How to take advantage of real estate auctions?
JUNE 11, 2019 | PROPOSED BY OUR PARTNER ING LUXEMBOURG
House, apartment, land, commercial, cellar, parking ... : real estate sales are increasing in the Greater Region, and Luxembourg is no exception. But is it really a good plan to buy cheaper ? What are the rules? On which points should you pay attention to avoid unpleasant surprises ?
First of all, it is necessary to define what is a real estate auction or real estate sale by auction . This is a public sale which relates to immovable property and is characterized by the allocation of such property to the highest bidder, provided that the bid is deemed sufficient by the seller. In some cases, an over bid is possible within eight days of the auction.
There are two main types of auctions: on the one hand, the forced sales that occur following a foreclosure, a judicial liquidation or a judicial division and, on the other hand, the auctions amicably .
Whether they are voluntary or forced, auctions on real estate are generally practiced by notaries , or even by the Administration of Registration, Domains and VAT (AED) in the case of sales organized by the State or public bodies (escheated estate, housing of functions ...).
Bailiffs are also competent to carry out public sales but mainly for furniture and personal effects.
Track offers
It is not always easy to know when sales are coming to Luxembourg. As is the case in other countries, there is no online site that centrally captures ads for all future auctions. The best thing is that you consult at regular intervals the website of the EDA as well as those of the various notaries present in Luxembourg. Some of them even offer newsletters or SMS alerts to keep you informed.
Speed and availability will be key to finding bargains. Future sales are only announced one to two months before the auction (which takes place on a weekday) and generally only have a few dates to visit the property.
Get reliable advice
Do not hesitate to be accompanied by a real estate expert during the visit of the property. This one can help you to evaluate correctly the state of the building and to locate the works to be imperatively realized like the electricity or the heating as well as the latent defects.
If it is a condominium, the trustee (if there is one) can also provide you with useful information such as the state of foundations and roofing and future collective work to provide.
Set a maximum amount
In order not to get carried away the day of the auction at the risk of overpaying the property , prepare in advance a budget that you will not need to exceed. With this in mind, find out as much as you can about market prices by looking at real estate listings for similar properties in the same area.
A real estate expert, or even your banker if he has some experience in mortgages, can also be of great help in determining a fair price.
Identify the fees
Keep in mind that taxes, registration fees and auction-specific fees will have to be added to the selling price of the property. These expenses mainly cover the expenses related to the organization of the sale as well as the fees of the notary.
The sum of all these amounts is thus close to the amount you will have to pay if the sale is made via a real estate agency. In and of itself, it does not change much in your decision to buy the auctioned property or not, but it's better to have it in mind when you make your financing plan .
Make sure you have the funding
Make sure your bank is ready to lend you if you manage to acquire the property within the limits you have set. In auctions, there is no possibility of a retraction or suspension clause unless it is expressly provided for in the specifications, and the payment of the goods must be made within a limited time, usually within two months final award.
In default of payment, you will have to pay interest of delay , the contract of sale will be canceled with your damages with the payment of damages or the property will be put back for sale. If it is sold cheaper, you will be required to refund the difference.
In summary, the auction can help you make the right deal as long as you're both realistic and opportunistic.