Strengths and Weaknesses of Real Estate Auctions

Real estate auctions represent an interesting opportunity for those who wish to purchase a property at a price lower than the market value.

However, it is essential to proceed with caution and preparation, taking into account the risks related to the uncertain conditions of the properties and legal complications.

Participating in a real estate auction intimidates many people, especially since the procedures to participate have become online and much more complex.

Clients often turn to me asking for assistance in participating in a real estate auction, not only because of the technical difficulty of submitting the bid and participating but also due to the fear of unpleasant surprises.

There are certain points where I can immediately reassure them: every property offered at auction is published on various dedicated platforms with a full expert appraisal (mandatory in every enforcement procedure) ordered by the competent court.

The appraisal reveals a lot about the property: potential land registry, urban planning, or condominium issues, as well as the actual condition of the property, its maintenance status, necessary works, and so on; it tells us if there are any land registry or urban planning problems, if they are solvable, and at what cost.

The appraisal is therefore a guarantee for a conscious and transparent purchase, helping to avoid the “unpleasant surprises” that often do not emerge in transactions mediated by real estate agencies, not necessarily due to bad faith, but simply because of a lack of useful information to properly assess a property.

This is why buying a property at auction is an excellent opportunity, not only in terms of price.

Now, let’s examine the unfavorable factors: the difficulty in searching for the property, submitting offers—especially online—and participating in the auction.

So, what is the role of the lawyer assisting a client interested in a property at auction?

Preliminarily evaluating every aspect of the property by reviewing the appraisal and all attached documentation; requesting any clarifications from the appraiser or the sale delegate; helping the client prepare all the necessary documentation for submitting the bid; potentially submitting the bid personally, after receiving a notarial power of attorney for this purpose, or assisting the client in submitting the bid themselves; participating in the auction, making raises within the limits set by the client; in case of winning the bid, following all subsequent steps until the transfer decree is issued by the Court.

In conclusion, real estate auctions represent an interesting opportunity for those who wish to purchase a property at a price lower than the market value.

However, it is essential to proceed with caution and preparation, taking into account the risks related to the uncertain conditions of the properties and legal complications.