See precautions before buying at an auction

An open auction with a great initial value can make the eyes of those who have money saved to invest or buy a much-desired good grow, but care must be taken not to end up having to pay more than planned, or worse, falling into a scam. .

Anyone interested in an item being auctioned — a house, a car or an appliance, for example — needs to be informed about the product and the auctioneer responsible. The ideal is to look for the details in the notice.

Each auction has its own public notice, which includes the auctioneer responsible and his registration number with the Board of Trade, in addition to bringing the auction rules (time between bids and when the sale ends), the initial value and payment terms. The duties of those who buy the good are also detailed. If there is any doubt about any point, you must contact the responsible auctioneer.

The interested party must also assess their own goals with that purchase. Is it a long term investment? Or is it for immediate use? These questions are fundamental because the property may need a renovation, or, in the case of an apartment or house, the tenant’s departure from the acquired property may not be immediate, for example.

It is essential to keep an eye on your budget. In addition to the auctioned value, which can often be demanded in cash, the interested party has to add any costs with lawyers and the 5% commission on the good, defined by law, which goes to the auctioneer.

Auctions | What to know before you start shopping

• The key to not having surprises and getting a good deal at auctions is to carefully read the notice
• There, the interested party has information about the desired asset, such as payment terms, closing date of the trading session and the asset’s status.

understand how it works

• The auction is the process of selling an item or a set of items, with a stipulated minimum value; Whoever gives the most value wins
• Most auctions are online and take place on the auctioneers’ own websites.
• Each platform works differently, which must be clear and well explained, but, in general, it is necessary to register and accept a contract to adhere to the rules, in which the interested party assumes responsibility for the bids made.
• Once registered and the auction opened, the interested party can now bid on the website.
• Confirmed a bid, it is not possible to return

Closing

• On the day set for the closing of the trading session, a clock counts down to the end of the sale
• When it reaches the end, the auctioneer announces “I’ll give you one”, opening 30 second countdown
• During this period, it is possible to place more bids; then the auctioneer announces the “I give you two”, which opens a countdown of just 15 seconds
• At the end of it, the timer closes and the highest bidder takes the auctioned good.
• If the interested party cannot participate on the closing day of the trading session, he/she can schedule a bid through the website and notify the system up to how much he is willing to cover other bids.

who can participate

• Any person of legal age
• For this, it cannot be a debtor nor be legally interdicted.

return of the good

• Anyone who buys a good at auction can withdraw from the purchase
• It is possible to do this up to ten days later, before the auction letter signed by the responsible judge is issued.
• It is necessary to prove that there are inconsistencies and burdens that were not foreseen in the auction notice (such as IPTU or condominium debts, for example)

For those who buy real estate

• In the case of real estate, in the event of a third-party embargo request (within five days after the auction), the buyer may withdraw from the property.

Stay tuned

• In both situations of return, the full amount paid for the good is received.

Top tips for getting a good deal

1- Read the notice carefully

• Every auction has its public notice with the regulation; It is very important to carefully read the documents available
• Stay tuned for information such as values, status of the good, payment terms, regulation and closing date of the auction, in addition to the debts of the good to be acquired

2- Check the information

• Search for data and references about the auctioneer and the good being offered
• See, for example, the registration of the property and the Renavam (National Registry of Motor Vehicles), which must be available in the public notice and can be consulted at the registry office and by the Detran, respectively.
• The auctioneer must have its own registration number, which must be checked with the Board of Trade, and at least one contact telephone number.

3- Make sure the purchase fits your budget

• Keep in mind what your objective is with the auction, what is the investment for future sale and if the good will be of immediate use, for example
• Before bidding, have a budget plan, with an amount limit, and outline your goals
• A bid should only be made if there is the ability to afford it.
• Calculate future costs with renovations and repairs foreseen in the public notice
• In addition, the 5% commission on the auctioned value must be added and possible costs with lawyers must be estimated, in case, for example, an agreement is not reached with the resident of the auctioned property.

4- Search for similar goods

• Do market research and compare values
• In the case of real estate, look for one that is in similar condition and location and estimate a square meter value in the region from it
• In the case of automobiles, consult the Fipe table, which is used as a basis for calculating the IPVA, in addition to offers for sales of similar cars outside the auction.
• Considering the costs and comparisons, ask yourself: Is buying through the auction more worth it than buying out of it?

5- Bid and follow the closing of the trading session

• It is possible to bid in advance and follow the process, but another interested party can make a proposal in the final minutes, during the closing of the trading session.
• Monitoring the closing is important to cover any proposals, if it is within your planning, and quickly inform yourself of the final result.

Sources: Claudia Frazão, auctioneer at Frazão Leilões, Renata Reis, coordinator of Procon-SP, Sergio Russo Vieira, managing partner at Nelson Wilians & Advogados Associados, Bruna Cervone, lawyer specializing in real estate law at Guimarães Santucci