Trades and auctions for bankruptcy of individuals

The essence of a bankruptcy auction

Bidding where real estate owned by a bankrupt person (individual or legal) is put up for sale is called a bankruptcy auction. The funds received from the sale of property are transferred to the creditor to repay the debt.

Note: For the borrower, such transactions are extremely unprofitable, but they allow you to cover the debt to the credit institution.

Trading is carried out in three main steps:

1. Primary for promotion. This stage means that the property first goes to auction at the average market value. The price gradually increases, but if no buyer is found, the lot is moved to the next stage.
2. Repeated. During this procedure, the value of the property is reduced by 10-20%, after which the second round of increases begins. But if at this stage no one can find anyone willing to buy the property, then the premises move to the final stage.
3. Public. For potential buyers, this phase is the most attractive. According to the terms of such an auction, the lot is sold with a certain price reduction step.

The risks of buying an apartment through bankruptcy auctions are listed below.

Main aggregators of bankruptcy tenders

To more easily and quickly search for the lots you are interested in, you can use special services. The most popular aggregators:

• Tbankrot.ru;
• Probankrot.ru;
• Bankrot.pro;
• Bankrotstvo.me;
• Вankrupt.centerr.ru;
• Вankrot-spy.ru;
• Вcart.ru;
• Вankrot-pro.com;
• Heveya.ru.

Example of aggregator functionality

The services contain not only the function of searching for the necessary information, but also such additional options as a calendar reminder of upcoming auctions, monitoring, lot analysis, reliable photographs of property, and links to a federal resource.

BankruptBase - collects bankruptcy auctions from 50 trading platforms in one place. All basic functionality is available for free, including links to trading on the ETP, contacts of organizers and arbitration managers.

Who is the seller

There are several types of persons who sell bankrupt property. These include:

• government agencies;
• credit and financial organizations;
• commercial companies and enterprises.

Government agencies

For real estate departments of regions and settlements, this option for selling city and municipal premises is the only legal way. For example, you can consider Moscow. City auctions are held regularly. The list of objects put up for auction and their prices can be found on the web page of the Moscow real estate department. Moreover, premises from a variety of segments are participating in the auction:

• from luxury housing to the most economical option;
• escheated apartments (when the owner of the property dies and the living space is transferred to his own municipality due to the absence of heirs);
• residential premises for which there is no demand due to their remote location.

What property is being put up for auction?

Bankruptcy auctions for individuals have the right to sell a completely variety of assets. The list of objects owned by indebted citizens is quite large. In the list of lots, auction participants can find everything they need. The most common assets are listed below:

• organizations;
• motor vehicles;
• rights of claim;
• factories;
• Appliances;
• real estate;
• enterprises producing all kinds of goods;
• Equipment for the production of;
• Appliances;
• money;
• specialized equipment;
• land plots for various purposes;
• company trademarks.

Price

The auction type of sale means that the prices offered are significantly lower than market prices, but the seller cannot provide such a guarantee. The new owner will be the buyer whose offer will be more profitable, that is, with the highest cost.

Fact: Based on the analysis of statistical data, it was revealed that prices for apartments purchased at open auctions are approximately 5-10% lower than the market average.

The most profitable lots with prices much lower than the market price are sold at closed auction sales, where only a limited number of participants are allowed. As a rule, illiquid housing is put up for public auction, i.e. problem areas of the secondary market. Therefore, this option for purchasing living space is not very popular among ordinary citizens. Today, the supply of real estate is much higher than consumer demand, that is, buyers can choose among a huge variety of apartments the most suitable in all respects (area, location, price, etc.). And at auction, real estate is mainly purchased by investors, who then resell it for a profit.

Making money on bankruptcy auctions: pitfalls that every beginner should know about!

These facts are deliberately kept silent during training programs. And yet, only an experienced trader can be aware of all the pitfalls that you encounter in bankruptcy auctions. A beginner can only learn about them from this article, so read carefully below:

