In the area of construction machinery we often hear about judicial auctions. This is not surprising, as you can get great bargains with this method of purchase!
Many, however, do not even consider this option because it is surrounded by a halo of clichés. In this article we would like to shed some light on this and describe to you in a simple and straightforward manner how judicial auctions for construction equipment machines.
What is a judicial auction
In a nutshell, a judicial auction consists of the sale of a property at auction by the court. This usually takes place when the owner, which can be a private citizen but also a legal entity such as a company or association, is unable to repay its debts.
In such cases, the court proceeds to foreclosure, i.e. the forced expropriation of the property, which is then put up for auction.
Judicial auctions: who can participate?
Judicial auctions are therefore open to everyone. It is absolutely not true what is often said, i.e. that you need special skills or permits to participate in the auction. In reality, all natural and legal persons can participate, either personally or by proxy to professionals or specialised agencies. The only prerequisite is the financial readiness to purchase the property for which one is participating in the auction.
Citizens of all European Union and European Economic Area countries may participate in the auction. The same applies to non-EU citizens with residence in Italy or in possession of a residence card.
The only person who cannot participate in an auction is obviously the former owner of the property.
Judicial auctions can be aste giudiziarie mobiliari, for all movable property (and thus auctions for earthmoving machines fall into this category). The aste giudiziarie immobiliari concern with real estate, i.e. houses, warehouses and land.
In this article we will focus on mobiliari judicial auctions.
How do MMT judicial auctions work?
Do you want to participate in a judicial auction but don't know where to start? Below we will summarise the 5 steps you need to take.
Step 1: search for the auction.
The best way to search for the auction that is right for you is good old Google. By typing into the search engine keywords in Italian such as "escavatori aste giudiziarie" (excavators judicial auctions) or "aste giudiziarie mezzi movimento terra" (judicial auctions earthmoving equipment) you will find both official court lists and aggregator portals specialising in truck auctions.
Step 2: Delve into the details of the asset.
Each construction vehicle up for auction has a factsheet where you will find all the information you need to make an informed choice.
Step 3: Check your financial readiness.
The auction requires you to be able to pay at least the starting price. If you can do this, you can proceed!
Step 4: Ask to participate in the auction.
The procedure is relatively simple. You must file your request with the competent court office at least 1 day before the start of the auction. The request, in addition to containing the documents required by the court, must contain a non-transferable bank draft as security for 10 per cent of your bid.
Step 5: You participate in the auction.
Here you are confronted with two different types of auctions (con incanto and senza incanto) and in two different modes (online and in-person).
Judicial auction “senza incanto”
In this judicial auction, the sale is conducted without the participants in the auction competing with each other to win the assets. The participants then deposit their final bid in a sealed envelope. The judge opens the envelopes and awards the property to the person who bid the highest amount.
Judicial auctions senza incanto are more common when the value of the assets for sale is low or when there is not a high probability that there will be many participants. In this way, the sale process is quicker and less complex.
Judicial auction “con incanto”
Initially, the procedure is identical to that of an auction without an auction. The participants deposit their bids in sealed envelopes.
The judge opens the envelopes and proceeds with the auction, starting with the highest bid. After that, the participants can raise their bids in increasing amounts.
If there are no bids after three minutes, the last bid is the final bid and the participant is awarded the property.
Online and in-person judicial auctions
Court auctions are generally organised at the court or place specified by the competent judge. However, due to the COVID-19 pandemic, many court auctions are now organised online to minimise physical contact and ensure the safety of all parties involved.
Online judicial auctions in italian are often referred to as aste telematiche. They are a very important and very useful innovation: they allow you to access auctions in distant cities that you would not be able to attend in person, multiplying your chances of getting a great deal!
MMT judicial auctions advice: how to deal with them calmly
We have been working with construction machinery for more than 50 years, and we have often come into contact with the world of judicial auctions. Even if attending an auction is not as difficult as people often think, mistakes are always just around the corner.
That is why we want to give you some tips to avoid the most common mistakes:
- The golden rule is to know what you are doing. Before entering the auction, make sure you are well informed about the construction machine you want to buy, including its condition and market value. This will help you make a reasonable bid and avoid overpaying. Buying at auction is not always cheap!
- If possible, check the machine before bidding to make sure it is in good condition and meets your needs. As we said before, every construction machine that is auctioned has a file with all the details. In any case, examining it up close is always the best!
- Many people are in apprehension by the idea of participating in an auction. If your fear is that you do not have enough experience, you can turn to a specialised agency or a freelancer who will participate on your behalf.
- Don't underestimate the hypnotic power of auctions! It is very easy to get caught up in the excitement of competition and overpay. Always set a spending limit before the auction starts and force yourself not to exceed it.
- Remember that you are not buying the vehicle from a dealer or a private person, but from a court, which is a public institution. Consequently, you have to take into account that delivery times are not as clearly defined as with private companies, and they are relatively long (in the order of several months). In addition, in some cases you have to pay VAT calculated as a percentage of the amount of your offer. Take these aspects into consideration before participating!
It only remains for us to wish you good business at your next construction equipment auction!