When a person buys a property by taking a loan from the bank and is unable to repay it, then the bank confiscates the property and auctions it. Sometimes very good properties are available at very cheap prices in these auctioned properties. If you are also planning to buy such a property, then you must keep some things in mind.
Banks in India have the legal right to confiscate the property if they are unable to repay the loan installments for a long period of time or in case of payment default. Can auction it, so that the outstanding loan can be recovered. For this the SARFAESI Act has been made.
Keep these things in mind before buying a property
If you are going to buy an auction property, you should find the answers to these questions for yourself first.
1. When you buy an auction property, take a good look at its payment plan. How much downpayment you have to make, when and how much you have to pay the rest of the balance. Often banks give complete information about this in the auction notice.
2. You should also take information from the bank that till when the bank will transfer the actual possession of the property to be sold in the auction. Often those properties are sold in auction which are seized by banks under loan default. That's why it is important that by when the banks take the property from the previous owner and transfer it to you.
3. The tentative date given by the Bank for possession of the auctioned property, if the delivery is not received on that day. In that case what are your rights from the bank, will you get refund? Will the loss of interest be compensated? This information should also be gathered before buying.
4. Apart from this, you have to take care of one more thing, whether the owner of the property which is being auctioned has any other dues. Such as electricity or water bill, property tax etc. Only after clearing all these things one should invest in the auctioned house.
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