If If you are troubled by the rising property prices, then you can buy a house at a lower price through bank auction. Buying property through bank auction may seem like a great deal, but it also comes with a lot of risks and challenges. Buyers need to take care that they make the deal while avoiding legal and financial issues. Today we will tell you what problems can arise in properties purchased from bank auction.
Benefits of buying property in auction
The main advantage of buying property in bank auction is that we get a good discount. 10 to 30 percent discount is available on bank auction properties from market rates. The auction process conducted under SARFAESI guidelines is generally transparent. Bidders are usually informed in advance about the terms, conditions and eligibility. After the completion of the auction process, the buyer gets possession sooner than other properties. In bank auctions, properties are usually sold by banks to recover the outstanding amount of the borrowers. When borrowers are unable to repay their loans, the bank seizes the property and auctions it. This happens under a legal process.
Is it safe to buy property in bank auction?
Ambiguity in property title: In some cases the title of the property is not completely clear. For example, if there are legal disputes or ownership issues associated with the property, the new buyer may have to face a long legal battle even after purchasing the property through auction.
Dues and Liabilities: Not all properties sold in bank auctions are free from financial liabilities. Properties often come with outstanding property taxes, maintenance fees or utility bills, which have to be paid by the new owner.
Absence of physical inspection: In some cases buyers are not allowed to physically inspect the property before bidding. This may result in issues related to the condition of the property, hidden damages or illegal occupants that were not disclosed at the time of bidding.
Image Credit: India-Tv.