Buying property in bank auctions often comes with multiple advantages and benefits but a prospective buyer must also factor in all the pros and cons before investing his hard-earned money.
There are many benefits of buying property through bank auctions and some of these are listed below:
1. Buying a bank auctioned property comes with a lower price. It is often lower than the prevailing market rate.
2. Location of these properties is often good which makes them attractive propositions for all.
3. Bank auctioned properties in India are considered safe.
4. No legal issues as these properties are already checked by the banks.
5. Immediate possession/delivery
When it comes to purchase of bank auctioned properties particularly residential properties, the interested bidder shall engage in a legal title search of the property to ensure the validity of key documents such as the original sale deed and non-encumbrance certificate for avoidance of disputes.
Legal checks and funds
One should check account for outstanding municipal tax and society dues as it is likely that the borrower must have defaulted in paying local taxes and society charges as the properties are sold under 'as it is where it is basis'. It is very important to plan the funding of such purchases well in advance, with adequate provision for contingency, since you have to pay the balance amount at a relatively shorter notice.
"It is imperative to inspect the condition of the property as it goes without saying that the bank will not take any responsibility if there are any issues with the property once it is sold. The bank will certainly not provide any money for repairing the property. It is of utmost importance to ask the bank to give an indemnity certificate to protect you from future claims from the owner. Ideally, one should get the owner to become the confirming party to the property transaction," explains Angad Sandhu, Partner - PSL Advocates & Solicitors.
Though auctioned properties are relatively safer than the ones outside. However, as a buyer you must not forget to check the following things:
(a) Title and mortgage documents. None can in law transfer a better title than it has. Thus, if the mortgagor's title and/or mortgage documents are defective the same would not transfer any better title in an auction.
(b) Encumbrances such as litigations, leases, and other charges.
(c) Statutory dues, electricity bills, municipal dues, and other taxes attached with the property.
You need to take a wise decision by checking everything. These days e-auction advertisement portals like eauctionsindia offer good deals on bank auctioned properties. You check properties online and find details that can help you take an informed decision.
Find more information on bank auctions here: https://www.eauctionsindia.com/