Lenders often intend to sell properties quickly to recover the money they have invested, and for that purpose they put the properties up for auction. Examples of these same entities would be Banking, Treasury, Social Security, Municipalities and Orders of solicitors and enforcement agents.
Some advantages of acquiring these properties through these auctions would be the lower price compared to current market values in the sector, the associated discounts that tend to be quite high and the existence of a minimum value for each bid.
Another advantage is the attractiveness of the financial plans involved in the banking properties at auction, such as reduced spreads, extended credit terms, exemption from the appraisal commission, and in some cases financing up to 100% of the value of the property and offering the housing documentation services. There is also a greater ease in terms of the bureaucracy involved, such as the waiver of making provisional registrations, which saves the buyer time and money.
There are, however, some risks to be considered in real estate auctions, such as limited stock and locations, considering the preferences of the potential buyer, and the fact that it is only allowed at an auction to see photographs of the property and not visit it. Another risk may be the fact that family members such as spouses, children and parents of the previous owner having the intention to acquire the property and, in this case, they have priority over the other bidders. It may also happen that the property is pledged to more than one institution and therefore some time will have to be used to deal with the bureaucracy with the competent authorities able to resolve the situation, such as the Land Registry Office.
– Flatio. (2021). Leilões de imóveis – o que são e como funcionam?. https://www.flatio.pt/blog/leiloes-de-imoveis-o-que-sao-e-como-funcionam
– Grupo Solução. (2019). Leilão de imóveis: Vantagens e riscos associados a esta prática!. https://gruposolucao.pt/compra/leilao-imoveis-vantagens-riscos/
– Grupo Solução. (2022). O que podemos esperar do mercado imobiliário em 2022?. https://gruposolucao.pt/compra/mercado-imobiliario-tendencias-2/
– Idealista. (2022) 2022, um ano de incertezas e preocupações para o mercado imobiliário. https://www.idealista.pt/news/imobiliario/habitacao/2022/06/24/52839-2022-um-ano-de-incertezas-e-preocupacoes-para-o-mercado-imobiliario
– Idealista. (2019). Buying property at auction in Portugal: a complete guide to make sure you triumph. https://www.idealista.pt/en/news/financial-advice-portugal/2019/12/19/478-buying-property-auction-complete-guide-make-sure-you