1. Participating in auctions is when 98% of the time is spent searching for a suitable lot. It will take a very, very long time to look for something worthwhile. This is mechanical and routine work, which only diligent and patient people can successfully perform. Another 1.5% is processing information on the offer you like, and 0.5% of the total time is spent on completing the transaction. But few people are able to hold out until the last stages; more than half of the beginners merge after two days of unsuccessful searches for a liquid lot.
2. You can never buy real estate or a car at a price of 1% to 5% of the market value at auction. At least those on which you can make money. No, of course, at the last stage of the public offering you can find an asset that would be sold at 99% cheaper than the declared value, but only trash reaches such a price threshold. For example, a dilapidated house in a town with a minor registered in it, which you can neither sell nor exchange, or land in some remote place that even local realtors see no point in selling due to low demand, poor location and low purchasing power among the population. Liquid lots are sold out in the first minutes after the auction opens, and their price never drops to the fabulous threshold of 1% of the original amount.
3. Lots that are “tasty” at first glance will disappear after inspection in real life or even at the stage of familiarization with the documentation. What could happen? For example, a lot may be lost during bankruptcy proceedings. Or, for example, even though the property has been declared for sale, a property dispute regarding it is being considered in court, and therefore it is impossible to inspect it. Alternatively, the car may be stolen or under arrest (the same can happen with real estate), or there will be no title documents for the property. In the end, the bankruptcy trustee may simply be inaccessible and not make contact.
4. In your pursuit of a promising lot, you will compete with robot snipers. Some bankruptcy auctions are carried out according to the type “whoever submitted the application faster is the winner.” And in such races, the application that is submitted automatically will always win, since it takes the robot 5 seconds, and the real buyer takes from 30 seconds (but this is a record!) to 2 minutes. As a result: the “delicious” lots go to robots. And although the new rules for holding bankruptcy auctions have almost eliminated this inconvenience, if the organizer chooses to determine the winner based on the “who is faster” principle, it is unlikely that a person will be able to compete with the robot in terms of the speed of filling out data. And besides, Internet speed, digital signature load and other factors will play a role.

By the way, anyone can buy a robot to participate in bankruptcy auctions, but be prepared that such developments do not have very favorable reviews from users who have already tried them. There are software options within 25,000 rubles. There are also more advanced offers, in which the software is sold complete with a laptop and training. Their price equivalent is close to 150,000 rubles. And the third option is robots, which are provided for use in exchange for a percentage of completed transactions. But here everything is completely murky. You will have to send a link to the lot to the developer, and he will configure “something” there. At the same time, where is the guarantee that he won’t buy it himself...

1. There are a lot of fraudulent items at auctions that do not exist in real life. If you come across a lot, an “investor’s dream”, in which everything is perfect, and an acceptable price is set for it, do not rush to calculate the profit in your head. Remember the proverb about free cheese and a mousetrap. If such property existed in real life, it would either be taken by creditors, or at an auction an adequate price would be set for it, comparable to its liquidity.

How do scammers act? They register on the EDS, add information about the real debtor (anyone who has an EDS can do this) and his bankruptcy trustee, photos and even a property valuation report, and then collect the deposits and disappear with them at the start of the auction.

How to spot a fake lot? Three parameters (especially if they are present at the same time) can indicate that scammers want to scam you:

• Reduced price. A good lot will always have an appropriate price and many people willing to buy it.
• Detailed description. As a rule, real auction organizers have too little time to upload a photo report for each property to the public and other related information. The description of the real property should be dry and laconic, as in the screenshot below.

• Short deadline for submitting applications. On the same screen you can see that more than a month is allotted for submitting applications. If the organizer is in too much of a hurry and sets a deadline of a week or even two, this is a “bell” for the participants. Perhaps he is in such a hurry to have time to pull off his scam.
• Special account. A transaction is considered transparent when the deposit is transferred to the manager’s account at the ETP. If an additional new account is indicated, this is alarming.

To be sure, go to the debtor's history on Fedresurs and see what is there about primary and secondary auctions. If there is no information, this is 100% fake, because scammers usually immediately offer lots at 1% of the market value of the property. Plus, compare the name of the organizer and KU. They should be the same.

1. It is better not to contact the debtor at all, and if you buy it, then before that you need to study in detail the information about the debtor. Agree, there is a difference whether to buy the debts of Uncle Petya, a bankrupt individual entrepreneur who has already sold all his property, or a large investment company that, until the moment of bankruptcy, was not involved in scandals that spoiled its reputation. In general, finding a good, liquid, clean receivable, with a money-back guarantee, and even making a profit on it, is almost impossible. Well, or at least you will have to analyze a LOT of options.

Flaws

There are many more disadvantages to this housing purchase option. Therefore, before buying living space at auction, you should take into account the likelihood of problematic situations arising. The disadvantages of purchasing an apartment at auction include the following cases.

Legal proceedings by the previous owner

Buying an apartment as collateral from a bank may result in litigation from the previous owner. In fact, the buyer purchased a vacant home, but the previous owner may not agree with his losses and wants to return his living space by filing an application in court and appealing the auction sale. The court's decision cannot be predicted - it depends on the circumstances of each specific case.

Debt for housing and communal services

An important disadvantage of buying housing at auction is the possibility of receiving a large debt for utilities along with the apartment. For example, the former owners did not pay housing and communal services, and service organizations turned off electricity, gas, heating, etc. In order for old debts to be written off, the new owner will need a lot of time to deal with management companies or go to court.