Auctioned house is a hot issue and many people who interested are increasing because most of the auctioned house are sold in lower price compared to the market price.
Before you decide to buy an auctioned house, you must know a few main issues regarding to the auctioned house.
The outstanding of utilities and taxes.
- Normally, the bank will pay the outstanding bills auction management fees, taxes and other arrears to the auction house.
- There is a bank or some auctions in which part of arrears payable by the purchasers.
- If you have to pay part of arrears, please check in advance of the current outstanding at the related office.
The reserve price and market value.
- The reserve price is set at the market value and the price will be reduced by 10% for each of the next auction.
- This auction is not necessarily applied to High Court and Land Office.
- Reserve price is set back to the market even though it is not first auction
- The loan will be provided based on the market value and it is not a final price that you buy in the Contract of Sale.
- The deposit that you pay (usually 10%) will be forfeited if you cancel the purchase or missed to settle the payment within the prescribed period (90/120 days) in the Terms of Sale.
- In the purchase of the auction, the time facto is critical but there are factors where beyond their control that allows the bank to authorize the extension of time as necessary to get the permission of the authority parties for specific problems and so on.
- If you are unable to comply with the period, please make an appeal to the bank for an extension, subject to the discretion and the delay factor.
No problem with the loan
- If you plan to get a loan to purchase, make sure you have reviewed the qualification to get loans before entering the auction.
Is there anyone living in the house?
- Please visit and inspected the home before biding.
- If there are signs showing that people are living in the house, try to ask questions and make sure whether they are owners or tenants.
- Also, ask them whether they know the houses will be auctioned and are they ready to move out or vice versa.
- There are some owners who may not cooperate or appear aggressive.
- If so, try to avoid bidding for such property as it may take a long time and the extra cost to get a court order unless it would not be a problem to you.
Purchase of auctioned property is usually synonymous with variety of problems, but if you know the problems might be involved and find out a solution them there is no problem to continue with the purchase. Another thing you should know is whether the developer still exists or bankrupt and whether the property is Bumiputera or Malay Reserves.
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