Auctions for public housing facilities are held from time to time in Spain. Such auctions are announced in the Official State Gazette (BOE). Buying a new house at an auction of this type is an ideal opportunity to purchase real estate at a price below its market value and, according to the Idealista real estate portal, in various cases it will help to save up to 50%.
A few years ago, auctions for the sale of state-owned real estate were an event in which only investors usually participated. However, nowadays more and more people are interested in such trades. Especially in view of excessively high prices in the ordinary market.
Idealista points out that auctions of state-owned houses are often the result of a certain judicial process. We are talking about cases when an individual or a legal entity applies to the court with a request to put the house up for auction to pay the debt, for example, if it is impossible to pay the mortgage further.
How to participate in the auction?
All houses seized during the trials are published in advance on the BOE portal as part of lots at auction. The portal was specially created for such trades. To access it, the user needs a digital certificate or registration in the «Cl@ve» system. Having gained access to this service, a citizen will be able to observe all active housing auctions in the country, divided by provinces.
It should be clarified that participation in public housing auctions is not the easiest thing. A person wishing to take part in them must first deposit from 5% to 25% of the property value as a deposit. As soon as the deposit is placed, the person registers as an auction participant and can make his first bid. According to it, he immediately receives a receipt containing all the details of the bet made.
Finally, the auction result is published within 20 days from the date of publication of the start of the auction. If the bet turns out to be a winning one, then the person will have 20 working days to pay the remaining amount of the total price of the selected housing. For this reason, it is recommended to have available the entire amount of money that you will need to pay for the property in case of victory.
At the same time, you can pay for the purchase with cash, mortgage or other credit funds. Of course, it will be necessary to pay all the relevant taxes when buying, for example, a tax on the transfer of property, the percentage of which varies from one autonomous community of the country to another. However, usually the tax amount is about 10% of the total value of the house.
If a person is unable to participate in the auction or decides to refuse to participate, the deposit made to participate in the auction will be refunded. In other words, the auction participant will not lose this money.
It is worth repeating once again that the advantage of public housing auctions allows both investors and ordinary buyers to purchase real estate at a price below its market value. However, there are disadvantages. For example, auction participants do not have the opportunity to visit the house before the auction starts. In addition, some of these houses are inhabited, may have debts to the administration of the municipality or require major repairs. Everyone should analyze the pros and cons of acquiring an object through an auction.