Real Estate is often the most expensive asset a person can buy. But what if there was a way you could make a life-changing purchase a little less eye-watering? This blog explains one way to buy Spanish real estate.
Table of contents
Spain regularly holds “Judicial Auctions” where people can buy all kinds of assets, including real estate, at a significant discount to their market value.
Anyone can participate in these. You just need to register on the Electronic Auction Portal in the Official State Gazette. Afterwards, you can join an Electronic Judicial Auction.
Here are the main things you need to know about before entering a Judicial Auction to buy Spanish real estate:
So what’s a Judicial Auction?
The final stage of an insolvency proceeding is when a company’s liabilities exceed their incomes and redistribute their assets via a public auction. Assets from financially distressed companies cover everything from machines, furniture, and buildings to intangible assets like domain names and patents. If it has value, its previous owner can be auctioned.
Where Can I Find a Court Auction to buy Spanish real estate?
Long gone are the days of standing in a courthouses auction room and raising your hand to bid on something you desire. Since October 2015, the only way to access these auctions and buy assets from an insolvent company is through the Official State Gazettes Auction Portal.
Who Can Take Part and buy Spanish real estate?
The auctions are public, so any citizen registered in the portal can participate. You just need to deposit 5% of the asset’s value to start the process to buy Spanish real estate this way.
How Can I Take Part?
First, you register with the Official State Gazette and make a deposit. This is usually around 5% of the value of the item you are bidding on, and our legal team can register for any new auction you plan to participate in. We can also advise on the process to buy Spanish real estate after the auction.
Once the asset is published on the portal, you have 20 calendar days to make an offer. When is auction is over, the highest bidder is published and asked to make a payment.
If the asset is a piece of furniture, you have ten days to make a payment. This rises to 40 days for real estate.
Any Tips for First-timers who buy Spanish real estate?
It’s crucial to remember that when you are the highest bidder, it’s better not to pay the difference immediately and wait for the payment deadline instead. Sometimes the winning bid is significantly lower than the property’s value, which is tricky with insolvencies. This is important to remember if you want to buy Spanish real estate
If there’s a debt, the court clerk will allow the creditor to increase their claim against the debtor. If the remainder of the price isn’t paid, there is an “auction bankruptcy”. You can lose your deposit in these circumstances, so you must work with a lawyer in these scenarios.
You can buy assets at attractive prices, but there’s a risk. We can help you navigate that risk and secure a new investment at a below-market price.
Why are these assets available?
Sometimes companies have cash flow problems and cannot make payments they owe, so they enter insolvency to address the situation. One option is entering a phase called “Suspension of Payments” where debtor and creditor work together to repay the debt, which is similar to debt restructuring.
The other option is entering “Bankruptcy Liquidation”. This approach hands control to a trusted insolvency administrator whose mission is to extract as much money as possible from the sale of its assets to pay its debts.
The administrator has several options for selling these assets, including a judicial auction. A judicial auction can be an excellent option to obtain assets at more affordable prices. We can help you navigate bankruptcy law and find exciting assets in the parts of Spain that matter to you. Speak with Lexidy to buy Spanish real estate.