Bidding and bankruptcy auctions are an interesting topic for discussion. In the network there is an opinion that it is possible to earn decently at the auction. How this system works and whether it really is of interest to the average person, how much money can be earned from this is discussed in order in this article.
Participation in such auctions can attract negative energy, because the property is sold for debt, on the other hand it is designed to help buy real estate, a car or other valuables at the best price. What is the difference and key points of the initial and repeated trading, how to determine a profitable public offer and what should be in the package of documents as a result of the auction? It should be understood that fraudulent schemes in bidding for bankruptcy are only improving every year, and each of us needs to be vigilant when choosing reliable and proven sites for auctions.
Table of Contents:
- EDS (electronic digital signature)
- Get accredited on the trading floor
- Select the object of the auction
- Create an application to participate in the auction
- Make a deposit
What is a bankruptcy auction?
In a market economy, situations are not rare when an organization, regardless of the form of its ownership, is not able to answer for its obligations to creditors, employees, suppliers. In this case, a decision is made to start the process of declaring a bankrupt, and property objects are to be sold in order to repay debt obligations.
The procedure for the implementation of movable and immovable property of legal entities for the purpose of repaying debt obligations is called bankruptcy auctions. And this method can bring no less than a selected investment portfolio.
Private property sales auctions
The same applies to individuals: a person who does not have the ability to meet credit obligations is recognized bankrupt, and his property goes on sale through auctions and bankruptcy auctions: this procedure is the final stage of registration of bankruptcy status. The process of selling property is not as simple as financial pyramid: all actions are governed by legislation, which clearly describes the whole procedure for follow-up:
- Property valuation;
- Appointment of responsible persons;
- Preparation and implementation;
- Registration and control of the transaction.
Realization of property objects is carried out on electronic trading platforms (ETP). How to participate in bankruptcy auctions and who is entitled to it? Anyone can participate as a buyer - both a private person and representatives of legal entities. A little later, I will talk about how this mechanism works, how and where the tenders are held, and how to take part in them, but first about the most interesting.
What can be bought at a bankruptcy auction
Unbelievable, but true: anything comes across the ETP. It is realistic to find, for example, a bottle of the cheapest alcohol or a whole industrial complex, livestock or scrap metal. As lots (objects of bargaining) any property confiscated by the FSSP is used. What objects are the most valuable at such auctions? Among the most popular lots are:
- Any assets: securities, stocks, bonds;
- Production complexes;
- Warehouse enterprises;
- Warehouses and territories;
- Property rights (very popular lot);
- All types of transport: cars, motorcycles, special equipment;
- Appliances and electronics: household electrical appliances of all types and types (washing machines, refrigerators, microwaves, televisions, laptops, etc.), business hardware (PCs, server equipment, office multifunction devices, etc.);
- All types of real estate (industrial, commercial and residential areas, houses, apartments, offices, etc.);
- Industrial units (equipment lines, machine tools, machines, etc.);
- Agricultural complexes;
- Land objects for any purpose.
A wide list of lots dictates the rules for auctions for bankruptcy: the offer significantly exceeds the demand, so it is possible to buy the property of bankrupts from auctions for just a penny.
The price of other lots is up to 10% of the real value. But such a property, in addition to the extremely low price, has a huge drawback: you cannot see the object of the auction live until you purchase it, an unpleasant bonus is the burden of the object of bargaining (for example, debts for a communal apartment when buying an apartment at auction will fall on your shoulders)
Where to look for information on bankruptcies and their property
Any information, all about bankruptcy trades and lots that are sold on them, is publicly available and is presented in official print media, on the ETP or online services that combine information from the first two sources, systematize and bring in a digestible form for the user.
The official print edition is the Kommersant newspaper, where the bankruptcy manager provides data on current trading and the lots involved in them. The information is duplicated in the GIS - state register of information about bankruptcy. The best ETP and how to buy real estate at auction, we will look at later.
How to become a bankruptcy bidder
How to bid for bankruptcy and build your business into bankruptcy? Taking part in the auction is much easier than answering the question where to get money for business. Choose an ETP, go through the registration procedure, submit an application for participation in the established form. Then it is necessary to undergo accreditation, fill in the relevant agreement with the administration of the ETP and make a cash advance - the so-called advance, which guarantees the redemption by you of the won lot. The important point is the submission of a separate application of the established form in duplicate for participation in each auction. Consider in detail each step.
