Why legal advice matters when buying assets at judicial auctions

Buying movable assets and real estate at auction may seem daunting at first, but with good advice it becomes a very profitable acquisition, free of unpleasant surprises.

Why buy at a judicial auction

Judicial auctions have become a new option for those who want to buy and invest in movable assets and real estate. Buying property at auction is a growing practice: following the financial crisis Brazil faced in 2017 and 2018, the number of properties returned to creditor banks or repossessed due to default keeps rising, and through judicial enforcement proceedings these properties are passed on to auction companies to be sold.

The difference between a direct, traditional purchase and a purchase at auction is that, at auction, the sale is ordered by a judge, through court proceedings that took place over a certain period of time.

What to review before bidding

This is where capable, specialized legal advice is needed to review every stage of the court proceedings up to the moment the property went to auction, as well as the stage after the auction, when the procedures for registration and possession of the property begin.

When it comes to investments, you cannot be too careful, and the acquisition documents must be carefully studied by a qualified professional so that everything is completed as planned.

Every auction has its own rules, set out in the auction notice, which needs to be reviewed by someone familiar with it. Some purchases can even be paid in installments.

It is also necessary to analyze all possible costs, fixed and variable expenses, the viability of the property and the court documents. This is extremely important for the deal to succeed and to avoid surprises. When choosing a property, you need to assess all its conditions, both the physical property and the documents presented in the proceedings.

Preventive advice helps buyers not only make a good deal but also guard against future problems that could lead to the loss of large sums.

After the purchase

After the purchase, there are also many procedures that call for a good lawyer: registering the property with the local Real Estate Registry Office, the ITBI property transfer tax, whose calculation rules vary from place to place, any outstanding property tax (IPTU), water, electricity and condominium fees and even whether the property is occupied by a resident, the debtor, a tenant or someone else.

Movable assets and real estate can be bought at auction by individuals or companies, whether to use the asset themselves or as a business opportunity for resale, leasing or investment.

With good advice, buying assets at auction is an excellent business opportunity that can bring the investor significant gains, and it is increasingly becoming an excellent investment option.