The difference between a voluntary and a forced public sale lies mainly in the circumstances and reasons why the sale takes place. In this article, you will find out how the two differ and discover the advantages and disadvantages of both.
Voluntary public sale
A voluntary public sale is initiated by the owner of the property. This means that the seller himself has decided to sell his property by auction.
There are several reasons to choose a public sale. For one, you have a quick and transparent sale. In addition, you have a chance of getting a better market price because several potential buyers are bidding against each other. Moreover, the seller has control over the process and can determine the terms of the sale, such as the auction date, in consultation with the notary. Finally, there is more flexibility in the preparation and execution of the sale, such as scheduling viewing days and determining the sales strategy.
Forced public sale
A forced public sale is initiated by a creditor, usually a bank or other lender. This happens when the owner cannot pay off his mortgage or other debts.
The main reason for a forced public sale is to settle the owner’s debts. The goal is to use the proceeds of the sale to pay off outstanding debts.
Unlike a voluntary public sale, the owner has little to no control over the process. The sale terms, starting price and auction date are determined by the creditor and the notary.
In addition, there is often a greater urgency to sell the home to settle debts as quickly as possible. This can result in a lower sales price because the main goal is to generate cash quickly.
Agreements
Despite the differences, there are also similarities between voluntary and forced public sales:
- Transparency: both forms of sale are public and transparent, meaning everyone can see how the bids are going.
- Process: the process of the auction, led by a notary, is similar in both cases. This includes gathering the necessary documents, organizing viewing days, and holding the auction itself.
Pros and cons
Voluntary public sale
Advantages:
- The seller has control over the process.
- Potentially higher sales price due to bidding.
- Quick sale possible.
Disadvantages:
- Costs to the seller, such as notary fees.
- Uncertainty about the final sales price.
Forced public sale
Advantages:
- Prompt settlement of debts.
- Transparent process, leaving little room for fraud.
Disadvantages:
- The seller has no control over the process.
- Often lower selling price because the primary goal is to generate money quickly.
- Stressful situation for the owner because of the financial problems that led to the sale.
Both types of public sales have their own dynamics and require good preparation and understanding of the process to get the best results.
Are you curious about the process of a public sale? Find out in this article.
Would you like to cite this article as a source? Then use:
Luyckx, S. (2024, Aug. 14). Voluntary vs. forced public sale. Apartment.be. Accessed on (date XX/XX/202X), from https://www.appartement.be /voluntary-vs-forced-public-sale
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