1. Self-occupied – To live peacefully and to pass on the property to future generations along with sweet memories.
2. Long term Investment – Buying the properties as a long term investment and getting rental income as pension and to keep the property for future generations.
3. Short term investment – Buying the property and after attending some minor repairs / modifications etc selling for profit.
Buying properties in Bank Auctions is an intelligent financial decision. The following are the seven steps required to buy properties in Bank Auctions / Foreclosures.
1. Read The Auction Notice / Sale Notice Carefully: Advised to take a print out of Auction notice and read the details mentioned in the advertisement carefully and note down the important aspects like contact details, inspection date, reserve price, earnest money deposit ( EMD), cost of auction forms, tender submission time & date, and finally auction date & time. All these are very important aspects for participating in the Auction and to Buy properties successfully.
2. Documents verification:
3. Inspection of the property : Visit the site of the property as per inspection schedule given in Sale notice. Consult people around the property to know the price prevailing in that area. While inspecting the property observe the present physical condition of the property, enquire about the pending property taxes, electricity dues, welfare associations maintenance dues. The property comes as is, as such any pending dues should be added to your consideration price before quoting.
4. Get your finances right:- Please make sure that you are prepared for the price to be paid for the property. If you have ready cash, you can clinch the deal faster and possess the property fast. If you are thinking of availing Bank Loan, you should first approach the bank and get sanction of pre approval loan. SBI (Home Loan PAL - Pre-Approved Limit), HDFC, Axis Bank and Kotak Mahindra Banks are sanctioning the pre-approved loans. This pre-approved loan is to complete the transaction in the specified time frame very smoothly.
5. Submission of tender: Some of the Banks / financial Institutions are selling the Bid forms / tender forms. Buy the tender forms from the specified branches duly mentioning the name of the purchaser clearly. It is important to take into account, pending dues when deciding how much to bid. Submit the bid at the specified branch before the due date and time, along with demand draft / Banker cheque as EMD ( earnest money deposit ), copies of purchasers PAN card, photo identity card and residence proof. In most of the cases the EMD amount is 10 % of the reserve price.
6. Participating in Auction: Based on the data & statistics of the foreclosure properties / bank auction properties in India, around 40 % of the Bank auction properties are unsold, due to various reason. Around 40 % properties are getting one bid only. Around 20 % properties are getting two or more bids. There is an exception to the Bank auction properties in Mumbai, where more number of bids are coming for almost all properties. Arrive early to the venue of the Auction, meet the Authorised officer and get familiarized about the auction process and participate in the Auction. You will be successful if you are the highest bidder. You need to pay another 15% on the same day of the auction.
7. Sale certificate & registration: