To Do List Prior To Bidding At A Property Auction
If you were to scan the daily newspapers or some special publications or even brochures available at financial institutions, chances are there are some advertisements for properties which are going on auction. Almost always, these properties are on auction due to the borrower’s failure to maintain their loan account in good order. Some of these properties can be a good bargain based on the reserve (minimum) prices stipulated. However, prospective bidders should always do a few things prior to bidding at an auction for these properties as there are inherent risks which you ought to know about.
Do inspect the subject property. Well, it goes without saying that if you intend to buy something, know what you are buying. A photograph on a nice glossy brochure is not a reliable indicator of the property you intend to buy. Visit the property and carry out a physical inspection if at all possible. Most, if not all, of these auction sales come with an “as is where is” clause which means that you buy the property as it is – in whatever condition they come in. If the property is badly maintained, an inspection prior to the bidding process would allow you to factor in potential renovation costs after successfully bidding for the property.
Obtain a copy of the Condition of Sale and seek independent legal advice on the Conditions of Sale. The old saying of “Caveat Emptor” or “Buyer’s Beware” cannot be overemphasised. The Condition of Sale would contain the salient terms and conditions pertaining to the sale, including reserve price, method of payment and time period for payment of balance purchase price. You need to know all these details so that you know what you are getting yourself into.
Conduct official title search at the relevant Land Office. The last thing you want is to purchase a property which comes with an encumbrance. The most reliable way of ascertaining the legal status of the property is to conduct an official title search at the relevant Land Office which you can do yourself or engage a law firm or property consultant to do it for you. Find out whether the property is freehold or leasehold and whether the property is subject to consent from the relevant authorities in case you wish to dispose off the property in the future.
The above are 3 important “to-do-list” in case you are interested in bidding for a property at an auction. It is by no means exhaustive but they are essential.
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6 Responses to “To Do List Prior To Bidding At A Property Auction”
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Congrats on your new blog! I’ve always wondered about this. Not saying I could afford to do it….
Adino : You really need to do some “homework and groundwork” before attempting a purchase through auction.
Can you also share after doing these 3 checks..on the auction day how do you make payment for the winning bid since you won’t know the bid price…
leona : Erm…you will first have to register to take part in the auction for the property. Registration is by way of placing a deposit – usually by banker’s cheque. That will give you the right to bid at the auction. If your bid is successful at the auction day, you will need to pay what you bidded for
Can you share how if the house’s owner stop paying the installement, when will the bank will take over the hse & go for auction and when the owner will be declare bankrupcy. Kindly give step by step…eeer sorry if ask to much..so that we have more clearer info of that.. Thank you
Elaine : I will write a post on that. Thanks for asking.