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General information about Mortgage Auctions

A foreclosure sale is the process by which a property is auctioned off because the original owner couldn't cover their mortgage. A financial institution, such as a bank or asset manager, repossesses the property and sells it at a price below market value to recover part of the outstanding debt.
Yes, it's completely safe, as long as you have the right legal advice and know the details of the process. Since this is a judicial or banking procedure, it's essential to be sure.
Foreclosed properties typically sell at a significant discount compared to traditional properties. However, it's important to keep in mind that these properties may require a waiting period to take possession and may be occupied by the previous owners, making pre-viewing impossible.

Purchase Process

No, the process is simple. Initially, you need to review all the documentation and contracts. Once everything is in order, the signature takes place before a notary public.

The purchasing process generally includes the following steps:

  • Review the list of available auction properties.
  • Verify the legal documentation and the status of the property.
  • Make a purchase proposal.
  • Sign a promise contract.
  • Schedule an appointment at the notary public.
  • Sign the transfer of rights at the notary's office.
  • Make the agreed payment in cash.

Financial Aspects

No, credit is not accepted, as properties for sale often have outstanding liens, which prevents any financial institution from granting credit for this type of transaction.

Yes, in addition to the price of the property, you must consider expenses such as:

  • Legal fees.
  • Payment of taxes, such as the Real Estate Acquisition Tax (ISAI).
  • Notary fees.
  • Possible outstanding payments for services or debts on the property.

Risks and Considerations

The main risk when purchasing a foreclosure sale is the waiting time, as in some cases the foreclosure and possession of the property can be delayed. However, this risk is mitigated with our buyback guarantee or "cash back," which allows you to sell your property with us without having to wait until the end of the process to obtain a profit.
In many cases, no. Properties on foreclosure are often occupied, so you may not be able to schedule a pre-purchase tour unless you're buying an immediate delivery.
Si la propiedad está ocupada por el deudor original o por inquilinos, será necesario iniciar un proceso de desalojo legal después de la adjudicación.

To evaluate whether it is a good investment, it is important to:

  • Conduct prior research on the property's market value.
  • Evaluate the legal risks and the time it may take to regularize.
  • Compare the auction price with potential additional costs.

Yes, once the legal process is complete and you have the property awarded and registered in your name, you can resell or rent it like any other property.

With our buyback guarantee or "cash back," you don't have to wait until the end to make a profit. This option allows you to sell your assignment with us and recover your investment with interest as the process progresses.

On Assignments of Litigation Rights

A litigation assignment is the transfer of a person or entity's right to sue in court, either as a creditor or plaintiff, to another person or entity. It is a common tool in real estate investing, especially in properties facing legal disputes or foreclosure proceedings.
Before making a purchase, ensure that the transferor has the legal capacity to assign those rights. Verify that the disputed right is duly registered in the Public Property Registry or in court records and that there are no other liens or claims against the property.

Warning signs include:

  • Lack of clear documentation.
  • Offers that seem too good to be true.
  • Sellers who refuse to provide information about the legal status of the dispute.
  • Pressure to make quick decisions. Always insist on reviewing complete documents and seeking legal advice before proceeding.

You must request:

  • The duly signed transfer of rights contract.
  • A legal report on the status of the litigation.
  • Public Registry Certificates.
  • Legal records.
Risks include the possibility that legal deadlines may take longer than expected. It's also crucial to ensure that the assignor has the legal right to assign the rights.
If you suspect fraud, stop the transaction immediately and seek legal advice. You can also consult with regulatory authorities or report the case to the appropriate institutions to initiate an investigation.
Absolutely. You should always research the seller to confirm their legitimacy and experience in the industry, and check if they have a track record of selling litigation rights. Ask for references and find out about their legal history, if possible.
A specialized attorney is key in this process. Our legal team has the strength and experience to accurately rule on each of our cases, avoiding risks for our clients. They will review the documentation, confirm the legitimacy of litigation rights, and verify that the assignment agreement is properly structured, ensuring there are no hidden risks.
Is it common to use trusts in these transactions?
There are several ways to protect yourself against fraud, such as using public notaries, hiring specialized legal auditors, and verifying your rights with the Public Property Registry or the court system. You can also choose to work with reputable investment platforms that have vendor verification procedures.
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