Bailiff auctions – a good way to acquire a property?

If you are buying a property, you usually want to live in it or rent it out, or you are buying it for a so-called "flip" - an increasingly popular way of making a profit by renovating a property and selling it at a higher price.

Whatever your goal, you can buy a home through an estate agency in Katowice, but you can also acquire one at a bailiff auction. The "flipper" can make the biggest profit from such a purchase. In theory it is a very good investment, but is it really? Theory may not hold up in real life. Let us turn to practice.

What is a bailiff auction?

If debts are not repaid, the bailiff begins enforcement proceedings. Their aim is to seize the property and put it up for public sale. The bailiff may also seize movable assets. Part of a property may be put up for auction, held either under full ownership or under a cooperative ownership right (spółdzielcze własnościowe prawo do lokalu).

How to find information about properties put up for auction?

The simplest way to find the auctioned properties that interest us is on the website www.licytacje.komornik.pl, which contains bailiff notices from all over Poland. The traditional method is to find information on the notice board at the court or the municipal office. The bailiff is obliged to announce the auction at least two weeks before its scheduled date.

Who can take part in an auction?

Any individual or legal entity. The bailiff, the debtor's closest family, officials and foreigners without the appropriate permits cannot take part. Also barred from bidding are people who have won a given property but failed to pay the amount due for it.

How do you register for an auction?

First, we contact the specific bailiff's office responsible for the given property. There we will get access to the documentation and the valuer's opinion in the form of a so-called valuation report. Unfortunately, it is not always possible to view the property itself. If we are interested in taking part in the auction, we must pay a security deposit (rękojmia) of 10% of the appraised value.

What if the auction does not end in a win?

In the first round the bailiff puts the property up for an amount not lower than 75% of its market value. If, for example, the flat does not find a new owner, the second auction starts from a minimum of ⅔ of the property's value.

How the auction proceeds

The judge announces the minimum amount by which a bid can be raised. The auction starts from the starting price. If we lose, the deposit is returned to us. If we win the property, the amount paid at the beginning is retained and credited towards the price of the property won at auction.

All rosy? Finally, a fly in the ointment

We have mostly talked about the property, but what about the debtor who occupies it? If we win the auction, we have to reckon with the people living there. The process of eviction and applying to the authorities for replacement housing is very long. It may also involve additional costs. Eviction itself is subject to various exceptions. For example, it cannot take place from 1 November to 31 March or during a pandemic. Exempt from it are pregnant women, disability pensioners, retirees entitled to social assistance benefits and people with disabilities.

Bailiff auctions are a good idea if we are sure that we are buying a property without occupants. In other cases the road to achieving the goal is long and may additionally involve court costs. There is also an ethical aspect. If you have doubts, perhaps a better option is to buy a flat through an estate agency in Katowice.