At real estate auctions, which are conducted by bailiffs, as a rule, apartments and houses that were put up by the owners as collateral are put up. If the debtor to the bank has not fulfilled his obligations, and according to the agreement he has forced the apartment, then the bank has every right to seize the property for non-payment of the debt. This property is then put up for auction, where auctions are held related to the purchase of this property by the new owners. What are the features of buying an apartment at auctions, what should you expect, how does the procedure go?
What kind of housing is sold at auctions?
Real estate can be sold in three ways at auctions or auctions:
- if the seller is a debtor of the bank and sells his apartment under a voluntary agreement with the bank;
- if the seller is the bank itself, and its interests are represented by a realtor at the auction (necessarily accredited);
- if the seller is a bank and participates in an open auction.
Why is the apartment up for auction?
The reason why an apartment can be put up for auction to pay off a debt is always the same - insufficient funds to satisfy the demands of creditors. A court decision to seize is a prerequisite for the sale of real estate by a bailiff at auction. On their own initiative, they do not have the right to seize residential real estate.
Debts can arise due to:
- unpaid loan from a bank or microfinance organization;
- accumulation of debts for utilities;
- debts on alimony obligations;
- failure to pay mortgage payments.
Features of electronic trading
In order to successfully participate in electronic trading, you must follow the following instructions:
- It is necessary to issue an electronic signature for the participant.
- Research and select the property you want to buy.
- The participant must be accredited on the electronic auction or trading platform.
- Study the object and all documentation on it.
- Transfer the deposit to the bank or organization that put the apartment up for sale.
- When the auction opens, place a bid and if you win, complete the paperwork.
Pros and cons of buying council housing
In order to understand whether it makes sense to buy an apartment that was previously seized, it is worth analyzing the positive and negative aspects of buying such real estate.
The advantages in this case will be:
- low cost – as a rule, the cost of such apartments is lower than the market price, so the offer is quite favorable;
- The reliability of the purchase lies in the fact that before the sale to its first owner, the house was checked and the apartment, respectively, too, so there will be no problems with long-term construction or the like.
The disadvantages in this situation are:
- you cannot view an apartment before buying it;
- former residents may create trouble because they do not agree with the decision of the bailiffs;
- This purchase has a number of difficulties in re-registration of housing, since there are encumbrances on it.
How to remove the arrest from an apartment?
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Beloborodova Yulia
From 2004 to 2012 she worked as a bailiff. Specializes in the field of procedural, civil, financial, family and labor law.
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The decision to lift the arrest can only be made by the court that issued it. To do this, the debtor must obtain the consent of the creditor and justify the demand by the fact that the removal of the encumbrance in the form of arrest will allow the property to be sold quickly and more profitably, or to be mortgaged. Using the proceeds, pay off the creditor.
The second option when the debtor can apply to lift the arrest is early (before the auction) repayment of the debt. In this case, a payment document confirming the transfer of funds to the creditor’s account and the latter’s written consent to lift the arrest due to the absence of claims on the debt are provided as evidence.
The application is paid with a state fee and is considered in court. An appeal may be filed against the court's decision.
Buying a foreclosed apartment
In order to understand the cost of an apartment, you need to take it from the indicated cost in the writ of execution. The bailiff, who is directly involved in the execution of the proceedings, must notify the debtor within five days that he urgently needs to fulfill his obligations; if the debtor does not pay his debt, then the bailiff describes the object that was forced and imposes his arrest, that is, the housing is alienated.
The amount that must be repaid by the debtor within five days includes the entire debt with interest and penalties.
The sealed apartment becomes the property of the bank or the Federal Property Management Agency. Bidding will then take place.
Bailiffs
Buying real estate has a disadvantage in that it is impossible to inspect the apartment before purchasing it. You can evaluate the area, the house, the neighbors, but you won’t be able to evaluate the apartment itself.
From auction
The sale of an apartment is carried out only in accordance with the legislation of the Russian Federation, which stipulates that special events must be organized for citizens and organizations to conduct auctions.
Each of the bidders can offer their own price for the apartment, the winner is the one who offered the most.
Bank
If the apartment is sold by a bank, then its price will be quite low. It is not profitable for the bank to keep the apartment on its balance sheet, so it wants to get a certain amount for it as quickly as possible, which the citizen owed him. To do this, a tender or auction is usually held.
How to buy a seized apartment from a bank
You can purchase a mortgaged apartment directly from the bank . But there is one nuance - in this case she is not arrested, since the seizure of property occurs through the court. The sale of a mortgaged apartment means that its owner does not pay mortgage payments, and the bank is trying to resolve debt issues on its own, without resorting to court assistance. There are three ways to purchase such an apartment :
- The sale of property is carried out by the debtor himself, in agreement with the bank. In this case, the cost of the apartment will be no different from other real estate options - after all, you need to sell the apartment to the owner for the maximum possible amount in order to pay off the debts and have something left over. The debtor sells it at a reduced price only when deadlines are running out (and the bank gives only 3 months for the sale), or when the buyer does not agree, citing possible problems associated with the encumbrance of the property, which will still have to be removed.
