By Ally Che
Hi, my name is Ally Che, a professional property negotiator. In my second article published in Apartment Penang, I would like to share some of the tips/things to take note when buying in property auction.
Contrary to belief of most people, buy foreclosure property in auction is not taking advantage of previous property owner. Instead we are actually helping them to move on. Let us face it folks, if we do not buy the property, the borrower will still be having the same problem while the bank is also missing out on its money. Everybody loses.
However, once we buy the property, all those problems will go away. The property can be put to more productive uses, the bank get its money back and the borrower can move on with his/her life. Everybody wins.
Also, buying property in auction is not risky as people believe. As we do our detailed homework and intensive research, the risk of buying property in auction is actually very low.
Some tips/ things to take note when buying in property auction:
Locating the property.
The Star normally publishes most of the auction notices on every Wednesday so it will be a good source of information of locating good buy in auction. The notice will state the address of the property, the auction date, time and place of the auction, the name of the borrower, the name of the bank, and the name of the lawyer and also name & contact number of the auctioneer.
Also, a few auctioneers in Penang are already online, displaying all the available properties up for auction on their websites. 2 websites doing this are www.palmahousing.com and www.auctions.com.my.
Check and Inspect.
Once we located an interesting property, we call the auctioneer and get all the details, additional data, information and document from him/her. Then, ask him/her to fax or email to us the Proclamation of Sale. The proclamation of Sale is important because it has complete details of the property, the terms and condition of sale and the time, date and venue of the auction.
Using information stated in Proclamation of Sale, we check the title of the property at the relevant land office. If we find out there is caveat on the title, my advice is to walk away and let it go. The process of lifting the caveat is lengthy and costly. And as long as caveat is on the title, the bank won’t loan you the money to purchase the property.
If the title is clean, the next step is to go and view the actual property. Remember we must go in to check the property. How about the property is empty and locked? Well, use our creativity. After all, we will be spending a lot of money buying the property later on.
After the auction.
If we need to apply loan to settle the outstanding amount, then do it the day we win the auction, remember that we only have 90 or 120 days to settle the outstanding amount, it is not a long time because it includes weekends and public holidays. Also, I strongly suggest applying loan from the auctioning bank because it will save you a lot of paper work.
Apart from that, I also suggest you to get lawyer recommendation from the lawyer who is in charge of the auction. The lawyer represent us must be familiar with auction, and if he/she is friend of the lawyer who is in charge of the auction, it will make the communication easier and faster.
From my observation and personal experience, the only party who is anxious to ensure the whole transaction is completed smoothly and on time is us ourselves only. Therefore we must follow up closely.
Also, we should record down all the expense during buying and repairing the property, so we would be clear about the total investment for the property. Keep the documents and receipts nicely in a file.
Ok, I think that is all for now. Hope we all getting good buy in property auction. See you. Thanks.
Tips for buying in property auction
By Ally Che