Pay a LOT Less for Property at the Uruguay Auction
Date: 12/06/2007
Friday, Dec. 7, 2007
Montevideo, Uruguay
Read more about Uruguay in International Living Postcards--your daily escape
There were about 10 of us assembled on folding chairs in the small second-floor gallery above Peatonal Sarandí, the pedestrian walkway that runs through Montevideo’s colonial historic center. A few people were laughing and joking as they waited--obvious regulars at the auction.
Finally, the bidding began. ¿ Escucho quince mil? ¿ Diez mil? ¿ Cinco? The auctioneer had already dropped down to $5,000 for a sixth-floor, three-bedroom, 1,109-square-foot apartment in Montevideo’s Centro district. All around, my fellow attendees were yawning, reading the paper, and generally acting uninterested. Fantasizing that I was actually going to get this apartment for $5,000, I was preparing to raise my hand when I heard “ cinco” from a guy in the back of the room. OK…maybe I’ll get it for $10,000…
Every Sunday in the Montevideo paper, there’s a page or two dedicated to auctions of various properties located all over the country, including apartments, houses, and even large tracts of land. They are being auctioned for a variety of reasons, among them mortgage foreclosures, back taxes, and other debts. Although the properties could be anywhere in Uruguay, the majority seem to be located in either Montevideo or Punta del Este.
Typically--but not always--there’s a period of public inspection prior to the auction so you can see what you’ll be bidding on. If the property is occupied, these inspections will often take place on a specified day, while vacant properties can sometimes be seen on a “drop-in” basis. If no inspection is permitted, the properties will go for a lower price, but you’re really “flying blind.” What I’ve done in this case is ask the doorman, neighbors, etc., what they know about the property. While not as good as an inspection, it’s better than nothing if the price is right.
The auction ( remate in Spanish) will be announced no more than two to three weeks in advance…sometimes less. During this time, participants need to schedule their site visits and investigate the title to see if there are any additional liens. Normally, the debt that caused the property to be auctioned will be paid by the proceeds, but properties can have other debts--things like condo fees--that the successful bidder is responsible for. In Uruguay, the auctioneers give you a written summary of these costs. The majority of the properties to be auctioned have no minimum price, but if there is a “floor” price, it will be mentioned in the announcement. Some properties even offer financing. Most often, the auctioneer will have a website with photos and a description of the property so you can do some preliminary screening.
“Treinta mil,” said the young man sitting next to me, finally upping the ante to $30,000. I dropped out, not willing to go over $25,000 for this one because I hadn’t seen it on the inside. A few more bids straggled in, but the guy next to me finally got it for $34,000…a future home for him and his young family. In that particular neighborhood, the market value of such a property in average condition would be about $62,000, so he got quite a deal.
In the next auction, an apartment in my own building went for $63,000. Located on the 10th floor overlooking a beautiful park, the apartment would sell for about $69,000, plus another $4,000 for the parking space that went with it. While not quite as dramatic a discount as the first property, it’s still $10,000 less than you’d usually pay.
If you’ve been waiting for a good buy in Uruguay--and you’ve got the patience to play the game--the auction block may be your means to a happy ending. Each Sunday when the paper arrives, the auctions are the first thing we look at.
Lee Harrison
Roving Latin America Editor, International Living
P.S. If you’re looking at the auction announcements, you’ll often see the term martillero, which is “auctioneer” in Spanish, a name that comes from the hammer ( martillo) he typically wields.
Editor’s note:Why does Lee love Uruguay so much?
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There's Still Time to Get in on Uruguay's Upswing
Let the Bidding Begin--Uruguay's Best-kept Real Estate Secret Revealed
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