When you don’t have a large budget for the house you’re looking for, you can try to buy it at a real estate auction.
You can get some great deals, both to buy a house to live in and to buy one as an investment.
The starting price of a property at auction is certainly lower than the market price and, in the case of a judicial auction, the price can drop further if there are no further offers.
It is therefore important to know how to participate in an auction in order to understand when is the right time to raise the bid or wait to be able to win it.
The procedure for participating in an auction is meticulous and it is important to know what and how to proceed in order to avoid making mistakes.
This is where the figure of the professional comes into play who, through delegation, can take care of all the phases in order not to waste time and money.
WHAT MISTAKES CAN BE MADE
There are various mistakes that can be made and I want to address some that I consider particularly important:
-not analyzing the appraisal
-not getting the mortgage
-occupied property
One of the first mistakes that can be made is not having carefully analyzed the appraisal.
In fact, a property at auction IS NOT a property, from a land registry and urban planning point of view, that is definitely “in order”.
The appraisal reports the state of the property in which there may be abuses, the state of the places, any non-conformities present and any information to identify the actual state.
If it is not analyzed thoroughly, it is possible to find yourself with surprises, which beyond their resolution (not always possible), can still cost a lot of money.
A second mistake is not asking the Bank in time for certainty for the disbursement of the mortgage.
In fact, if the property were awarded and the mortgage had not been approved, you would lose the 10% deposit paid and the property itself.
As a third mistake, it is not checking whether the property is occupied or not.
For example, if the occupant has a regular rental contract, by law, he is required to end the contract at the first expiry.
You already know this information from the appraisal and therefore before purchasing the property.
It can often be an advantage because, if you do not need to go and live there, you can receive the income from it.
If, on the other hand, the property is occupied by the person being executed, as a preventive measure, you can make sure that he already has an idea of where to go, once he has obtained the decree of transfer of ownership and therefore know that he will vacate the property once the auction is concluded.
We always recommend that you inspect the property before participating in the auction so as to verify the presence of occupants, as well as the actual conditions and understand whether it can be an element for you to discard the property or simply proceed with the process.
WHO TO TRUST FOR A SAFE PURCHASE AT AUCTION
The procedure for preparing and participating in an auction is quite complex and can lead to errors that can result in the loss of money and the property.
Anyone can participate but given the rather complex procedures, a professional will be able to give you all the support you need.
Especially for the online auction, errors can occur in the compilation such as entering the wrong price offered or the reason for the bank transfer to be paid or simple personal data.
There are many others and it can really become, as it is, a real job that you may not be able to afford to do.
I recommend that you rely on a professional: Notary, Lawyer, Accountant or Real Estate Agent able to follow for you and with you all the phases of the auction itself so as not to miss your opportunity, once you have chosen the property you want.
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