BOE auction sales in Spain's Canary Islands: the real margin is not 25%

The 25% margin on BOE auctions that doesn't add up

A clean 25% margin. That is the pitch a University of Las Palmas student and data analyst uses to present a software tool that scans the BOE (Spain's official state gazette), the Social Security system and Idealista to filter auctions in the Canary Islands. The figure, however, falls apart as soon as you ask three basic questions: is the starting price the final price, is the listing price the sale price, and is anyone living in the property? The answer to all three is no.

At auction, the price is not fixed. The first thing to point out to the developer is the obvious: anyone can bid five euros higher and walk away with the asset. The margin is not calculated on the minimum bid, but on a simulated award scenario —the author himself mentions 70% of the appraised value— to which prior charges, transfer tax and fixed costs must be added. That is where the cushion starts to shrink.

The Idealista price is not the sale price

The second blow comes on the valuation side. A portal's listing price and the actual closing price do not match: the range discussed puts the transaction price 15% to 20% below the advertised figure. To value objectively you would need sale price series from notaries or the property registry, not a portal's shop window.

The developer's defence is that the engine already applies correction coefficients and cross-checks the data with notarial closing series. That may be true. But it is worth remembering that this adjustment eats up a good part of the margin being trumpeted: if the real market value is 15-20% below Idealista's, the clean 25% turns into far less.

Is the property occupied? The question that decides it all

The third hole is the most expensive one. The BOE does not issue a "yes, people live there": the system scans the full text of the notices and charge certificates looking for occupancy patterns —leases, possession status, whether the debtor is still inside—. When the text drops hints about tenants or that eviction is the winning bidder's responsibility, the alert goes off.

It is a useful filter, not a guarantee. And over the 25% hangs another awkward question: if the property has problems, is that factored in? Because a full renovation wipes out any estimated margin.

From the Canary Islands to Madrid: the pending expansion

For now, the tool only covers the archipelago. There are explicit requests for a version covering Madrid, Castilla-La Mancha and the rest of Spain, and the author acknowledges that the next version will probably extend the BOE and Social Security auction scanning nationwide. Some also point to Ceuta as a market to watch.

The business lurking underneath is another matter: turning the engine into an API query service, with pricing along the lines of one euro per hundred queries. For now, it is just an idea thrown out there.

What the margin does not account for

Automating the screening saves hours, nobody disputes that. Manually calculating dozens of notices, charges and comparables is madness. But an auction margin is not a subtraction: it is a subtraction conditioned by the bidding, by the real closing price, by the state of the property and by whether someone has to be evicted.

The cautious prediction is simple: these tools will multiply and standardise filtering. What they will not standardise is risk. That will keep being priced in, even if the algorithm calls it a clean margin.