What are real estate auctions? Learn more about them.
real estate auctions
Currently there are many ways to acquire real estate, which allows people to analyze the possibilities they have and thus choose the best way to get a real estate.
One of the ways to acquire real estate is through real estate auctions, which are used to acquire real estate through a form of auction and with prices that are below the real commercial value of the properties.
What is a real estate auction?
These are considered in legal processes through which real estate auctions of homes are ordered.
How is a real estate auction classified?
In Mexico, bank auctions are classified into 3 groups which can be defined as:
3.- Private or Private.
What causes a house to be in real estate auction?
To carry out real estate auctions, 3 groups or ways of cataloging them are taken into account, so that different procedures are carried out at the time of auctioning off the real estate in question.
banking: In this type of real estate auctions, they occur in the event that a banking institution mortgages a property to a natural or legal person and they cannot pay, in this case the real estate automatically becomes the property of the banking institutions which are They are in charge of putting the properties as part of an auction.
judicial: These real estate auctions are subdivided into litigious and adjudicated, they are defined as sales of real estate that are auctioned in a court, with respect to unfulfilled debts, where a starting price is placed on the property, legally called "bid", in in which the interested parties compete among themselves to acquire it, the operations are through payment in full that allow the acquisition of the property, for this type of auction it is very important that a team is considered that has knowledge of the legal areas that can support in the state of the process in which the property is found.
It is important to consider that these auctions are recommended to people who have the support of a legal team or lawyers who are experts in this matter.
In these cases it is important to consider the legal expenses, since the costs of the property can be low, but the indirect legal costs can be high.
Private or Private: They are in the event that a person cannot pay their credit and their payment status is up to date, the person interested in acquiring the property can make use of mortgage loans, Infonavit, banks or even cash payment.
What is the benefit of participating in real estate auctions?
This type of purchase allows you to acquire a property at a lower price than the commercial price since you are in some type of trial or in special situations that prevent payment compliance. mortgage.
How is the price of a property determined?
In order to put a property up for sale through real estate auctions and because it is done through a legal process, the property needs to go through a judicial appraisal process, in which the characteristics of the property in question are analyzed and set a value.
How is the auction procedure?
Initially, the property is offered at two thirds of its market value, an issue that benefits those interested in participating in the auction. This price is determined through an appraisal carried out by experts.
In the event that the property is not awarded to anyone, a second auction is carried out in which a 10% is carried out at the price that was previously published, in the event that there is no offer either, a third auction is carried out in which the grants the property to that person who exceeds the amount of the debt with his offer.
Example, this is the judicial process.
1.- When a mortgage loan is not paid, by law the banking institution can claim the property and put it under an auction process.
2.- The property that enters into a legal conflict is made available to a court that will proceed to sell it at a public auction.
3.- To participate, those interested must make a deposit in Bansefi of 10% of the published value and make a private offer.
4.- For security, you must go to the auction with the deposit ticket made to Bansefi.
5.- In this auction, the mortgage rights are granted to a third party, who must follow a legal procedure and become the new owner.
6.- Then, the deed of the property is carried out.
7.- The winner must pay the rest in the period ordered by the judge by means of a resolution approving the auction that goes from three to five days or from ten to fifteen days.
8.- Possession of the property could be delivered within a period of more than two years.
During the process these expenses must be covered
- Lawyers and Notaries.
- Debts pending services.
It will be impossible to visit the property. They are usually still occupied by the debtor.
Can anyone enter a real estate auction?
Yes, anyone can enter a real estate auction, however, it is recommended that the person have an amount saved and that they receive advice from lawyers and notaries specialized in real estate, since these will help them make the best decision on which property they want. It is more appropriate depending on the economic solvency that one has, as in the case that the property has a debt of water, electricity or property tax.
Before buying a mortgage auction, take into account the following points.
- Seek experts, prior to participating in an auction, seek the advice of expert lawyers in this type of adjudication and a notary.
- Don't pay advances. In mortgage auctions, no down payments or advances are made to individuals, all payments must be made to authorities or banks.
- In different specialized publications you can check the prices of the area to make sure that the auction is within the price ranges.
- Do a preliminary investigation of the property, the debtor, the state of the mortgage and even the office you are going to go to.
Consider all expenses. In addition to the value of the property, it considers deed expenses, ISR payments, fees, delays in property service payments and remodeling.
Where can I find the foreclosed properties?
Because any person is allowed to participate in these auctions, they are published in the Official Gazette of the Federation, also including the address where the property is located and the initial price at which the auction will be held.
If what you want is to participate in a bank auction, you should consult the pages of each institution to review the properties that are in this legal situation.
What is the disadvantage of real estate auctions?
One of the main disadvantages of buying a house that is part of a judicial process like this is that there is no way to access the property and inspect it from the inside until the auction is over and possession is available.
This does not allow you to review the state in which the property is located and, in addition to the cost of sale, you would have to consider the cost of remodeling, which could cause excessive spending.
Another point to consider and very important are the debts that the property has, such as: water, electricity and property tax, this with the purpose of complying with the guidelines that the law imposes for the proper fulfillment of the adjudication of the property.
Now that you know what a real estate auction is, you can evaluate if you need some type of appraisal, ANEPSA can help you with various types, you just have to leave your data