Buying a piece of property in a bank auction can be a good way to purchase real estate at a lower price, but it is important to be cautious and conduct thorough due diligence before making a bid.
Buying a piece of property in a bank auction can be a great opportunity, but it is essential to conduct due diligence. Physical inspection of the property, checking ownership and title details, liabilities and dues, auction rules and guidelines, as well as financing options are all critical steps to take before buying any property in a bank auction.
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Here we take a look at some of them:
Identify the banks: You must start by identifying the banks that conduct property auctions. Some of the major banks that conduct auctions in India include State Bank of India (SBI), Bank of Baroda, Punjab National Bank (PNB), Canara Bank, among others.
Check the bank’s website: Once you have identified the bank, check their website for details about upcoming auctions. Most banks have a separate section on their website dedicated to auction property.
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Visit online auction platforms: There are several online platforms such as BankAuctions.in, eAuctionsIndia.com, etc., which offer information about bank auction property in India. These platforms list property from various banks and provide detailed information about the property, including their location, reserve price, auction date, and more.
Check newspapers: Banks often advertise their auction property in leading newspapers in the classifieds section.
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Contact the bank: If you are unable to find information about auction property on the bank’s website or other platforms, you can contact the bank directly and inquire about the upcoming auctions. They may provide you with the necessary information.
Adhil Shetty, CEO, Bankbazaar.com, says, “Buyers can purchase the property at a lower price than its market value. This is because the property sold in auctions is usually distressed or foreclosed property. Additionally, auctions provide transparency in the purchasing process, as all interested buyers can see the bids being made and the final sale price. Purchasing a property in an auction can be a faster process than traditional real estate transactions, as the sale is typically completed within a few weeks of the auction.”
Buying a piece of property in a bank auction can be a good way to purchase real estate at a lower price, but it is important to be cautious and conduct thorough due diligence before making a bid.
“The buyer should verify the property and ensure that everything is in order. This level of due diligence should never be compromised,” adds Shetty.
Here are five things you must check before buying a property in a bank auction:
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Title and ownership: Check the property’s ownership and title documents to ensure that the seller has the legal right to sell the property and that there are no outstanding disputes or encumbrances.
Physical inspection: Inspect the property in person to ensure that it is in good condition and does not have any structural or other issues that could be costly to repair.
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Liabilities and dues: Check whether the property has any outstanding dues or liabilities, such as property taxes, utility bills, or pending loans. You do not want to be surprised with additional expenses after purchasing the property.
Rules and guidelines: Familiarise yourself with the auction rules and guidelines, including the bidding process, payment terms, and other relevant details. This will help you avoid any confusion or misunderstandings during the auction process.
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Financing: Determine the financing options available to you before the auction. If you plan to take a loan, make sure that you have the necessary documentation and pre-approval from the bank. Knowing your financing options beforehand will help you determine your bidding limit and avoid overbidding.
Lastly, it is essential to conduct thorough due diligence before bidding on any auction property. Make sure to visit the property, check its legal status, and assess its market value before making any decision.
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DUE DILIGENCE
- Check the property’s ownership and title documents to ensure that the seller has the legal right to sell the property
- Make sure there are no outstanding dues or liabilities such as property taxes, utility bills or pending loans
- Find out the auction rules and guidelines, including the bidding process, payment terms, and other relevant details
