Who can participate in a Real Estate Auction?

All you have to do is register to access and view all the auctions in all procedures. When they are published, a period of 20 days is established during which you can bid, as well as if other bids have been made for a specific property and the amount of the highest.

To bid, it is necessary to pay 5% of the starting price. If at the end of the auction you are the highest bidder, you are notified and you have a certain period to pay the remaining amount in court.

What are the benefits of bidding in a judicial Real Estate Auction?

The main advantage is the price at which the properties usually go and also that the award is usually lower than the market.

What are the drawbacks of bidding in a judicial Real Estate Auction?

The main drawback is the lack of information about the property you are going to buy, you cannot see its interior, only the registration information, you will not know if someone is occupying the property, if you have debts with the neighborhood community, or if the price is fits the market unless you do your own research.

The successful bidders must satisfy the payment of the remaining value of the apartment within the time frame set by the court and, in the event that you need bank financing, this process is not immediate nor can this process be expedited because loans are not usually granted on a well submitted to real estate auction.

What is recommended for bidding in a judicial Real Estate Auction?

It is advisable to carry out a series of additional checks on the information that comes in the auction portal, such as requesting a new simple note to the Registry, to verify that there are no additional previous charges.

It is also useful to talk with neighbors to gather information about the possible state of the property and thus know if there is someone occupying it.

It is convenient to compare the price of the property with that of the market to establish the maximum bid and check if you have any urban consolidation problems, especially if you are outside an urban area.
 

The hidden practice of real estate auctions

Since judicial real estate auctions are electronic, participation and verifications have been considerably facilitated. For example, the Registration Certification can be consulted through the BOE Auction Portal, leaving the Property Registry responsible for providing it through the portal, as well as the updated registry information referred to in article 667 of the LEC and the cadastral reference, if it is incorporated into the farm.

This is a very important step because before you had to go to court and check the judicial file. However, it is necessary to continue making sure of the possible occupants of the auctioned property because the majority of the courts usually introduce in the auction edict the formula that they are unaware of the possession situation. 

Bidders must make the pertinent inquiries regarding the possession status of the auctioned property on their own. You will not be able to see the interior of the property before bidding, and although the BOE auction portal publishes all the registration information, it will not know if someone is occupying the property, if they have debts with the neighborhood community, or if the price is adjusted market unless you do your own research.

To know if the real estate auction is worth it, it is advisable to carry out a series of additional checks to the information that comes in the auction portal. For example, request a new simple note to the Registry, to verify that there are no additional previous charges, such as non-payment of the IBI or the community of owners' fee. If there are charges subsequent to the award of that mortgage, they are canceled. Together with the adjudication decree, which is similar to the deed of sale, the court itself grants an order of cancellation of charges that cancels all subsequent charges in the registry.

It is also useful to talk with neighbors to gather information about the possible state of the property, to which you will not have previous access, and thus know if there is someone living there. 

Likewise, it is convenient to compare the price of the property with that of the market to establish the maximum bid and check if it has any urban consolidation problem, especially if it is outside an urban area. In the cadastre you can check the shape of the farm, confirm the part of common elements and expand information.

The auctions take place on the Auction Portal of the Official State Gazette. Each auction is endowed with a unique identification number assigned to the file in which it has been agreed, whatever the number of lots it is made of.

The electronic judicial auction opens from the twenty-four hours following the moment in which its announcement has been published in the Official State Gazette. This announcement contains exclusively the date of this, the judicial office before which the execution procedure is followed, its identification number and class, and the electronic address that corresponds to the auction in the Auction Portal. 

In order to participate in the electronic judicial auction, the interested parties must be registered as users of the system, for which it is essential to have an electronic signature certificate installed in the browser, although later on, the username and password may suffice.

The auction lasts twenty calendar days, in which bids can be sent. However, at midnight on the last day, the auction will not close until one hour after the last published bid was made, provided that it is higher than the best bid up to that time, even if this entails the extension of the bid. initial period of twenty days referred to in this article for up to a maximum of 24 hours. 

An important issue is the temporary suspension of the auction, which occurs in the event that the attorney for the Administration of Justice is aware of the debtor's declaration of insolvency, will suspend the execution by decree and will proceed to annul the auction, although this would have already started: the suspension for a period of more than fifteen days entails the return of the bonds.

There are other possible suspensions, from the promise of payment by the debtor until someone has discovered that the type of auction is wrongly calculated or that there is any defect in the auction edict. 

Another added problem is that the winner of the auction must "pay the auction" within the time frame set by the court and, in the event that it needs bank financing, this process is not immediate. Nor can this management be carried out with the entity before participating in the bid because loans are not usually granted on an asset subject to public bidding. In practice, banks do not want to take the risks involved.

Once the auction is over and the information has been received, the attorney for the Administration of Justice leaves a record of this, stating the name of the highest bidder (or so the Law says) and the position he formulated. At that time, the bonds posted by the bidders will be returned, except that corresponding to the highest bidder, which will be reserved as a deposit as a guarantee of the fulfillment of their obligation and, where appropriate, as part of the sale price. Likewise, the bonds of those who have reserved their position will be retained.

The return of said consignments (bonds) corresponds in any case to the Electronic Auctions Portal of the Official State Gazette and, in no case, to the court.

Refunds will always be made to the person who made the deposit regardless of whether he or she has acted as a bidder or on behalf of another.

It should not be forgotten that at any time prior to the approval of the auction or the award to the creditor, the debtor can pay in full what he owes to the executor for principal, interest and costs and release the seized or mortgaged assets. The third owner can also release the property by satisfying what is owed for principal, interest and costs, within the limits of the responsibility to which the property is subject.

But at all times there can be surprises even with the approval of the auction (the best price offered in the judicial auction). When the best bid offered in the auction is less than 70% of the auction rate, the executed may, within ten business days, present a third party that improves the bid by offering an amount greater than 70% of the value of the asset for auction purposes. or that, even though it is less than said amount, it is at least sufficient to achieve complete satisfaction of the performer's right.

In practice, by offering a figure that fully covers the debt, the improver keeps the award.

And if the 10 business days that the defendant has to present a higher bidder without having done so, the plaintiff may be awarded the home within 5 days with the following conditions: i) If the auctioned property is the debtor's family home , the executor may request the adjudication of the property for 70% of the Auction Type or for the amount owed to him for all concepts, provided that this amount is greater than 60% of its appraised value and the best bid. ii) If the auctioned property is NOT the debtor's family home, the executor may request the adjudication of the property for 70 percent or for the amount owed to him for all concepts (this time without other limitations), provided that this amount is higher than the best posture.

And when one believes that he has already passed all the procedures and has been awarded the property, we find ourselves with delays in the publication of the Adjudication Decree. There are courts that take a month, and there are also courts that take more than a year.

For these reasons, we have tried to explain the judicial real estate auction regime from a practical perspective. As well as the keys to electronic real estate auctions and the precautions and tricks of the last hour of the last day of the electronic real estate auction.

But in addition to judicial auctions, the practical guide analyzes voluntary real estate auctions, notarial real estate auctions, private auctions of real estate, auctions organized by private companies “specialized entity, auctions by the administration, etc. In addition to teaching how to understand the specifications and the taxation of real estate auctions.