Minimum bid increment: how much and when you bid
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What the minimum bid increment is, in simple termsHow it works step by stepWhen to bid and when not toWhat to check in the noticeWhen there is no bid incrementThe most common mistakesIn practiceFrequently asked questionsSourcesThe minimum bid increment (rilancio minimo) is the lowest amount by which you can raise your offer during the auction. It is set by the sale notice, not by you. Example: if the minimum bid increment is €1,000 and the highest offer is €80,000, the next bid must bring it to at least €81,000.
What the minimum bid increment is, in simple terms
When more valid offers arrive at the auction, the judge or the sale delegate (delegato alla vendita) organises a competitive round between the bidders. The round starts from the highest offer received, as set out in article 573 of the Code of Civil Procedure.
Each participant can bid again, that is, propose a price higher than the current one. The minimum bid increment is the minimum increase that each new bid must have. Its value is the one written in the notice.
The minimum bid increment should not be confused with the base price (prezzo base) or the minimum offer (offerta minima). The base price is the starting point set by the judge, while the minimum offer is the lowest price with which you can take part. If you want to understand the difference, read the explanation with an example.
How it works step by step
The auction works as follows:
- Before the auction, read in the notice the amount of the minimum bid increment and the day and time of the auction.
- During the auction, you see the highest offer submitted so far.
- If you want to stay in the race, you bid at least the minimum amount.
- When nobody bids any more, the highest offer wins.
The method changes the practical rules. In a synchronous auction, everyone bids on the same fixed day and at the same fixed time. In an asynchronous auction, bids are made within a window of several days. To understand better, read how the synchronous auction works and how the asynchronous auction works.
Here is an invented case to understand the numbers. Suppose the base price is €100,000. The minimum offer, according to the notice, is €75,000.
- You offer €78,000 and pay a deposit (cauzione) of 10%, that is, €7,800.
- Another person offers €80,000, with a deposit of €8,000.
- The auction starts from €80,000, because it is the highest offer.
- You bid €1,000 more, so you reach €81,000.
- If the other person does not bid again, you win at €81,000.
In this case you have not paid the minimum bid increment twice. The increment is the rise you propose in order to overtake the highest offer. The final price is that of the last accepted bid.
When to bid and when not to
You bid only during the auction. Before the auction there is no bid: there are only the offers submitted within the deadlines. After the auction closes, you can no longer bid.
You can always bid more than the minimum, but not less. If the notice sets €1,000, a bid of €500 is not valid.
Before entering the auction, fix the maximum price you are willing to pay. Write it down. During the auction it is easy to get carried away and bid beyond the limit you had set for yourself.
What to check in the notice
In the sale notice, look for this information:
- The amount of the minimum bid increment.
- The format of the auction: synchronous, asynchronous or mixed.
- The day and start time and, if it is asynchronous, the length of the window.
- Whether the auction is automatically extended when a bid arrives in the last minutes. The number of minutes is not fixed: check it in the notice.
- The rules in case of a tie, which are indicated in the notice.
In case of a tie, the law sets a precise order. The winner is the one who paid the higher deposit. If this is also the same, the shorter payment deadline counts. The exact order is the one written in the notice.
The deposit (cauzione) is the sum you pay before the auction as a guarantee. The law requires at least 10% of the offer, but the notice may ask for a higher percentage. To understand how it is calculated and when it is returned, read the guide to the deposit.
When there is no bid increment
The minimum bid increment only makes sense if there are several valid offers. In other cases, no auction takes place.
If a single offer equal to or higher than the base price arrives, the judge accepts it. If it is lower than the base price but not below three quarters of it, the judge may award the property. This is not guaranteed, so do not take it for granted that you will win.
If the auction is an auction with no bids (asta deserta), that is, nobody makes an offer, the judge sets a new attempt at a lower price. The new price is always written in the notice. For the figures, read how much the price drops in the next round.
In sales without auction (vendite senza incanto), which are almost all auctions today, there is no increase of one fifth after the award. For this reason the award is final immediately. If you want to know why, read whether the sale with auction (incanto) still exists.
The most common mistakes
- Not checking the minimum bid increment. The value is the one written in the notice.
- Confusing the minimum bid increment with the minimum offer. They are two different things, with two different functions.
- Forgetting the deposit. Without a deposit you cannot take part.
- Bidding after the auction has closed, when the bid no longer counts.
- Not checking the rules in case of a tie, which can decide the win.
In practice
- Look in the notice for the line «rilancio minimo» and note the amount.
- Fix your maximum price before the auction and write it down.
- Check whether the auction is synchronous or asynchronous and note the day and time.
- Check in the notice whether the auction is automatically extended and by how many minutes.
Frequently asked questions
Can I bid less than the minimum bid increment?
No. The minimum bid increment is the threshold below which a bid is not valid. You can always offer more, but not less.
Can the minimum bid increment change during the auction?
The value is the one written in the notice. If the sale delegate publishes a change, that applies. Before the auction, check again on the Public Sales Portal (Portale delle Vendite Pubbliche, PVP).
If I win the auction and do not pay, what happens?
If you do not pay the balance within the deadline, you lose the award and forfeit the deposit, as provided by article 587 of the Code of Civil Procedure. For this reason, assess your chances carefully before bidding.
Sources
In the same chapter
- Auction with no bids (asta deserta): how much the price drops at the next roundAuction with no bids (asta deserta): the price can fall by up to a quarter at the next attempt, and by up to half after the fourth. Example with numbers and what to check.
- Base price (prezzo base) and minimum offer (offerta minima): the difference explained with an exampleThe base price (prezzo base) is the starting point of the auction, the minimum offer (offerta minima) is the threshold below which you cannot bid. Here is the difference with an example using round numbers.
- Sale without judicial auction, synchronous, asynchronous and mixed: what it meansSynchronous: online bidding at a fixed time. Asynchronous: online bidding over several days. Mixed: online or in the room, together. The sale notice says which one applies.
General information, not legal or tax advice: the law and the notice of sale prevail.
