Mission Statement: to assist the integration of foreign residents living in Spain
By Johanna Gardener •
Updated: 12 Nov 2024 • 19:45 • 3 minutes read
Properties on auction can be a cost-effective and efficient alternative to traditional house buys
Credit:Shutterstock:sirtravelalot
House-buying by auction in Spain can seem daunting, but with thorough preparation and understanding of the process, it offers a viable alternative to traditional real estate transactions.
Purchasing a house at auction is a concept that may feel intimidating, especially in a foreign country. For many, it lacks the perceived safety net of buying through an estate agent, where the process appears more straightforward and less daunting. However, in Spain, auctions are a common way to acquire property and are typically held at the local courthouse, known as the ‘Juzgado de Primera Instancia.’ While in-person attendance is the norm, some auctions, particularly separate auctions of embargoed properties run by Social Security, may allow online participation. If you re considering bidding at an auction in Spain, thorough preparation is essential. This includes conducting detailed research, securing the necessary funds, and familiarizing yourself with the local area. It is also essentiual to be aware of two main points before you take the leap:
Bidding is competitive in Spain, like anywhere else. Prepare yourself to make quick yet well-informed decisions.
Many auction properties in Spain come with no guarantee or warranty. This is the risk that can sometimes accompany buying property at auction. Then again, aren’t many things in life a gamble?
Auctions offer hidden property gems at a fraction of the price
Buying a house on auction is not only an exciting option, where unusually enchanting havens or inspiring renovation projects can be up for the taking. These hidden gems are also a more cost-effective option.
First step: let’s start by running through some of the benefits and common misconceptions.
What are the benefits of buying property on auction?
For savvy property investors, buying at auction can offer a myriad of benefits and can be an extremely profitable decision. One obvious advantage is the price which tends to be significantly lower than your “shop-bought” home from an estate agent. At auctions, you tend to find motivated sellers who are desperate for a quick sale and so bargains are up for the grabs at every pounding of the auctioneer’s gavel. Don’t be put off by estimated prices as things often change in the heat of the moment! This means that buyers can capitalise on savings and make substantial returns in their investment, in the case of re-sale.
I m concerned about the process of purchasing a property on auction
There is the common misconception that buying at auction is chaotic and disorganised. In the absence of set prices and set paperwork, many probably envisage a bit of a free-for-all. However, that is certainly not the case. Auctions have set timelines and there are clear guidelines for buyers and sellers meaning that the process is usually smooth and efficient. It can certainly be a speedier procedure than a traditional buy where much of the middleman, paperwork headaches are avoided. In a nutshell, it can be an attractive option for investors who want to add real estate to their portfolio, efficiently and without breaking the bank.
Why isn t anybody talking about property auctions?
So, why aren’t property auctions more popular or talked-about? One common misjudgement of property auctions is the idea that the properties available are nearly always in a state of abject disrepair or are foreclosures. Some properties on auction may be in financial trouble, but many are simply hitting the ‘for sale’ button at top speed simply because the owner wishes to skip the time-consuming slog of a traditional sale. This could be due to moving country, relocation or quite simply, a step up to the next rung of the property ladder.
Feeling in-the-dark about first time investing in auction property
People new to the world of auctioning will often feel in-the-dark about the whole process and it can be easy to think (and wrongly) that buyers at auction comprise only experienced investors. It might feel intimidating but remember, there’s a first time for everything and everyone was new to the game at some point. The honest truth is that, whilst there are experienced and highly savvy investors waiting to snap up a budget renovation project or with eyes on the cash for a re-sale opportunity in an up-and-coming neighbourhood, this is only a generalisation. There are opportunities for buyers from all walks of life at auctions.
Don’t be scared to join this new community and snap yourself a bargain in the meantime.
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Written by
Johanna Gardener
Originally from Manchester, UK and with a degree in English with Modern Foreign Languages, she has been a permanent resident in Spain for the past 12 years. Many of these years, she has spent working as a secondary school teacher, as well as in journalism, editing and marketing. She currently lives in the historic centre of Malaga, where she enjoys writing, walking and animals.
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