Buying Real Estate From An Electronic Bankruptcy Auction

2023 Author: Douglas Hoggarth | [email protected]. Last modified: 2023-05-24 11:23

• What is an electronic auction for the sale of seized property
• Which trading platforms are the most popular and reliable
• What is required to participate in electronic trading

• Nuances of electronic bankruptcy auctions

  • The technical and legal condition of the subject of the auction does not correspond to the declared
  • Mock participants
  • Uncleanliness of the auction organizer
  • Difficulty filling out documents

On the Internet, there are often advertisements for "wonderful" video lessons, by listening to which you can learn how to acquire various property from electronic bankruptcy auctions.

Their creators promise that people who have bought the course will be able to receive hundreds of percent of the net profit from each purchase and will easily navigate in all the intricacies of this difficult process. But in practice, everything is much more complicated. Let's see what is needed to participate in such auctions and what difficulties their participants may face.

What is an electronic auction for the sale of seized property

The form of electronic trading for the sale of debtors' property is provided for by the Federal Law "On Insolvency". This type of auction is held on a special electronic platform, of which, as of 2013, there were already 48 in Russia. Bids and price offers of participants are accepted remotely. All bidding documentation has also been converted to electronic form.

Which trading platforms are the most popular and reliable

In Russia, the most famous electronic platforms where auctions are held for the sale of seized property are: Fabrikant.ru, Sberbank AST, Realization Center and Electro-torgi.

The likelihood of any violation of the rules and infringement of the rights of the auction participants depends on who in each particular case will be the organizer of the auction, what property will be exhibited, whether any of the participants will be able to find an approach to the organizer and similar factors. Therefore, it is simply impossible to calculate the reliability of any of the sites.

What is required to participate in electronic trading

Anyone who has reached the age of 18 can try to acquire seized property in this way. To do this, he needs to obtain an electronic digital signature, register on the electronic platform where the auction will take place, and send a completed application for participation with a package of necessary documents to her email address. Further, the deposit is made, established by the rules of the auction.

Nuances of electronic bankruptcy auctions

Of course, it is incredibly tempting to buy property at a price much lower than the market price. But it's not that simple. Bidders face a myriad of challenges and obstacles. Let's consider the most common ones.

The technical and legal condition of the subject of the auction does not correspond to the declared

Often, the lucky winner of the auction, who has bought residential property at a very low price, discovers that minor children are registered in it or that engineering communications are damaged and require expensive repairs.

To avoid such situations, it is necessary to spend time in order to obtain information in advance about the technical and legal condition of the object put up for auction.

Mock participants

It happens that dummies take part in the auction, the purpose of which is to inflate the price of the lot to sky-high heights in order to prevent real buyers from purchasing it, and then refuse to conclude a sale and purchase agreement, thereby making the auction invalid.

Uncleanliness of the auction organizer

Sometimes an unscrupulous bidder acts in the interests of one of the participants. He can conduct an auction on the day of its announcement so that most potential buyers do not even have time to submit an application, arrange a DoS attack at the moment of a critical price decrease for the required lots, or go for other fraudulent tricks so that the participant he needs is declared the winner.

Difficulty filling out documents

A huge number of potential buyers of seized property are eliminated at the stage of filing an application for participation in the auction. Therefore, it is necessary to pay maximum attention to this aspect:

• get acquainted with the regulations of the electronic platform;
• provide the documents necessary for the application, completed in full accordance with the rules of the auction;
• send a scan of the document certifying the payment of the deposit.

Any mistake in filling out the documents or violation of the site regulations are grounds for refusing to register as a bidder.

Thus, the electronic auction of seized property can be a very profitable way of acquiring real estate. But the people who elect him need to think carefully about whether they can get around all the pitfalls.