Spanish Government Property Auctions – How they work.
How to source government auction property.
As well as the details we provide you with there are other ways to discover if auction properties are available in any particular area.
This is to actually visit the town hall in that area and look on the notice boards or ask at reception. The Spanish word for “Auction” is “Subasta” and many auction properties are discovered in this way, these are generally properties that are not available on websites. Good Luck….
Here is a basic guidance outline for an auction of a government auction repossessed property in Spain, private auction sites will differ in procedure.
It is advised to engage a lawyer or estate agent before contemplating to bid at an auction, they will guide you through the whole procedure and ensure peace of mind at a reasonable cost, lets face it you wouldnÂ’t buy a property in your home country without getting some advice, it is no different in Spain.
To qualify to bid at an auction it is necessary to follow a certain procedure, firstly you must have an NIE number, this is your personal ID number (NIE in Spain) and is required throughout the country to purchase anything of an official capacity, this is a simple matter of applying at a local police station.
You will need to open a Spanish bank account, which again is a simple procedure, most of the larger banks have English speakers.
It is also necessary to place a deposit with the place of auction, this will be between 20% and 30% of the guide price and is fully refundable should your bid not be successful. If however yours is the winning bid this deposit is deducted from the final price, baring in mind one can afford the final payments discussing the procedure of purchasing beforehand
in order to have a better insight of one can afford.
Recently a new law has been introduced governing the procedure for auctions, however the changeover period is still in effect so as a result some follow the new law and others remain with the old.
Under the old law there are generally three auctions for a property on the first if the published reserve price is not met the property will remain unsold and go to a second but this time the reserve price will be reduced by 25%. If it still remains unsold then the 3rd auction can sometimes hold no reserve. Each property is auctioned individually on the given date at a set time, bidding is placed by a sealed bid to the clerk of the court.
Under the new law there is only one auction, again the sealed bid system is in operation and the property will be sold to the highest bidder.
So, what makes up a sealed bid ?
Well its basically an envelope containing your name, address and NIE number together with the property ID you wish to bid on, the amount you wish to bid and the proof that you have placed the deposit with the relevant department.
All of the above can be handled by your lawyer or legal representative.
Whilst every effort is made to ensure accuracy Abbey Properties will not be held responsible for any differences relating to auction procedures and entitlement to bid, this is a guide only, always consult a lawyer or a legal body to ensure success with the auctions in the province of alicante or contact us for more information.