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By Johanna Gardener •
Updated: 12 Nov 2024 • 19:33 • 3 minutes read
Having strong bidding strategies, legal understanding and being well-prepared can give buyers an edge on property auction day
Credit:Shutterstock: ART STOCK CREATIVE
You’ve got your sights set on a property and auction day is looming. If this is the case, it is important to be reminded that having a bank of bidding strategies up your sleeve and being well-prepared for the big auction day is imperative. Doing your homework is essential and this includes not only scouting the area for the usual culprits like noise, cleanliness, neighbourliness and so on, but also familiarizing yourself with property market trends and future potential for reselling or renting.
Observe a few property auctions before taking the plunge as a bidder
Not everyone will say it, but attending a few guinea pig auctions before the auction day is not a bad idea at all, especially if you re new to the game. As an observer, you can get a good idea of the feel and dynamic of an auction which can help to ease worries and give you a clearer vision of the process before taking the plunge. Bidding environments can be both stressful and impulsive!
Bid ferociously from the start or wait until the very end at property auctions
Once at the auction room, avoid getting caught up in the atmosphere too much. Many end up overpaying for property because of the fierce competition and sheer hype of the bidding process. It is adviseable to bid ferociously from the start, which can catch competitors off-guard before they come up out of nowhere with that fearsome bidding bite. By making strong bids early on, it can deter potential bidding rivals as confidence is key in the auction game. An alternate strategy is to wait until the very end to make a bid. A final bidder can create a sense of unease and urgency among previous bidders who may surrender, as they have, by this time, run out of steam. Stay calm and stick to your budget and property ideals. There is nothing worse than making wrong decisions provoked by the heckling of other bidders.
The legal implications of buying a property at auction in Spain
Now onto the legal implications of buying a property at auction in Spain. Before even starting, remember that once the gavel falls and you win the bid, it s over. The property is yours and you are obliged to complete the process. This means that having the financial means to pay for a deposit on the property is essential. Also, avoid the misconception that all auctions run by the same terms and conditions. This is (sadly) not the case. Make sure to read the small print – as tedious as this might seem – which detail the specific terms including fees and taxes and commissions.
Once a property is bought at auction, there is no going back
Once the property is purchased, Spain s auctioneers are keen on making sure that there’s no going back. Regardless of latent ‘hidden defects’ discovered in the property down the line, most auction properties do not come with a warranty. ‘Hidden defects’ include faulty wiring, leaky roofs and faulty plumbing. The house could even be subsiding. Yet tragically, after the sale at auction is made, this now falls into your line of responsibility. This is why it is crucial to be diligent with surveys and inspections before following through with an auction purchase. Legal considerations include reviewing the property’s title deed to ensure that there are no outstanding debts or overhanging disputes that could come back to haunt your bank balance or credit ratings later on.
Be prepared before attending a property auction: Do your research!
Whether you are new to the world of auctions and bidding or not, there are always tips to make you bigger and better in the auction room. Most importantly: be prepared with your research covered and a clear idea of your (unmovable) budget. Make sure you have a clear idea on what you are investing in, the cost of potential renovations and the future possibilities for the property, which will depend on market trends and investigative property analysis in the area. This will also ensure that you are not overpaying for a property, as despite the fact that properties at auction tend to be on the lower end of the budget, competitive bidding can bump up prices to way beyond their worth (luckily for the seller!)
Be savvy not only on your budget but on the management of other finances including taxes and fees. These should be organised and readily accessible to avoid complications and complex legalities. Conduct full inspections of properties beforehand and request clear guidance on renovation costs, which will need to be factored into your budget.
Well-informed decisions at auction are determined by careful planning
With all this in mind, it only remains to be said that a well-informed decision can be the difference between a fresh, positive start and a chain of legal issues, compensation and complaints. Despite the auction day implying big decisions, make the upcoming weeks and months the bastion of those decisions. After all, what you put in, you usually get out and with conscientious preparation, time and a clear, informed mindset, the weeks leading up to the property auction will pay dividends on the final auction day.
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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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