EDS (electronic digital signature)
To register for the service, you must have an electronic signature. It can be obtained either at the corresponding trade service or at special certification centers, which are sufficient in each region. An EDS is executed in the personal presence of a citizen or representative of an organization and requires a civil passport, and for representatives of legal entities - information from the Incorporation / EGRIP, statutory documents, a personnel document on the appointment of a manager to a post, a notarized power of attorney for registration.
By the way, the same package of documents is required for accreditation at the ETP. A special feature of EDS is the fact that the number of sites may be limited - you need to clearly understand what electronic resources you are going to work with: this affects the cost of EDS. The average price tag for registration in the country is 2000-2500 rubles. In addition, EDS must be renewed annually. EDS is analogous to an identity card on an ETP and provides access to electronic document circulation, performing functions of verification, cryptographic encryption and ensuring the protection of data from third party access and the possibility of forgery.
Get accredited on the trading floor
Working with the ETP requires the participant to undergo the accreditation procedure: in general terms, you are required to confirm your identity and verify the documents submitted by the ETP. It is required when registering an account (personal account) for individuals and legal entities. The package of documents is similar to the package when you make a digital signature, but for legal entities and their representatives, a notarized power of attorney for transactions on the ETP and a standard decision / protocol on approval of a major transaction are added. Accreditation takes up to 5 days and is valid for 3 years from the date of receipt of the corresponding status. Documents are provided via the Internet (scans). Only after accreditation is it possible to check on your experience how bankruptcy trades go.
Select the object of the auction
The answer to the question of whether it is possible to make money on bankruptcy trading directly depends on the ability to choose lots correctly. For an inexperienced participant and venture investment, and the choice of lots is difficult and can hide a sufficient number of pitfalls. In order not to miscalculate and not receive illiquid property, you can secure yourself by taking a number of actions. First, you can invite an expert who will give a real assessment of the quality characteristics and market value of the object of bidding. Secondly, it is advisable to choose lots in your region: this makes it possible to find and evaluate the object before the sale transaction is concluded. Thirdly, information on the subject of bidding is contained in the product card, where you can find contacts of the responsible person and meet in person to study the characteristics of the object. Fourth, it is better to take an independent consultant in a particular field for such a meeting. Yes, the services of a specialist will be paid, but this will save both money and time.
Create an application to participate in the auction
An application is created for each implementation activity on the ETP separately, the transfer is carried out via the Internet: application, package of electronic documents, EDS. An application for newbies may require consultation with ETP specialists: the rules for filing for sites on bankruptcy are different, as is the package of documents.
Some ETPs form an application based on the data for your accreditation, others additionally require scanned copies of an extended list of documents (passport, TIN, statutory documents, etc.). Mandatory for all ETP is a payment order - a guarantee that you have made the necessary advance payment.
Make a deposit
The deposit is a down payment transferred to the ETP account in the amount of 5-10% of the initial value of the lot. It guarantees your serious intentions and is a guarantee of the buyout of the lot won at the auction. Most often, it requires an official document confirming the transfer of payment. Therefore, online payment presents serious difficulties. It must be remembered that in different banks transfers may be subject to a fairly high commission, this issue is particularly acute for expensive property. The transfer in the bank is accompanied by a payment order, which should be submitted to the ETP.
How is a bankruptcy auction?
Trades are open and closed. At events of a closed type, the one who offers the highest price for an object wins. At an open event, you must be present in the personal account of the service on the appointed day and hour, personally submitting price proposals taking into account the step (prescribed in the conditions and usually ranges from 0,5 to 5% of the initial value of the lot). All data is confidential - you see only the number of the competitor and the proposed amount. Bidding is as follows.
The object is set at market value. Each participant plays for a raise, based on its capabilities and offering the amount slightly higher, in increments established for this auction. Each step you take can be made no earlier than 30 minutes after the previous one. These are the rules of any ETP.
If at the first stage the future owner is not found - they organize the procedure of repeated trading. The price of the subject of bargaining falls on the interval to 35% of the initial value. This is followed by the same steps from customers as in the first stage. Offer - promotion - determination of the winner.
