Buying a House at Auction: A Complete Guidance!

Sujan Afi S

Introduction

“I will be joining you in a couple of minutes.” 

You say this and try to spare some ‘me time’ and sit in front of your laptop with a cup of ‘adrak wali chai’. You run your fingertips through the keyboard of your laptop, typing ‘simple house designs. Google takes less than a second to display the search results! And…you smile to yourself, seeing the beautiful images of small houses. You scroll down and find beauty in every image. 

“Each one of them is unique! My house will be somewhat like this one…” 

You put down the screen and take a deep breath, feeling a sense of satisfaction that mere words can’t explain. 

Hey! How many more days are you going to live in your dream world? It’s high time to materialise your dream now! Yes, the decision of buying a house is a big one. It requires proper planning and fund. But it’s not too difficult. You can buy your dream house at auction too! Let’s find out more about it!

What is an Auction?

A bartering is typically a course of trading products/things/tangible objects/services by offering them up for bids, taking bids, and afterwards offering the thing to the most noteworthy bidder or purchasing the thing from the least bidder.

Suppose a person named XYZ has taken a loan from the bank to build his/her house. Now, he/she has failed to pay the mortgage for a few months. On such an occasion, the bank/trustees/lender of money may seize the property from XYZ and put it up for auction, thus, selling the property to the highest bidder. 

Further, if XYZ fails to pay the taxes on time, the tax authority might seize the property from him/her. The property will ultimately be put up for auction and sold to the most eligible bidder. 

Generally, a house at auction can’t be visited by you (or any other bidder) legally. Thus, you remain almost unaware of the internal design of the concerned property. It might be in a good state or a bad state too. You need to take the risk!  

The Road of Reaching out to the Property at Auction!

Once you have decided to buy a property at auction, you can consult a real estate agent or visit sites like RealtyTrac.com, Auction.com, etc. Some banks post auction notices. You might also find news related to it in newspapers. After you decide to bid for a particular property, follow the steps given below:

  • Submit the tender as well as the bid form: You need to submit the tender and the bid form. A bid form is a typical form where you suggest the price that you want to pay for the property. The price can be anything. One thing to note here is that you lose the bid once a bidder suggests an amount more than that suggested by you. 
  • The Auction: Once the ultimate bidder is selected, he/she needs to submit 25 % of the amount suggested by him/her (along with the EDM) within 24 hours, the failure of which allows the next prospective bidder.
  • Obtaining the Sale Certificate: Supposing that you are the winner/buyer of the property, the bank provides you with a Sale Certificate when you pay the total amount suggested by you in the bid form.
  • Registration: Once you obtain the Sale Certificate, you need to register it at the sub-registrar’s office. Then the process of buying the property completes.

What are the Advantages of Buying a Property at Auction?

  • The entire process is less time-consuming.
  • There are chances that you get a good property at a less amount of money.
  • The process is a legal one.

Am I doing a mistake by Buying a Property at Auction?

  • There is a chance that you might get hold of a bad property as you can’t inspect the property before buying it.
  • It is quite difficult to step out of the deal once selected as a prospective bidder.
  • The entire amount needs to be paid in a very less time (usually 1 month).

Conclusion

I hope that I have been able to give you an idea of how you can buy a property under auction. You will have a risk if you buy your dream house via this process. Nevertheless, keeping in mind the advantages and the disadvantages that you have while buying a property under auction, you can take your own decision. However, it will be always good to contact a real estate expert to understand the matter clearly. You can contact the experts of Roodland India for our experts to provide you with the best advice that you would never regret following! So, without any further hesitation, drop a mail at info@roodland.com.

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