A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: Named Pipes Provider, error: 40 - Could not open a connection to SQL Server) Top 10 Best Android Smartphones of 2018, Electronics & Gadgets : Today Indya

Latest News

  • Home
  • Real Estate
  • Things to keep in mind if you are buying an auctioned property
Things to keep in mind if you are buying an auctioned property
Thursday, February 6, 2020 IST
Things to keep in mind if you are buying an auctioned property

A sluggish economy, stagnant salaries and sky-rocketing real estate prices — yet nothing seems to curtail the dream of owning a home. If you are looking to acquire a property, you don’t have to limit yourself traditional channels such as real estate listings and looking for agents. Keeping track of properties on auction is another way to go.

 
 

The benefits of buying at auction include expanding your options and possibly purchasing properties at a discount. You may face less competition when compared with buying the traditional way, but you will also be dealing with a different pool of potential buyers — often, experienced investors. While repossessed properties sold by banks may appear as a sleek deal, they come with their own set of risks.
 
When we talk about buying repossessed properties, we are talking about swimming in murky waters thus making it imperative to make sure the process is clear. Perhaps the biggest risk of buying at auction is that you’ll have limited knowledge of the properties for sale, making an expensive misstep a real possibility.
 
Here are five pointers to keep in mind:
 
1. Outstanding taxes and dues
The most fearful fact about buying auction homes is that banks sell such properties on an ‘as is, where is’ basis. Simply put, the financial establishment will not be liable for any issues related to the said property in the future.
 
In such scenarios, it is likely that the defaulter of a home loan has also defaulted in the payment of local taxes and society charges. Through this auction, the bank will (in most cases) recover all the dues but the new owner will have to deal with other monetary responsibilities like amenities bill, municipal taxes, etc.
 
New owners must ascertain outstanding amounts with respect to municipal taxes and society charges. For under-construction properties, it is advisable to reach out to the builder directly.
 
2. Property’s physical condition
The current owners might cease to properly maintain the property due to financial stress or in view of the fact that they will be dis-entitled from the property. Therefore, it is the new owner’s responsibility to visit the property and check for any physical maladies that might be there.
 
3. Multiple loans
Banks may conduct due diligence in respect to properties but there have been several instances of the owner stealthily mortgaging properties to multiple lenders. It is highly recommended to conduct your own research by communicating with other stakeholders like the municipality, tax authorities and others to obtain crucial information about the land being sold.

 
 

Further, it is advisable to get the ownership title deeds assessed by a lawyer. This may increase your cost a little, but prevention is better than cure.
 
4. Withholding tax
Another important factor to take into consideration is the TDS on purchase consideration. Pursuant to income tax laws, the home buyer has to deduct tax at source at 1% from the purchase consideration, when the property value exceeds ₹50 lakh. In other words, this applies to properties purchased through auction as well.
 
5. Illegal occupants
This is yet another problem that can trail into as an aftermath of the property dealing. As the owner, you have to ensure that the property that you are buying does not have pre-occupied space or occupants living there. Customarily, the eviction of such occupants is the responsibility of banks or the previous owners; however, they will end up being your responsibility if not done so already.
 
History proves that such cases are never easy to resolve and have snowballed into huge legal cases where the new owner might risk violent retaliation from the occupants who are sued for eviction. The only way around this dilemma is to make sure that you do your checks beforehand and take note of the property’s construction quality as well as its age. The issue can be aided by the real estate agents in the area.
 
For instance, Maharashtra RERA boasts of having the most number of real estate projects registered under it across the country. Buyers can find details of a project stuck in a legal row along with the order passed on it.
 
However, despite the availability of such details, it is imperative to hire a real estate lawyer who understands the quintessence of the market and to make sure you understand what your responsibilities and liabilities will be if you’re the winning bidder.

 
 
 
 
 

Related Topics

 
 
 

Trending News & Articles

 Article
Pocophone F1 to be the fastest handset in its class, Snapdragon 845 confirmed

Two days ago Xiaomi teased the arrival of its new

Recently posted . 20K views . 4 min read
 

 Article
The Top 5 Best USB/PD Phone Charger in India 2023

View Top 5 Mobile Chargers in India as on 08 Feb 2023. This rundown is compiled according t...

Recently posted . 6K views . 6 min read
 

 Article
Asus TUF Gaming FX505DY, TUF Gaming FX705DY Laptops Launched in India With AMD CPU and GPU

HIGHLIGHTS   • Both laptops use the AMD Ryzen 5 3350H CPU and Radeon RX 560 GPU • The...

Recently posted . 5K views . 2 min read
 

 Article
India's Top 5 Mobile Charger manufacturer Brand 2019

The following list of India's Top 5 Mobile Charger manufacture Brand 2019  

Recently posted . 4K views . 0 min read
 

 
 

More in Real Estate

 Article
Xiaomi Upgrades New Mi Gaming Laptop With Hexa-Core Intel CPUs

For the past week, Xiaomi had been teasing the release of a new product in partnership with Intel at China Joy and we speculated the company to refresh its first-ev...

Recently posted. 1K views . 1 min read
 

 Article
It's official: the Oppo Find X to be announced on June 19

It has been a wild couple of days. After months and months of hearing virtually nothing on the Oppo Find smartphones, the company suddenly surprised everyone with...

Recently posted. 953 views . 2 min read
 

 Article
Monsoon Discounts on Cars in August 2018: Upto Rs 90,000 off on new Hyundai Elite i20 and Rs 7 lakh on BMW 330i

Car dealers are in fact offering discounts across the spectrum on various cars from hatchbacks to SUVs to keep the buzz going even ahead of the festive discount sea...

Recently posted. 1K views . 1 min read
 

 Reviews
Motorcycle Review: 2018 Suzuki V-Strom 1000



Recently posted . 1K views . 45 min read
 

 Article
Interstellar object Oumuamua may be alien probe

The first interstellar immigrant "Oumuamua" discovered in our solar system may have been an alien probe sent to investigate Earth, as per Harvard scient...

Recently posted. 1K views . 1 min read
 

 Article
Greaves Cotton rolls out electric scooter, priced at Rs 66,950

Launched by Ampere Vehicles under FAME-II scheme, the e-scooter will get a subsidy of Rs 18,000. It has a top speed of 55 kmph and a range of 75 km with charge ti...

Recently posted. 1K views . 1 min read
 

 
 
 

   Prashnavali

  Thought of the Day

"Live in such a way, that if your children are ever asked for the definition of kindness, love, mentor, integrity & loyalty, they answer ”My Parents”.
Anonymous

Be the first one to comment on this story

Close
Post Comment
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST


ads
Back To Top