Surely on some occasions, you have wondered if an auction works the same as an auction. In this article, we will tell you what is the purpose of each one and its differences in the real estate sector.
What is an auction?
An auction is when the courts sell the properties in default of owners who defaulted on their payment obligations and had a legal process or mortgage debt. When the property is auctioned, the bank makes the house available with a price below the commercial value in order to recover part of the money that is loaned to the owner for the acquisition of the property.
What is an auction?
In general, before a person places their bid in an auction, a preliminary study is done to validate that they have enough money to apply. In real estate auctions, the bidder must pay a percentage of the value of the property in order to enter the auction and bid on the home.
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The Civil Procedure Law 1/2000 has undergone an amendment regarding the auction of real estate. One of the most substantial modifications, among others that will now be detailed, is that it will be done electronically.
– Certification of domains and loads. Registrations :
The Judicial Secretary will deliver an order to the Property Registrar to send the Court certification of ownership and charges and thus subsequently notify the Judicial Secretary and the Auction Portal of the presentation of the titles that affect the initial information. The Attorney for the executing party may also request the certification of domain and charges.
The Registrar will communicate the existence of the execution to the holders of rights after the annotation of the seizure. If said owners satisfy before the auction is auctioned, the amount of the credit, interest, and costs will be subrogated to the rights of the executing actor.
– The third possessor
It is the person to whom the property passes before it is sold or awarded in the execution and after its seizure or the beginning of the enforcement procedure has been noted, as well as the person from whom the usufruct, useful domain, the bare ownership, or direct domain of the property.
– Property valuation
Real estate will go up for auction for the value that results from deducting from its appraisal. This operation will be carried out by the Court Clerk, discounting the total amount of the property charges from the value for which the property has been appraised.
– Auction announcement content
The auction announcement will be published in the BOE and will contain the date of the auction, the judicial office before which the procedure is followed, identification number and class, and the electronic address of the auction on the Auction Portal.
In the Auction Portal, the edict will be incorporated. The edict and the Auction Portal will also state that it will be understood that every bidder accepts the existing qualification as sufficient or assumes its non-existence, as well as the consequences of their bids not exceeding the percentages of the auction rate established in Article 650 of the Civil Procedure Law.
– Requirements to bid
5% of the value of the goods must be consigned. By simply participating, the bidders accept the title stated in cars as well as subrogate themselves in the charges prior to the credit.
– Development and termination of the auction
The auction will admit bids 20 calendar days from its opening and will not close until one hour after the last bid. If the auction is suspended for more than 15 days, the consignments will be returned. Its resumption will be carried out as if it were a new auction.
– The auction, payment, and adjudication of the properties
The Clerk of the Court will approve the auction in favor of the position that is equal to or greater than 70% of the value for which the property would have gone up for auction. The bidder within 40 days has to deposit the amount of the bid minus the deposit.
- If it is the executor who makes the best position, the Court Clerk will settle what is owed for principal, interest, and costs.
- If bids greater than 70% of the value are offered, but offering to pay terms with sufficient bank or mortgage guarantees, the executor will be informed who, in the next 20 days, may request the adjudication of the property for 70% of the value. If the performer does not make use of this right, the auction will be approved in favor of the best of those positions.
- If bids lower than 70% of the value are offered, the one executed within 10 days, may present a third party that improves the bid by offering an amount greater than 70%, or that, even lower than the amount, is sufficient to achieve the satisfaction of the performer.
- After those 10 days, the executor, within a period of 5 days, may request the adjudication of the property for 70% of the value or for the amount owed to him.
- When the executor does not make use of this power, the auction will be approved in favor of the highest bidder if it exceeds 50% of the value or, being less, if it covers at least the principal, interest and costs. If the best position does not meet these requirements, the Judicial Secretary will decide on the approval of the auction.
- When it is claimed to constitute the mortgage referred to in article 107.12 of the Mortgage Law, the Judicial Secretary will issue testimony of the decree approving the auction. The request will suspend the term to pay the auction, resuming once the testimony has been delivered to the applicant.
- At any time prior to the approval of the auction or the award to the creditor, the debtor may release his assets by paying in full what is owed to the executor for principal, interest and costs.
- Once the auction has been approved and the amount missing from the price has been entered, an award decree will be issued stating that the price has been entered.
– Auction without any bidder
If there is no bidder at the auction, the creditor may request, within 20 days, the award of the property:
- If it is not a habitual residence, for 50% of the value for which the property has gone up for auction or for the amount owed to it.
- If it is a habitual residence, the award will be made for an amount equal to 70% of the value for which the property has gone up for auction or if the amount owed to it for all concepts is less than that percentage.
When the creditor does not make use of that power, the seizure will be lifted, at the request of the executed.
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