After the failed second stage, a public offer is made. The price of the object of bidding falls on a certain percentage of the cost over time: the order of reduction is specified in the rules of a particular auction, as well as the timing of the step of reduction. For investors, this is the most profitable bidding stage, as the cost may drop by 99% of the originally set price.
Registration of the results of the auction
The choice of the winner remains for the organizers of the auction: it can be represented by one of two methods. The first involves determining the winner of the first submitter of the offer. The second method determines the winning bidder who offered the best and highest price per lot. Within three days, a documentary protocol on the bidding process and the winner is issued at the ETP. The participant, who won, is obliged to conclude a contract of implementation: the system generates and sends the appropriate package of documents to the personal account.
Failure to sign such an agreement threatens the loss of an advance payment. After the conclusion of the agreement, the party enters into ownership rights and is free to dispose of the lot at its discretion. All questions about trading, participation in them and the design of any documentation can be obtained from the technical support service of the service. Or seek help from independent experts.
How to make money in bankruptcy trading
The scheme, how to make money at bankruptcy auctions, is quite simple. Bidding at bankruptcy auctions provides an opportunity to make a profit in one of three ways. Either you buy property with a view to resale, or engage in intermediary services, or act as an agent at auction.
What is the difference and how to make money on the bankruptcy of individuals and legal entities, and most importantly, how much can you earn? The best part is that buying property from bankruptcy auctions is an absolutely legal activity and, with proper attention, can bring a good income.
Purchase for resale
Buy cheap - sell high. This is the basic principle of earning this method. Yes, indeed, at auctions you can, how to buy bankrupt property for 1% of its real value, and find enough valuable items for which it is easy to find a buyer. However, you need to pay attention to the following points. First, the lot should be comprehensive information. It would be unpleasant to buy an illiquid object at a high price. Secondly, you must be entrepreneurial and have the ability to organize sales transactions. Thirdly, you must have the financial means for the acquisition of the object of bidding, which can be resold for profit. This is a popular way of earning money, so usually net income minus all expenses is no more than 20-30% of the real value of the auction item. The amount of income is directly proportional to the size of the object.
You can earn by becoming a mediator. That is, to assist the inexperienced participant by buying for them. Your commission can be up to 20% of the value of the bidding lot. You can organize the work according to the scheme "fixed% of the difference." That is, buying an object at the lowest possible price, take from the customer the amount that constitutes the contractual percentage of the difference between the market value of the lot and the amount at which you purchased the object.
Participation as an agent
Such earnings imply your participation from your electronic account in the interests of the person with whom you have entered into an appropriate agency agreement. Your responsibilities will include the preparation of documents, applications, direct participation in the auction for bankruptcy, customer consultation. You can earn exactly as much as you appreciate your potential. It is important to remember that anyone can become a bad agent. But a good one must thoroughly know all the nuances and subtleties. Understand the question - customers will be pulled.
TOP trading sites
I made a rating of the most relevant, in my opinion, ETP. They specialize in the sale of bankrupt assets. Contain current offers on property of individuals and organizations. Work with services is quite simple: ETPs have an intuitive interface, round-the-clock technical support and provide an opportunity even for a beginner to figure out.
- Sberbank-AST. Sells the property of companies that not only failed to earn a million, but also failed in commercial plans. As a result - failure to repay debts on the obligations taken (credits or loans). There are not so many lots, but they are of considerable interest for investors who thought about where to invest money in 2019 year.
- Manufacturer. One of the best services that are available today. Bankruptcy lots are presented in sufficient quantity, management is understandable. To participate in the auction for bankruptcy can, both novices and experienced users.
- Baltic ETP. Like all sites of bankruptcy trades, this service is for commercial trades and property sales auctions. Very simple and understandable service, you can participate with any EDS. Bankrupt auctions of this service deserve good feedback from experts who know well, how to become rich.
- Lot-Online. The best service in terms of bidding: auctions are divided into categories. No need to scroll through a long list of offers. In the same place, those wishing to earn money have the opportunity to receive EDS and accreditation in a short time.
We have examined a rather interesting niche in economic relations - bankruptcy auctions, reviews of which confirm that you can make good money here. This is especially true in light of the fact that ruble devaluation going on. It is important not to forget that there is no limit to perfection - you can learn almost everything. Therefore, if you want to try something new - dare. And you will definitely succeed!