A guide to buying a property at auction

Buying a property and then renting it is one of the ways to make a living, that is, to earn without working. There are many properties available on the market, on many of these, you can save money, for example on auction properties.

By purchasing a house at auction, the savings can be around 20% of the market value, but the discount could even reach 25% or more if the house remains unsold after the first auction.

However, the sale of these houses has drastically decreased in recent years, as highlighted by the Revenue Agency which calculated a negative trend in 2013 compared to 2012. The reasons are multiple: the granting of a mortgage by the bank remains a utopia for many, the lack of liquidity, the crisis of recent years. An important fact that slows down the buying and selling of houses at auction is the widespread prejudice of Italians towards this type of market, above all, there is fear of procedures deemed not very transparent and of speculators.

To counter this prejudice, the National Council of Notaries and 11 other associations have developed a Guide entitled "Buying at auction: an alternative and safe way to buy a house" which offers useful information and advice to help you find your way around the purchase and overcome reluctance.

This is a guide to real estate auctions, conducted electronically or traditionally, which addresses the issues that are most dear to buyers: how to participate in the judicial auction, what are the phases of the auction, the characteristics of telematic auctions, follows a section dedicated to FAQs, ie the most frequently asked questions.

The guide explains the procedure for real estate auctions. First of all, the starting price is established by an expert opinion ordered by the judge who then decides the conditions and terms for the auction. It is necessary to know that all the documents concerning the auction, including the appraisal, can be consulted in court by all interested parties. The notice of the auction sale must then be advertised in various ways, including posting for at least three days in the register of the court that manages the file and publication on its website as well as any publications in local newspapers and national, flyers, etc.

The guide closes with ten useful tips for those who want to buy properties at auction, for example trying to understand when the property will actually be available, always visit the houses you want to buy, take into account the tax benefits, and other useful tips to orient yourself in the world of real estate auctions.

Ten useful tips

To clarify any doubts, before participating in a real estate auction, it is advisable to contact the registry of the execution judge or the delegated professional or rely on a lawyer.

1. Do
   not assume the convenience of the priceEven if the price of the property can be much lower than the market value, it is better not to assume that the allotment amount is always affordable.
2. Evaluate your times
   Consider whether or not you have an urgent need to dispose of the property, times are not always predictable.
3. View all available documents
   It is very important to view the notice of sale, the appraisal report, floor plans, photographs and all documents published on specific websites at least 45 days before the auction.
4. Read the appraisal
   The appraisal also specifies the constraints and charges that will be canceled and those that will remain the buyer's responsibility.
5. Visit the properties
   Before the auction, with the help of the custodian appointed by the execution judge, it is essential to visit the property to become aware of the aspects not mentioned in the appraisal.
6. Define the maximum limit of the amount you want to invest
   Decide how much you are willing to spend before participating in the auction, so as not to run the risk of being carried away by emotion and expose yourself more than necessary.
7. Find out about the expenses.
   Be well informed about the expenses that you will have to incur in addition to the hammer price.
8. Pay attention to the payment methods
   If you buy at auction, you must have the requested amount quickly or you must get a mortgage issued in time, bearing in mind that there may be difficulties in instructing the practice.
9. Take into account the tax benefits
   The same benefits as for real estate transfers apply to assets acquired with real estate auctions. Remember that the desire to take advantage of tax breaks must be expressed at the auction or, better still, at the end.
10. Attentive to occupied properties
    In case of difficulty, for example, if the property is occupied without a regular rental contract, the new owner will have to provide for the eviction at his own expense, by contacting a lawyer who will proceed with an immediate release through a bailiff.

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Buying a house at auction can be an excellent investment, with this Guide you can be more informed and aware.