All the advantages and disadvantages you need to understand before buying a house at auction in Italy, possible risks and additional costs you need to know.

A real estate auction is a procedure used to sell real estate such as land, housing, a factory or any type of building. A house bought at auction can be a good deal as the purchase price is usually much lower than the market price, but it can also bring unpleasant surprises such as huge repair costs and other emergency investments.

Is it possible to buy a house at auction without money?

Payment for the purchase of a house at auction can be made in full, as well as through a mortgage. Our experts have already worked with such a form as filing a mortgage application. And you can even apply for financing in the amount of up to 80% of the prize price.

If the intention is to buy a house at auction with a mortgage, it is important to go to the auction with the confidence that the bank is ready to give it. In case the potential client wins the auction for the house, the amount must be paid within 60 days. If this is not possible, you lose the property and the deposit already made.

Our team always looks at the market and advises the client on the best options according to your wishes. We also prepare all necessary documentation, present receipts, visit the property and attend the auction.

Buying a House at Auction: Benefits

There are several benefits to purchasing a property at auction, including:

  • Property purchase price: homes are valued below market value at auction. It is impossible to calculate exactly how much you will save because there are different variables, but in general, savings can range from a minimum of 10% to a maximum of 60%;
  • transparency of documentation: the auction is a procedure carried out by the court, therefore there is an obligation to make information about the property available;
  • Online buying: allows more buyers to participate in the auction even remotely. The National Notary Council has created a “notary auction network” that guarantees the safety of those who participate in telematic auctions;
  • Real Estate Appraisal: The court attorney is responsible for a thorough appraisal of the property. This document also states the sale price and the minimum increase price. The information is publicly available, so any citizen can easily obtain it.

Buying a House at Auction: Disadvantages

On the other hand, you should be aware of possible disadvantages, including:

  • Complex procedures: Before purchasing a home at auction, it is important to have experience in the industry. The support of a real estate consultant can be useful in determining the procedures and preparing all necessary documentation. Technical details provided before the auction vary, including what property is for sale, what the auction details are, the base price, the minimum increase price, the bid deadline, and the sale procedure;
  • certain terms: after the property is awarded, the debt repayment period is 60 and 90 days. The debt can be repaid in full or with a mortgage. In the latter case, it is necessary to contact a banking institution that can provide this type of mortgage within a set period.
  • lack of guarantee for defects in form and lack of quality: in fact, since this is a procedure imposed on the performer, there is no responsible subject who reacts to defects in form.

Buying a House at Auction: Risks

There is no doubt that buying a house at auction has many advantages, especially on an economic level, it is good, however, to also be aware of what may be the dangers of buying a property using this method, such as abuse of construction or the need for urgent interventions. The most glaring risks are mainly:

  • requirements and conditions required by the auction procedure;
  • substantial financial coverage to complete the purchase;
  • the presence of tenants with opposing contracts;
  • condition of the property;
  • the existence of third party rights or mortgages.

To reduce these risks, it is good not to immediately focus on the first case that seems profitable, but to evaluate the market in order to understand the mechanisms of this sales method.

What expenses need to be paid after receiving the property?

The winner of the auction must bear several expenses, including:

  • the award price will be paid within 120 days;
  • cadastral, mortgage and registration taxes;
  • VAT in case of purchase from a failed construction company;
  • a notary, if he is requesting a mortgage;
  • delegate compensation for sales and additional incidental expenses.

More questions about houses at auction in Italy

The most frequently asked questions from our clients:

  • What You Need to Know Before Buying a Home at Auction Before buying a home at auction, it can be helpful to learn about the advantages and disadvantages, risks, and procedures that need to be completed before purchasing a property;
  • When buying a house at auction, do you pay a notary fee? No, at real estate auctions there are no notary fees associated with the deed of sale, unlike what happens on the open market.
  • Why are houses at auction cheaper? Real estate at auction has a reduced value because the purpose of the sale is to pay off the contractor’s debt, not to make money, in addition, at each auction where there are no participants, the judge can decide to reduce the auction base.
Italy Auction: Pros and Cons of Buying Property