Online property auctions by banks :Advantage, disadvantage

In India online world is a very fast improvement. Discounts and deals available for a wide range of products. The latest addition being real estate auctions by banks and housing finance companies, at a rate cheaper than the market.

When borrowers fail to repay loans, banks auction the property to recover dues. These auctions take place under the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest ) Act.

Banks and housing finance companies have tied up with online real estate sites such as indiaproperties.com and Arms, the retail debt recovery arm of asset reconstruction company Arcil.

Last one year Banks and housing finance companies, both have collectively auctioned nearly 1,500 properties across India.The majority of real estate auctions being residential.

The initial part of the process is similar to offline auctions. About 30 days prior to the date of the auction, advertisements are published in one English and one regional daily paper.

To participate, interested parties must give their bids in a sealed envelope to the auctioneer, along with a certain percentage of reserve price as earnest money deposit. The amount is refundable if one withdraws from the process or does not win the bid.

Advantage, disadvantage of Online auctions

For online auctions, they must also give a separate bid form, requesting a log-in address and password.

These are different from an offline auction in the way they are conducted. On the given date, at a pre-specified time, bidders must log in to the website with the address and password issued to them. The bidding takes place live. All participants can view the bids placed by others and accordingly, revise their own.

on due to internet connectivity at your end.

The advantage of an online auction is transparency. Buyers know the number of participants and can see all the bids.

Also should take care of the possibility of dummy bids being placed to raise the price of the property.

Besides, with participants being spread out geographically, chances of them colluding to swing the outcome their way and put any single participant at a disadvantage are lower.

Now a days most people llike auctioned properties. Because auctioned properties are 1-20 % cheaper than the market prices. And, that is the maximum discount you can expect, irrespective of the platform — online or offline.

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