Auction Assignments: The Most Dangerous (and Profitable) Shortcut to Real Estate Auctions

The auction transfers are like a scalpel: in expert hands they work wonders. In inexperienced hands... they cut you open. People think that a foreclosure is "just another formality". But it is, in fact, the easiest transaction to ruin in a real estate auction.

Every week we see the same pattern: someone has won an auction, thinks they can assign it "just like that," and finds themselves caught between deadlines, formalities and legal concepts that no one explained to them. The theory seems simple: a successful bidder transfers to a third party the right to acquire the property before it passes into his name. In exchange, the assignee pays the price of the assignment.

1. What is an assignment by auction?

The assignment of auction is a separate legal transaction, but linked to the auction, where the executor or a subsequent creditor assigns to a third party the right to keep the property before the title passes into its name. It does not convey ownership: it conveys the opportunity to acquire it.

2. Who can assign (and who cannot)

According to article 647.3 LEC, only the executor or subsequent creditors who have participated in the auction reserving this right can assign. An ordinary bidder cannot assign.

3. Deadlines: where most people stumble

The bank has 20 days to request the adjudication and 40 days to deposit the auction price. The assignment must be exercised before the end of this period and before or simultaneously with the payment. If it is exceeded, it is no longer an assignment: it is a sale and purchase with a very different tax impact.

4. The price of the assignment: freedom... and risks

The price may be equal to, higher or lower than the adjudication price. The only price that affects the mortgagor is the adjudication price.

5. The formalization

It must be carried out before the LAJ, with the assistance of the assignee, and be documented before or simultaneously with the payment. It is then registered in the Land Registry.

6. Frequent errors

• Believing that any bidder can assign.
• Assuming that it can be done after payment.
• Not controlling the exact deadlines.
• Not coordinating LAJ, assignor and assignee.
• Negotiating prices without understanding the consequences.
• Failure to foresee deserted auctions.

The assignment of auction is a powerful mechanism, but technical and delicate. At Valido Home we manage auction assignments and we know how to avoid mistakes that can cost thousands of euros.

ATTENTION: we are preparing a comprehensive guide to auction transfers with step-by-step instructions, templates, and a professional checklist. If you are interested, sign up for the waiting list.