The State Bank of India and various other financial institutions declare a list of residential and commercial properties for auction every year. These auctioned properties are only a means to realize locked dues and hence, these institutions offers them at a price lower than their market value. Such auctions serve as a good hunting ground for prospective buyers exploring cost-effective real estate deals. This however does not eliminate the need for due diligence. Prospective buyers should always check the property’s actual condition as also any outsanding dues attached to it like unpaid electricity bill and property tax. On the flip side, if the orginal owner disputes the auction in court, the buyer may face inordinate possession delays. Worse, he/she can be dragged to court as the bank is free of any encumbrance whatsoever. After verifying the property’s genuineness, the buyer can seek value-added details on e-auction websites.
As part of formalities, a buyer has to deposit earnest money with the auctioning bank which is generally between 5% and 10% of the reserved price. Supporting documents like Pan card and address proof along with a valid digital signature also need to be furnished to the bank. If the application is approved, the bank provide the buyer with login and password, to be used to bid for the target property on the specified auction date. If the bid is accepted, the buyer needs to deposit 25% of the bid amount on the same day. The balance, adjusted for earnest money, is generally payable within 15-30 days.