Property Auction

Auction is more and more becoming a popular way to locate properties of any type and condition. Auctions are usually held by the Cyprus Land Registry, by auction houses or by the banks due to bankruptcy of the owner. The sale of property by auction is a quick and easy way to make a deal. In all the occasions an auction is only completed at the moment the hummer falls!

Who is organising an auction

An auction held and organised by the Cyprus Land Registry is always open to the public, while an early announcement is being published in the press, on the notice board of the District’s Land Registry Office where the property is located and on the board of the certain District’s Court. An announcement is also placed at the place where the auction is going to be held. Since the auctions are open to any person interested to participate, they are usually held on Sundays in public places like hotels, cafeterias and clubs. The announcement is supposed to declare the place, date and time of the auction as well as the features of the property and sometimes the reserve price.

Auction houses are great places to find a property suitable for your needs. It is possible you can get excellent deals on properties that normally you would have to spend a lot more for if they were listed with an agent. Different auction houses will be pleased to notify you of properties that will be going on auction by sending you via mailing and e-mail their updated lists. Auction houses sometimes may offer the option to purchase a property at a certain price before it goes on auction, which can actually be a good deal.

Auctions held by the Banks can be public or private allowing only a certain group of people to attend the auction. As mentioned before usually a bank is placing a property through the procedure of sale by auction as a result of the bankruptcy of the owner. This means that there is a need for a quick sale and therefore the reserve price starts lower than usually. Such auctions can be a source of cheap land or house for sale. 

Typical procedure of an auction

The procedure is almost the same in every occasion of the above three. After the announcement of the reserve price the people interested start bidding the price. At some point there will be an offer that nobody else is interested to bid and after a few seconds without any new offers the offer is being accepted. The auctioneer announces the completion of the auction by the fall of the hummer as it is accustomed. Subsequently the highest bidder becomes the purchaser of the property on auction. Unless he withdraws his offer before it is accepted, the person who makes an offer which is accepted is bound and considered to have entered into a sale contract. The contract of sale is created and first signatures fall in order to ensure the validity of the deal.

Issues related to auctions

The auctioneer is not allowed to accept a lower bid than the preannounced reserve price. If by mistake he accepts a lower bid, no contract is made between the owner and the bidder, as there is no consideration. In the case where a property goes on auction without reserve, again no contract of sale is made if the auctioneer refuses to recognise the highest bidder property, though he is liable to the highest bidder on a separate promise that the auction would have been without reserve.

After the sale is completed, a problem that might occur is the refusal of the purchaser to fulfill his commitment to pay the price agreed. In such occasion he is regarded to have committed a breach of the contract of sale and in doing so he is legally responsible to pay damages to the seller.

The vendor is considered to be the innocent party and therefore is expected to diminish his loss and damage by taking logical steps to confront the problem. The proper procedure to follow is the repetition of the auction and the purchaser who committed the breach is invited to participate since the outcome of the second auction will determine whether the seller suffered any loss or damage. Generally, the compensation of the vendor is assessed on the difference in the price, if there is any between the two auctions plus interest and any expense needed for reorganizing and repeating the auction. The above mentioned compensation can be claimed from the purchaser who refused to execute the sale contract.

Advantages of buying from auctions

The fact that the properties sold in auction are being listed in catalogues with pictures and full details allows you time to investigate the property as an investment, before the actual bidding day. You can even visit the area and see for your self if it caters for your individual needs.

Properties sold through Bank auctions can be an easy way to buy in a low price. Properties located in areas that seemed untouchable or were not for sale can sometimes fall into the hands of banks. The reserve price is most of the times the amount of money the owner owed to the bank plus interest. This means that you may manage to purchase the property at a low bidding price.

Properties sold by Auction Houses can be usually characterised as exclusive and one of a kind. Many owners of luxury and unique properties prefer to sell through auction Houses as the procedure is safe and offers the chance to increase their profits. You never know what opportunities will come along, so it is a good idea to stay in contact with several auction houses to be privy of the properties they deal with.

Purchase through auction is not a widely selected way to buy a property. However this is a great advantage for those who attend auctions as the less people attending the procedure of the auction the more chances you have to bid a property at a desirable price.

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