8. - How is the Auction Process carried out?

8.1. - Previous considerations:

The auction is headed by the Director of the Auction assisted by a Secretary.
The Director manages the act and has all the power, authority and expertise to solve any situation that may arise during its celebration.
The Secretary is responsible for drawing up a private document in the shape of an Act, which will then be brought before a Notary in order to reach the rank of public document.

Before starting the auction, the Director explains its basic criteria of development, which can be summarized as follows:

a) Acceptance of a bid:
A bid can be accepted by BUs once the Director of the Auction announces it aloud and it appears on the screen.
A bid is accepted by a BU when it lifts the plastic support delivered at the entrance and clearly shows the number on it, indicating that it is interested in the price.
The maximum time given to accept a concrete bid by those BUs attending the auction is decided by the Director of the Auction and is approximately 60 seconds after he announces it aloud.
An acceptance has no validity until the Director of the Auction confirms it.

 

b) Confirmation of a bid:
A bid is officially confirmed by the Director of the Auction when the followings three actions take place:
b.1) The Director confirms the acceptance of the BU, expressing aloud the bid and its identification number to all the BUs, for example “300,000 euros for number 4!”
b.2) The organization introduces this confirmation into the computer.
b.3) The screen reflects this information in order that all BUs can see it.
If any of these three actions does not happen, the acceptance is not confirmed and it has no validity.

c) Auction management:
The Director of the Auction manages the act with the help of a computer, which records each of the accepted bids by the BUs and is confirmed by the Director of the Auction, plus a screen, that displays this information so that everybody can follow the progress of the event looking at the same information.

d) Distance between bids:
The distance between each bid is fix and its amount is equivalent to 1% of the opening bid.
Example: For a house whose opening bid is 300,000 euros, the fixed amounts between bids will always be 3,000 euros.

e) Act of the auction:
Once the Deposit Agreement has been signed and the reserve winning bids defined, the Secretary of the auction makes an Act of the event in order to bring it before a Notary to become a public document.

 

 

8.2. - Bids Acceptance Subprocess:

a) Start of the auction:
The BUs Bids Acceptance Subprocess begins when the Director of the Auction announces aloud the opening bid and it appears on the screen.

b) The first 60 seconds:
At this moment all the BUs can accept this first bid by lifting their corresponding plastic support over a time period of approximately 60 seconds. The Director of the Auction decides when this period ends, as it may be that due to a large number of BUs lifting their supports, this period has to be lengthened.

c) What happens if after these first 60 seconds nobody accepts the opening bid?
If nobody accepts the bid, that is, if no BU has lifted the plastic support, the Auction Process concludes and the property is not allocated to anyone, since no BU has accepted the opening bid.

 

d) What happens if after these first 60 seconds only one BU accepts the opening bid?
Firstly the Director of the Auction confirms it, expressing it aloud together with the identifying number of the BU that has accepted, recording it into the computer and showing it through the screen to all the BUs in order that all of them are aware of the fact.
Due to the fact that after these 60 seconds there has not been any other acceptance, the Director of the Auction concludes the Bids Acceptance Subprocess and announces aloud the winning BU, which is the one that has accepted the only confirmed bid.

e) What happens if after these first 60 seconds several BUs accept the opening bid?
Firstly the Director of the Auction confirms each of the different acceptances by the procedure described above (expressing each one aloud together with the identifying number of the BU that has accepted, recording it into the computer and showing it through the screen to all the BUs so that they are all aware of the fact).
Then the Director of the Auction announces the new bid upwards, which is 1% of the opening bid higher than the previous one, and starts the new bid acceptance process again. At this point one of three situations can occur:

 

e.1) There is no acceptance of the new bid:
In this case a public draw is done in which a winning number is chosen from among all the BU numbers whose acceptances have been confirmed in the previous bid.

e.2) There is only a single acceptance of the new bid:
Firstly the Director of the Auction confirms it, expressing that aloud together with the identifying number of the BU that has accepted, recording it into the computer and showing it through the screen to all the BUs so that they are all aware of the fact.
Due to the fact that after these 60 seconds there has not been any other acceptance, the Director of the Auction concludes the Bids Acceptance Subprocess and announces aloud the winning BU, which is the one that has accepted the only confirmed bid.

e.3) There are several acceptances of the new bid:
In this case all the points already exposed in point e) will apply again. This process is repeated until there is a Bids Acceptance Subprocess winning BU.

 

 

8.3. - Deposit Agreement Signature Subprocess:

Once there is winning BU in the Bids Acceptance Subprocess, the Director asks the spokesperson of this BU to identify himself in order to sign the Deposit Agreement. The spokesperson should confirm at this point the names of the persons of the BU that have to appear in the Deposit Agreement, because if nothing is modified, by default the computer leaves and prints the names of all its members.
When this document is signed by the BU members defined by the spokesperson, he has to deliver a second cheque for a value of 10% of the opening bid, which together with the one handed in upon entering the auction for 5% of the opening bid, constitutes the token payment of 15%.

 

 

8.4. - Reserve Winning Bids Definition Subprocess:

Once the Deposit Agreement is signed, the 10 winning bids will be publicly defined, indicating their order of preference, which remain in reserve in case the BU that has signed the Deposit Agreement does not sign the Public Registration of Sale within the stipulated time.
The order of preference is defined on the basis of these criteria:
1. - The highest bid confirmed in the system.
2. - The order resulting from a public draw when there is more than one confirmed acceptance in the same bid.

It is not possible for a BU to have more than one reserve winning bid assigned, since the highest bid is the only one in reserve.

 

It is important that no-one leaves the Auction Process before the definition of these reserve winning bids, since any of them could have a real option of purchase if the winner of the Bids Acceptance Subprocess signs the Deposit Agreement but does not finally sign the Public Registration of Sale.

 

To explain the Sistema Torrent, Explanatory Presentations are held periodically and before the auction in the property to be auctioned, which presents an opportunity to visit it. Dates and timetable can be consulted in "Explanatory Presentations".

If requested and without any commitment on your part, we also offer the possibility to make Explanatory Presentations where and when they are required.