POSTED BY July 19, 2022 COMMENTS (2)ON
Today I will tell you about foreclosed properties and how you can buy them for lower than the market price.
Many times, banks seize the properties when their owners fail to pay their EMI payments for a long time. These properties are called “foreclosed properties” and banks put them for sale in the auction in order to recover back their dues. Once the properties are seized by banks, they are the rightful owners of the property under the Sarfesi Act and they have 100% legal rights to sell off these properties.
These properties are mainly sold below the market price because the focus on banks is mostly to recover bank their dues and not to make profits. So you can strike a very good deal if you are ready to go through the process of buying foreclosed properties.
The data and information about foreclosed properties are quite fragmented. There is no single central database of information but divided a lot. Here are some ways you can find information about foreclosed properties
Next step after shortlisting the foreclosed property?
Once you get the preliminary information about an auction, you can visit the property along with the foreclosing bank’s official.
All exact information about the property is given on the website such as the name of the borrower of the property, the property belongs to which state and city, what is the reserve price of the property, exact time and date of the auction of the property and so on
To participate in the auction, you will need to submit an application and KYC (know your customer) documents, along with the bid value which can range from 5-20% of the reserve price, to the bank.
Then on the main bidding day, whoever is the highest bidder wins and they have to then pay the rest of the money to secure the property. There may be some advance to be made and the remaining money has to be paid in a few weeks. So you can go with a home loan if required, but remember that you will need to have a decent amount in your hand to participate in the auction anyways.
Remember that the foreclosed property is coming into your hands from another owner who was financially distressed, and there is a good chance that there might be some
Banks are not going to recover these and these are your headache, but even after paying these, you may be getting a great deal.
Is it worth buying a bank auctioned property?
Below is a short video that answers your question.
This was all that I wanted to share in this article. If you have any queries post them in the comment section.
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2 replies on this article “How to buy cheaper property in online auctions in India?”
Our Co operative housing society has a property where 2 floors of a sanctioned plan of 18 floors are constructed since past 6 years. There is mortgage of about 14 crores by DHFL. But now because of Unified Development Regulation and property being adjacent to 80 feet wide service road, there is additional FSI. It is in prime area with connectivity to suburban train, BEST, High way. We wish auction the entire unfinished project and come out. Which organization can help us to auction the unfinished project lok, stock and barrel
I am not aware of this . some one from real estate would be better person to connect.