- The sale of the apartment is carried out by the bank through duly accredited real estate agencies. The banking institution itself does not have the right to sell property. The price of an apartment depends on the realtor, who can sell it at either a low or high price. Since the bank, in principle, does not care - it does not receive any profits, it is important for it to pay off all the debtor’s existing debts. The scheme of the transaction is as follows: the bank concludes an agreement with the debtor on the transfer of rights to the apartment, then it is sold, all debts are repaid, and the remainder is returned to the former owner of the apartment. The bank can sell the collateral to a new client who has applied for a mortgage and give him a reduced rate on this loan.
- Open bidding. They are carried out in relation to an already seized apartment, by court decision. That is, when the bank applied to the courts to collect debts.
Is there a risk
When purchasing an apartment at auction that was previously repossessed for debt, there are risks. First of all, they are related to the fact that the future owner does not see the property until it is transferred after payment. Therefore, the moment arises when you can buy a pig in a poke. This is due to the fact that bailiffs do not show objects that have been seized.
The buyer is provided with information about the apartment and its technical description:
- meters;
- number of rooms;
- the floor on which it is located;
- general condition of the apartment.
Evicted tenants can appeal to the court regarding the seizure of property, so there is a certain risk that the decision will be approved and then the purchase will be considered invalid.
How an apartment comes under arrest
The seizure of property occurs for the debts of the owner to one or another institution, upon the latter’s appeal to the courts. As for apartments, the debt most often arises for an outstanding mortgage loan to the bank. But there are other cases of debt. When arresting, a mandatory condition is that the apartment is pledged. And when debts are systematically not paid, but only grow and grow, multiplying with interest, penalties and penalties, the creditor turns to the courts. And after the court decision, the bailiffs describe the debtor’s property, and then this property is seized for the purpose of further sale.
How to purchase
Seized property is sold in accordance with the laws of the Russian Federation, namely Federal Law No. 229. It spells out the main points and important provisions that relate to enforcement proceedings.
Documentation on the seized apartment must be sent to the FSSP department. To do this, you will also need to provide the bailiff's arrest report.
Before setting the auction date, documents must be verified.
Documents must be correctly executed, have legal force, and be current at the time of their submission.
Both individuals and legal entities can take part in the auction.
The auction procedure has several stages:
- The participant and the bank must sign an agreement on the transfer of the deposit amount.
- The participant must write an application for participation in the auction and attach the necessary package of documents to it.
- The participant receives a protocol that will indicate whether he has the right to participate in the auction or why he was refused.
Decor
As we indicated earlier, in order to participate in an auction or trade, it is necessary to collect a certain package of documents, which in turn consists of:
- Applications for participation in tenders.
- A check indicating that the participant has paid the deposit amount to the bank.
- Passport of the person participating in the auction.
- A document that lists and describes the submitted documentation.
- If the participant is married, then a spouse's agreement is required.
- An envelope with the amount that the participant can provide for the lot (apartment). It must be sealed.
An organization (legal entity) will need to provide a slightly larger package of documents. In addition to the above, it should also contain the following documentation:
- photocopies of constituent documentation;
- power of attorney for the person who will participate in the auction on behalf of the company;
- permission to purchase an apartment from the organization’s governing bodies;
What documents need to be prepared
It was already mentioned above that in order to participate in the auction for the acquisition of confiscated property, certain documents are required. Let's list them:
- a mandatory application from the applicant, which is executed in two copies;
- a receipt from the bank, which confirms the fact of making a deposit from the applicant;
- for individuals, a copy of the passport must be provided;
- a list of documents provided by the applicant or his authorized representative, in two copies, one of which must be returned to the applicant with the signature of the seller;
- if the applicant has a family, then his or her spouse’s consent to carry out transactions at the auction must be provided;
- a closed envelope indicating the price offer for the lot you are interested in;
For legal entities, the following documents are additionally required:
- copies of constituent documents certified by a notary, as well as state registration certificates;
- certified and correctly executed documents that confirm the powers of officials acting on behalf of the applicant organization;
- a decision on the rights to acquire property, drawn up in writing, provided that such documentation is required by the internal rules of the applicant organization;
- a copy of the accounting balance as of the last reporting date.
It is clear from the lists that a lot of documentation is required for electronic trading. However, with proper skill, all this is completed quickly enough and does not cause any difficulties. If the applicant is a legal entity, then, as a rule, templates for such documents have already been prepared.
Possible difficulties
Difficulties in this case may be claims from the debtor, whose apartment was seized. He can apply to government agencies with a request to cancel the court decision. But as practice shows, debtors usually turn to collectors. This has its negative consequences because the guarantees that the apartment seized by the collectors will be returned to the client, that is, the debtor, are not written down anywhere.
Other difficulties may include independent attempts to return the apartment. Often, former owners knock on doorsteps and try to harm the new homeowner.
About electronic signature
Electronic digital signature (EDS) deserves special mention This is simply a necessary feature for concluding transactions online. As practice shows, using an electronic signature can save a lot of time.
How to issue an electronic signature. In fact, everything is very simple. In large cities there are a lot of offices that provide such services.
Of course, it is worth mentioning that this function is not free. The service costs approximately 4 thousand rubles. in year. This is not very much money, especially if you are constantly involved in real estate transactions.
7 reasons why you are not yet making money trading bankruptcy
It turns out that by providing purchase and sale documents in electronic form with digital signature, you save the time spent on traveling to the auction organizers. This means that there is more time left for the implementation of other transactions. As a result, your income, although indirectly, increases!
