26 January, Il Sole 24 Ore
The possibility to find online all the documents for the property you want to buy and all information concerning the procedure to follow to acquire it on auction has simplified the access of “non-professional” buyers in the last year. In the following months, the digitalization process will go ahead with the activation of the Public Sale Portal established by the law 132/2015 and managed by the Ministry of Justice. The website is already active but only a few advertisements have been published so far.
The website is supposed to be fully operational in three months, as planned by the ministerial decree of 5th December 2017, which has been advertised on “Gazzetta Ufficiale” earlier this year on the 10th January, followed by a public statement of the technical specifications published on the 20th January.
The regulation implies that not only the announcements related to the ongoing procedures should go online and be available for consultation, but also the whole executive procedure should take place on the internet, from the request to visit the property to the participation in the single auctions, even though in the actual state it’s difficult to imagine. Therefore, it will be possible to make offers and relaunch online from any part of Italy as well as from abroad.
«An important innovation awaiting practical test – comments the notary Valentina Rubertelli, the coordinator of the auction division of the Roll of Notaries – but it should not catch unprepared the Court experts in carrying out all the activities related to auctions, having adopted in the last few years ad hoc instruments, even though they’re still waiting for the last ministerial operational instructions. The Roll of Notaries has already its own online platform, Ran, that is currently used especially for public divestitures, but it has also served bankruptcies and executive procedures for nearly 184million».
Once fully operational, the portal will probably allow monitoring the number of ongoing procedures and those awarded. Without official numbers, the reduction of procedures is a trend on which all the operators agree but it’s difficult to quantify with precision. According to the research by Sogeea, which for several years has been tracking the ongoing executive procedures for properties, the difference in the recordings between 2017 and 2018 is almost 41%, with 19,960 procedures active since the beginning of the year. The Observer of Assicom Ribes (Technoinvestement Group) counts nearly 234.000 procedures (including those of non-residential properties) for 2017 with a reduction of 6% from 2016. Astasy (shareholder of Npls Re Solutions of the group Gabetti) reports similar numbers, estimating residential assets for 70%, but with an annual decrease of 12,4%.
Fewer substandard loans and more transparency
There are different factors contributing to this ongoing reduction. Firstly, the improvement of the credit scenario. On one side, mortgages have become more convenient, considering the rates close to zero and how difficult it was to renegotiate a funding with better terms until a few years ago; on the other side, there is more selection when accessing credit, with a default rate according which Crif assessed in 2017 at 1,7% (a loss of 0,7 points in the last 2 years). Others decisive factors are then the decrease in the number of bankruptcies and the mitigation of the financial crisis together with the resume of transactions on the property market. A better transparency has also contributed increasing the demand and hence the awarded properties.
Real and cultural obstacles
The stock of properties is difficult to work off and there are still several inquorate attempts of auction before reaching the awarding, 3.6 attempts on average for a duration of over 5 years of the procedure according to Assicom Ribes – also because this instrument has always been seen with suspicion. “These obstacles are of psychological and cultural nature, nowadays everyone can participate in auctions. I would recommend being assisted by a professional – continues Rubertelli – only in case of actual technical difficulties. Especially when reading the appraisal, it is necessary to pay attention to unauthorized construction which in the worst cases can’t be legalized even after the awarding. Generally, during the transfer decree by the judge, the detrimental claims are cancelled from the property.” A common fear is the difficulties in vacating the property by the old defaulting owners or tenants. “This is less likely now – says the notary – nowadays, the judge has to order to vacate the property at the moment of the award as well as when issuing the sale warrant. In these cases, the awarding is quicker. Those who had their property seized must understand that it is in their interest to clear the house and keep it at its best. In fact, the auction does not extinguish the debt, hence it is better to facilitate the sale as quick as possible and at the best price”.
The auction prices
When the auction is inquorate, the judge can lower the starting price, generally, a property is sold below 50% of its appraisal value. From the buyer point of view, this can be an advantage, but we should take into account that attractive properties don’t lose value as they sell quickly, unless they are not sold through an agreement previous the execution, a method increasingly used by banks whenever possible. On the other hand, the estimated price can be misleading because it is referred to several years before the auction when the market quotation was higher. “In 66% of the houses for sales, the starting price is lower than 100K euro – notes Sandro Simoncini, Sogeea president– 88% if we include also the range between 100 and 200K euro. The demonstration that recession years have weakened especially the middle-low income bracket”.
Source: Il Sole 24 Ore
Translator: Cristina Ambrosi