them.

Who can bid in an auction?

Any person who is not affected by any impediment or legal restriction can participate, excluding officials and personnel directly related to the auction file.

How can you bid in an auction?

At public auction, participation can be face or through a sealed envelope. In the event that you opt for the latter method, the offer must contain the details of who is making the bid, the amount offered in letters and numbers, the signature, and a check made up of the deposit. In online auctions, it is required to be registered to be able to bid on the web addresses enabled for a period of approximately 4 to 6 weeks.

What information can you have about the home before going to the auction?

The first thing is to visit the property and obtain the maximum information about the taxes required by the Property Registry. Through the web page. you can request a sample copy of the property, which contains the information about the owners and the possible pending charges.

Do I have to pay to participate in an auction?

To participate in an auction, you must pay a bond or deposit that will be returned in case of not finding the house, except for the one who has won in the bid, since that amount is a signal that is deducted from the rest of the money that you will have to pay. . This sum, which is usually 30% depending on the type of auction, is paid before the auction is held.

Once the house is obtained, there is a period of 20 days to deposit the rest of the offered price in the court's account. If you do not have cash and the purchase is going to be financed, it is advisable to have previously negotiated with the bank the possibility of obtaining a mortgage.

What taxes do you have to pay when you buy a flat at auction?

In the case of new construction, 7% VAT and 0.5% AJD (Documented Legal Acts). If it is second hand, 6% of the ITP (Tax on Patrimonial Transmissions), less in Aragon, Balearic Islands, Catalonia, Galicia, Madrid and Murcia, where this tax is 7%. In both purchases, the notary and registry fees must be paid.

Who has to pay the burdens on the auctioned home?

It is important to bear in mind that the person who definitively acquires the home must take charge of the pending debt that is collected in the Property Registry since it is not settled at the price paid at auction.

In addition, it must respond to the expenses of the Community and the IBI (Real Estate Tax), that is, the cost of the value of the ownership and other real rights that fall on the new owner of the home, referring to the months of the year in the course and the year prior to the auction if they were not paid.