How to buy a real estate auction?

To the opposit from merchants property and real estate professionals, people doesn’t use very often auctions even if it’s sometimes a great opportunities to access the property.
Below are some answers to the most commonly asked questions.

How to know that a property will be put up for auction?

Property soon to be auctioned will be advertised one month before the sale. This advertising is done on posters posted on the good but especially in the specialized press. You will find, for example, the announcements on TGI of NICE on the site of Small Posters.

Can I buy real estate located anywhere in France before the Tribunal de Grande Instance of Nice?

The Code of Civil Enforcement Procedures provides a clear answer: “The seizure of property is prosecuted before the judge of the execution of the court of first instance in whose jurisdiction the seized property is located.”
The answer is therefore negative.
On the other hand, you will be able to acquire any real estate which is in the jurisdiction of the tribunal de Grande Instance of the city of Nice, the two littoral limits being in East Saint-Laurent of the Var and Menton in the West.

What is the point of buying a property at auction?

The three major interests are:
– The price: the properties for sale are often offered at ridiculous prices and it often happens that the goods are sold at prices 20 to 30% below the market price.
– Speed: The price to be paid within 2 months, you will in principle have the property faster than in a conventional sale.
– Diversity: The auction allows you to have access to a diverse panel of real estate that you probably would never have had the idea to buy or real estate difficult to find elsewhere: property belonging to the State , to associations etc.

What if I am interested in a property that will be auctioned?

Firstly, you will have to provide you with all the useful information concerning this property and in particular to consult the specifications (all the documents relating to the property delivered in the hands of the notary or the lawyer in charge of the sale (report of condominium meeting, diagnostics, lease contract if the property is rented, charges, etc.).
For this, Maître Ribeiro de Carvalho can assist you in this process by approaching the law firm in charge of selling the property to provide you with essential information such as the description of the building, the conditions of occupation of the property. building or the expenses of co-ownership.
It will then be time to visit the property. The day of the visit is generally fixed between 7 to 14 days before the sale and the information is then available on the legal notice. You do not need to make an appointment because the days of visit are fixed before. You will need to be available during the days specified on the ad.
Then the Code of Civil Enforcement Procedures requires the parties to be a lawyer. Indeed, for the sake of legal certainty, you must be assisted by a lawyer to carry the auction.

What do I have to provide to my lawyer the day he goes to the Tribunal?

First and foremost, you will have to present bank guarantees to your attorney. (Simulation of bank loan for example). Indeed, things can get very complicated if you can not pay the sale costs (see below).
Then you must provide your lawyer with a bank check of 10% of the amount of the bid with a minimum of € 3000.
What additional fees will I have to pay for this auction ?
  • The preliminary costs which correspond to the procedural costs made necessary to reach the sale. These fees are communicated the day of the hearing.
  • The emoluments proportional to the price of the sale
  • Registration fees paid to the State
  • Mortgage fees
  • The fees of the Lawyer
These fees represent approximately 15% of the price of the building (in addition to the hammer price). You must therefore budget in your budget for this 15% in addition to your maximum bid amount.

What happens if I win the auction?

You take it, but …
It may seem odd to you, but even if you have “won” the auction, you will have to wait for 10 days. Indeed, anyone can outbid 10% of the price of the property during this period.
After this period, you will have to pay the sale price within 60 days otherwise you will be liable for late penalties.

What happens if I win the auction but do not pay the amount due?

The Tribunal will then tender the property at an upcoming hearing.
However, the consequences can be important for you.
First you lose the advance you have already paid. Then you may be required to pay the price difference between the original hammer price and the new resale price.
That’s why we strongly advise you to consult your banker before considering bidding.

And what happens if I do not win the auction?

It is not unusual for another person to be able to offer more than yours. You are not designated the successful bidder (the person who won the auction).

The auctioning lawyer then delivers the checks immediately after the hearing.

Some additional information.

Count between 150 and 300 € H.T of fees to carry the auction.
In Nice, auctions are held every Thursday at 9 am at Palais Rusca located at Place du Palais.
An article to find in the page legal advice or Linkedin.
An article written by Caroline RODRIGUEZ (Lawyer student)

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