Property at auction. Acquiring any product through auction, in most cases, turns out to be more advantageous than making the purchase through traditional means. When the subject is real estate, the discount may be even greater, reaching 60%.
Investing in this type of deal requires a certain amount of experience and also demands that the buyer be willing to take on risks. One tip to carry the transaction forward safely is to rely on legal advisory services. Specialists in the matter help clarify doubts throughout the entire process and also provide guidance on the current legal situation of the property on the buyer’s radar.
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Earnest money (arras): the amount may be retained even above 50% of the deal
The one who raised this subject this week was the website Segs.com.br. Articles on newspaper websites show that the property can be up to 60% cheaper. See here the article from Diário do Grande ABC (from 2014) and here the one from Folha de S. Paulo (from last October).
Folha explains that there are two types of auction: judicial and extrajudicial. “The first involves properties attached following some debt collection action against the owner – overdue condominium fees, for example; the extrajudicial auction, in turn, includes houses and apartments confiscated by banks due to default on real estate financing”, the newspaper published.
Folha’s article also reports that the crisis impacted the auction market. “From 2015 to 2016, there was an increase of more than 80% in the number of units repossessed by Caixa Econômica Federal (Caixa), according to data from the institution – a total of 15,881, against 8,775 the previous year.
Tip for those who wish to buy property at auction
The content published on Segs emphasizes that, when participating in a real estate auction, the recommended course is to opt for unoccupied properties. In this way, the buyer will be able to visit them to assess whether the places are in good condition and whether he will have to spend any money on renovations or repairs. Furthermore, this avoids the wear and additional costs of a possible judicial eviction action.
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