Benefits and risks of buying a house from bank auction, know what precautions to take

If you are troubled by rising property prices and want to buy a house at an affordable rate, then bank auction can be a great option for you. You can get a house at a price below market value through a bank auction. However, this process also involves many risks and challenges. Without the right information and caution, you may get into legal and financial troubles. Today we will tell you what are the benefits and risks of buying a house from a bank auction.

Benefits of buying property through bank auction

1. Property at low price:
   In bank auctions, property prices are 10 to 30 percent lower than market rates. This is a good opportunity for those buyers who want to buy a house in a budget.
2. Transparent Process:
   The auction process is done under SARFAESI Act, which maintains transparency. Bidders are informed in advance about the terms, conditions and eligibility.
3. Chances of getting quick possession:
   After the completion of the auction process, possession of the auctioned property is quicker than other properties.
4. legal process:
   Properties auctioned by banks are a legal process in which assets are seized to recover outstanding loans.

Is it safe to buy property in bank auction?

There are many benefits to buying a home through a bank auction, but it also comes with some risks and challenges that need to be kept in mind.

1. Ambiguity in property title

Problem:

In some cases there are disputes related to the ownership (title) of the property.

• If the ownership of the property is disputed or there is a legal case pending over it, the new buyer may have to face a long legal battle even after the auction.

Solution:

• Check the ownership documents of the property thoroughly before participating in the auction.
• Consult with a legal advisor to ensure that the title of the property is completely clear.

2. Dues and other liabilities

Problem:

Properties sold at auction may often have outstanding property taxes, electricity bills, water bills or maintenance charges.

• These liabilities have to be paid by the new owner.

Solution:

• Be aware of all liens attached to the property before participating in the auction.
• Get written confirmation from the bank that there is no outstanding balance on the property.

3. Delay in possession

Problem:

Many times the former owner refuses to vacate the property.

• In this situation, even if you have legal ownership, it may take time and legal proceedings to get possession.

Solution:

• Before the auction, ensure from the bank that the property is vacant or can be vacated soon.
• Be prepared for legal help in case of delay in getting possession.

4. Inability to conduct physical inspection

Problem:

Some auctions do not allow buyers to physically inspect the property.

• Due to this, information about the actual condition of the property, any kind of damage or illegal occupation is not available.

Solution:

• If possible, do a physical inspection of the property.
• If inspection is not allowed, get information about the property from people nearby.

Precautions to be successful in bank auction

1. Seek help from a legal expert:
   Get the documents checked by a lawyer or legal advisor.
2. Understand the auction terms and conditions:
   Bid only after understanding the complete process and conditions of the auction.
3. Evaluate the market value of the property:
   Know the market value of the property before bidding in the auction.
4. Get complete information from the bank:
   Get information about the ownership, outstanding and possession status of the property from the bank.