- biddit , online auction tool , public real estate sale , public sale , public sale of real estate , real estate , place a bid , bid , bidder , Biddit platform , law firm in Brussels , law firm in Belgium
In 2017, the legislator created the possibility of organising a public real estate sale in a "dematerialised" form, allowing candidate buyers to participate more easily and free from the geographical and temporal constraints inherent to the organisation of a classic ("physical") public sale.
This interactive alternative enables a largely digital approach to public property sales within a dedicated electronic platform, called Biddit. Set up by the Royal Federation of Belgian Notaries in May 2018, this auction tool, which aims to be "simple, reliable, easy and intuitive", aims to put technology at the service of real estate. But is it? And is the system comparable to an ordinary private sale? Find out our answers below.
1. How does this platform work?
Candidate buyers need to log in with an electronic identity card (and card reader) or via the Itsme application. This allows the notary to verify the identity and age of the bidders. Once on the site, prospective buyer can see in which price range he can find a property, as there is a starting price for each offer. Each advertisement contains the usual information (location, surface area, condition, etc.) as well as the obligatory documents related to the sale (EPB certificate, electrical installation, soil certificate, town planning information).
Anyone logged in can then place a bid. Potential buyers can see what bids are made, but do not know the identity of the bidders. The seller does not know the identity of the individual bidders either.
Any bids from potential buyers are binding. The notary awards the property to the person who has made the highest bid. If, for example, it later turns out that no loan can be obtained, this will in principle not be a valid reason for waiving the (highest) bid. Buyers should therefore make sure before submitting their offer that they can actually pay the amount offered. This is only the case if the conditions of sale expressly provide for a suspensive condition for obtaining a mortgage.
Moreover, not only is the highest bid binding, but the next four bids are also binding for up to 10 working days after the closing of bidding. If the sale cannot be concluded with the highest bidder for any reason, the purchase contract is concluded with the next highest bidder.
Sellers may not withdraw from the sale process either, except when the desired price has not been reached.
After the auction has closed, the notary notifies the seller of the highest bid. Only if the seller accepts the amount is the property actually awarded to the highest bidder. The highest bidder is therefore not yet certain of the purchase.
The whole process is concluded by contacting the appointed notary to finalise the sale. The sale contract is signed very quickly in the office of the appointed notary. Any bid made by other Internet users will be visible to everyone. The bidding period is also visible and lasts 8 days.
As is often the case online, the bidding does not really start until the last hour. In order to avoid that all candidates bid at the last minute, the system uses an hourglass. In this case, if a bid arrives in the last five minutes, the deadline is extended by another five minutes.
2. When does the payment take place?
The purchase price must be paid within six weeks of the final award.
The costs of the sale, such as the notary's fees and registration fees, must be paid within 5 days.
3. What are the advantages of this platform for the buyer?
The advantages are the following:
- The process is transparent as the prospective buyer can follow the bidding process in real time;
- The auction process certifies that the price reached is the market price;
- Everything is supervised by a notary, including checks on the property;
- The candidate becomes the owner within a few weeks;
- The process takes about 6 weeks, which gives the candidate some time to prepare;
- Everything is done digitally, which avoids the need for several trips.
4. What are the disadvantages of this platform for the buyer?
The disadvantages of Biddit are:
- The necessary funds must be raised as quickly as possible;
- There is not always a suspensive condition for obtaining credit. Without this clause, this means that if the prospective buyer does not obtain a bank loan, this is not a valid reason to withdraw the offer;
- The costs are slightly higher than a private sale (this is the classic sale: an agreement between a seller and a buyer established in a compromise, followed by a notarial act to authenticate the sale)
5. How to waive the highest bid?
Waiver of the highest bid will generally only be possible subject to payment of the indemnity set out in the conditions of sale. This may be a lump sum, a percentage of the proposed purchase price or the difference between the proposed purchase price and the second highest bid.
If no sanction mechanism is provided for in the conditions of sale, common law applies, i.e. the bidder may be taken to court, to force him to proceed with the purchase or to ask for the cancellation of the sale with damages up to the amount of the actual loss incurred by the buyer.
The Biddit platform is a new reality, offering many opportunities to realise a sale quickly and to optimise the profitability of a transaction.
A sale via Biddit offers many advantages, especially for the seller. The seller can put a property on the market quickly and on terms that he can unilaterally determine himself. The risks are limited, because the seller can decide for himself what commitments he takes on. Moreover, Biddit guarantees that the planned transaction is legally binding, thanks to the intervention of the appointed notary.
In addition to the many advantages, there are also disadvantages, which are mainly on the buyer's side.
On the one hand, placing an offer via the platform counts as a binding offer, often without any suspensive conditions to obtaining a mortgage.
It is therefore up to the buyer to check his solvency and financial possibilities with a credit institution, at least informally, before making an offer.
It is also absolutely recommended that the buyer carefully checks in advance what penalty he risks if he withdraws from the auction. This penalty is indicated in the conditions of sale. This is particularly important for buyers who are not sure of obtaining financing and therefore do not wish to finalise the sale.
On the other hand, the highest bidder has no guarantee that the property in question will also be sold to him. Indeed, unless otherwise stipulated in the conditions of sale, the seller has the right to decide not to accept the highest bid, thus preventing the sale from being completed.
If you would like more information on this subject, please contact our specialists at Seeds of Law at email@example.com or +32 (0)2 747 40 07.