As it is today and will remain for a while, public property sales are held in the local parish hall, in the village pub, etc. From this year on in May 2018, this will change because then one can also offer a property via a digital online platform where public sale is regulated as such.
How is the online sale of a property via online platforms?
It is impossible to imagine life in our current society. The digital age has been around for a long time. Paper use is minimized and most is digitally processed and stored. That will be no different with the public sale of real estate. From May 2018 it is allowed to sell a building via a digital online platform. Of course, not just any platform because these platforms are strictly regulated and monitored. In addition, private individuals cannot simply put a building into a public sale. That still needs to be done by the notary. Below the course of public sale via the internet.
In fact, online public sale is done in a similar way as it is today in the traditional way. First, the notary will announce the property with all possible information regarding the property. The notary will request the necessary documents that are required for the sale of a property. Dates are made available at the property when you can visit the property. The public sale is then initiated. The big difference here is that in the traditional way the public sale becomes complete in one day when there is no right to a higher bid. Via the online platform, the notary can determine in consultation with the seller which bidding strategy they use. The bid can be rounded off to 1 day, 2 weeks or even months. The bidding period is of course laid down in advance.
Attention! Every bid is legally valid. You cannot withdraw a bid!
The terms and conditions of sale are also no longer read as is the case with a traditional public sale. However, these documents must be available on the online platform so that you can read them yourself.
When the offer period has been completed, the buyer is invited to the Notary’s office. Here too, the notarial deed is not signed immediately after the end of the bid period, which is the case with a traditional public sale where the deed is immediately signed by the winner (of the highest bid) of the public sale.
Advantages of online platform for public sales?
The benefits that can be cited are:
- The potential buyer does not have to take time off to go to a public public sale.
- The bids usually run over longer periods of time, giving potential buyers more time for a mortgage loan.
- It is possible that bids can be higher due to the ease of bidding via the online platform. This is of course an advantage for the seller of the property.
- The notary is given more time.
- All required documents are uploaded on the online platform for inspection. This is a major advantage since the terms and conditions of sale are always made available for inspection. For example, you do not have to contact the notary yourself to inspect certain documents that have so far only been available for inspection at the notary’s office.
- You have some evidence placed by the notary on the online platform such as the mention of a BPA.
- The total cost that is calculated for the bid for public sale is lower since a number of costs are eliminated, such as the costs for recording a day, seat, travel costs, etc.
Since May 1, 2018, it is possible to include a condition precedent in the sale agreement with a public sale to obtain a loan.
What about a mortgage loan with an online public sale?
In the past people had to have the money in their pocket so to speak when you bought property through a public sale. Because within 5 days the general costs must be paid and within 6 weeks the full amount. Not obtaining a loan was no excuse for not completing the purchase. That has now changed. At the buyer’s request, a condition precedent can be inserted with regard to obtaining a mortgage loan. You can therefore apply to the bank for a loan even if the property has already been allocated to the buyer. That is not possible without paying an advance. The buyer will (depending on how determined) have to transfer 2% of the purchase agreement to a third-party account of the notary. Only then can the request for a condition precedent be approved. One gets 4 weeks to get this approval of mortgage credit from the banks. If you are refused by 3 different banks, you are exempt from purchasing the property. Watch out. You will then have lost the 2% advance payment. Borrowing money for the advance itself is not a good thing. Make sure that you can at least pay all the advance payments that are included in the deed of sale.