In this article, I explain how everything is arranged and whether it is realistic to buy housing at a discount at public auction.
How do apartments get auctioned?
The auctions fall into three types of real estate – municipal property (for example, housing that belongs to the city, but the authorities do not know how to use it), the property of bankrupt companies and mortgage lodgings of banks.
Starting bidding prices are almost always lower than market prices, as real estate is important to sell quickly. In most cases, the apartment was sold without finishing, just a box. This option did not suit me, and I decided to look for something with the finish, but not quite miserable, as some builders like – when the walls collapse and the wiring burns.
I wanted to buy an apartment in the primary market.
A former colleague told me that they bought an apartment through bidding. I registered an electronic key, came to one of the certifying centers with a standard package of documents, registered and passed accreditation on the site (for this you need to provide scans of documents). In total, six people participated in the auction, including me, there were three active players. Someone raises the price and others have an hour to kill her. Many play a tactic of interrupting the price for a few seconds before the end of the hour, sometimes trades last for 96 hours. My auction went for 23 hours; I bought an apartment from the first time, but was close to my limit.
How to participate in the auction?
To participate in house auctions, you need to get and sign a digital signature that is valid for a year, to register at the site where the auction will be held, to deposit some money (if you win, they will go to pay for the property, and if you lose, they will return to you). Anyone who offers a higher price in a given time – wins the auction.
How does it work?
In most cases, bargaining in the “secondary” market takes place in three stages. First it is an auction with a price increase of 5-10% of the starting price of the object. Electronic bidding on the “primary” is similar, but the developer is interested in making a profit, and not in the speed of sales, and a serious discount should not be counted. Experts say that developers are rarely trading; they are easier to sell housing on a standard contract of sale.
How often do these trades take place?
On the periodicity of the law on public bidding, nothing is said, they are announced as necessary.
Then where to find out about them? Look at the sites where the auction is organized. Please note that the receipt of applications usually ends five days before the auction.
How to find these sites?
Of course by typing certain keywords on the search engine. Hudson & Marshall is one that is recommended as they have been operating for years and received a lot of positive responses from transactions ever made.