According to RBI’s guidelines if the borrower defaults on paying the EMIs consecutively till 6 months, then the bank is authorized to take actions. This legal action starts from sending the warning letters to the borrower and ends with auction of mortgaged property.
Buying property in bank auction can really be a good opportunity for a potential buyer.
Though, buying a property in the bank auction is a wise decision but there are points you must keep in mind before buying a property in Bank Auction.
- Do not take things for granted. Before investing in the property available in the Bank auction you must check the property by yourself. Visit the site and the property and only if you get satisfied, close the deal.
- Before the bidding starts refer to the sale deed of the property. Through this process you can ensure that the title of the property is clear.
- Check for the municipal bills/taxes. All of them must be paid; if not then at the time of property transfer you would be liable to pay all the unpaid bills.
- The buyer has to pay 25% of the bid amount to the bank within a day. So, you must be prepared with the finances as no bank gives you loan on the distressed property.
- Go for an expert advice before buying such a property. There is much legality involved and thus before buying a property in the bank auction, it is better to take an expert advice.
Keep checking newspapers for such auctions but stay alert.
Happy Investing!
-Saumya Chaturvedi
Why choose second hand property to live??? I am not in the favor of buying property in auction because for me its more easy to buy a new one and we aware for the new one and satisfied with the fact that no damaged would be there. In India, many more developers are still working to provide affordable housing in Gurgaon and most famous other cities of India.
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