Corporate Works

Italy: how online real estate auctions work

Pisa, Italy - cathedral

Pisa, Italy – cathedral

What is an online real estate auction and what is the difference with a traditional auction? A real estate auction procedure is in general a method of sale that allows you to put more bidders in competition, to obtain a higher consideration and therefore greater satisfaction for the needs of the seller. Today, all auction procedures, both those relating to the disposal of assets of public bodies and the judicial ones, are instead carried out online.

Why does a property come to a judicial auction?

A property undergoes a judicial auction sale process if the owner has defaulted on a pecuniary obligation (debt) towards another person (private individual, company or bank). In this case, the creditor, who has not managed to have spontaneous satisfaction of his credit, can undertake a (coercive) sale of the asset that the debtor has offered as a guarantee (for example by registering a voluntary mortgage) and claim back on the price obtained from the sale at auction.

How to participate in an online auction

Anyone can participate in an online auction, given that the discipline is perfectly superimposable to that once set up for traditional auctions. There is no need for the technical representation of an Italian lawyer. For the hypothesis in which the subject who intends to participate in it (given the hypothesis of mixed sales) is not able to manage the thing from an IT point of view, he can make use of a facilitator subject who, in the language of the legislator is called “presenter”.

The steps to follow are:

  • The booking of the visit to the auction property through the caretaker;
  • The submission of the offer, in one of the accepted methods, through the authorized Portal, also including an accountant that proves the payment of the deposit;
  • Participation in the tender on the day and time indicated in the notice by connecting to the portal indicated in the same notice of sale. During the tender all events, higher offers, awarding, etc.  will be registered and uploaded to the portal by the auctioneer / delegate.

Asynchronous telematic auction, how does it work?

The auction methods currently admitted are:

  • Synchronous auction: the offer and the request to participate are submitted exclusively electronically; the competition also takes place live and online. In this type of auction, the bids are carried out in a predetermined period of time and without the simultaneous connection of the judge or the referent / delegate of the procedure. The tender can last several days and will start on the date and time indicated in the notice of sale. The telematic sales manager communicates to the participants, using the auction notice methods, each raise. At the end of the time period set for the tender, the telematic sales manager communicates the highest offer formulated to all participants.
  • Mixed synchronous auction: here, in addition to the above-mentioned electronic submission methods, also paper submission methods are permitted which will be uploaded to the web platform by the auctioneer / delegate; the tender may have remote participants and also in presence in the physical place where the auction takes place (the subjects who submitted the paper bids will certainly be present);
  • Asynchronous auction has methods for submitting offers and requests only electronically; the competition also takes place live and online. In this type of auction, the bids are carried out in a predetermined period of time and without the simultaneous connection of the judge or the referent / delegate of the procedure. The tender can last several days and will start on the date and time indicated in the notice of sale. The telematic sales manager communicates to the participants, using the auction notice methods, each raise. At the end of the time period set for the tender, the telematic sales manager communicates the highest offer formulated to all participants.

Is it possible to take out a mortgage for the purchase of a property by electronic auction?

There is no difference in terms of the possibility of taking out a loan to pay the price of a property awarded at the auction, whether the auction was carried out electronically, or with analog or traditional methods. Once the auction has ended and the successful bidder has been identified in the person who made the highest bid, the timing for the deposit of the residual price (usually 90 days) is the same and it is in that period of time that an application must be submitted to a bank to obtain the loan.

Is a security deposit required? The security deposit does not change: in the sense that the deposit must be paid both in the case of an electronic auction and a traditional auction.

What happens if the successful bidder fails to make the payment in the time and manner provided?

If in the time allotted for the deposit of the price the successful bidder does not pay it, he loses the right to award and suffers the loss of the deposit as a penalty. The asset is offered again at auction and if, from the new auction, the hammer price were to be lower than that of the first one, the expired successful bidder also suffers a sentence to pay the difference minus the deposit.

What are the main existing portals for telematic auctions?

The portals of the Telematic Sales Managers are published in a list kept by the Ministry of Justice and available at the following link.

A tip for those who want to participate in an online auction

The advice to be given is to carefully analyze the notice of sale, visit the property with the help of the caretaker and carefully evaluate the maximum price threshold that can be dealt with; as for the telematic aspect, it is advisable to prepare adequately (perhaps by asking the managers of the platforms used and / or the delegates and / or auctioneers for clarification and explanations), considering that the procedure is not that complicated. Alternatively, use a presenter, for example a lawyer.

Should the house you would like to buy occupied by its owner or be rented, be careful and hire a lawyer.