Auctions are a great way to make money if you have the time and patience to be a part of the auction process. Not only can you invest in the auction, but you can also make money at the same time. For example, you can buy an auctioned property and develop it.
Here are some tips or processes that might just help you understand how to buy auctioned properties.
Where can I find auction properties?
Auctioned properties can be found on the auctioneers’ website or in the newspaper. Most auctioneer’s websites have a section for properties that are for sale. You can look through the properties and choose the one that you think appeals to you.
Where do I go to auction for properties?
Properties can be auctioned in two ways: physical and online. Physical auctions are usually held at district land offices, high courts or auctioneers' offices(LACA cases). As for online auctions, you require a strong internet connection as the auctions are live.
What should I prepare?
- When you’ve come across a property you're interested in, contact the seller or auctioneer and request a POS(Proclamation Of Sale) and COS(Condition Of Sale).
- Identify the address of the property
- Verify the title number(Whether auction property title is valid or eligible)
- Inspect the property(Does the auction property floor plan match the exact property floor plan)
- If the property has already been issued with title, head to the land office and get a copy of the title.
If the property has not fully received its title, be sure you do some research on the developer’s details to avoid any future complications. You can also seek help from lawyers to find out if the previous owner has any outstanding payments
What are the requirements?
- Be there about an hour before the auction.
- Only those aged 21 and above can attend/take part in auctions.
- Depending on how or where you are auctioning, each has different requirements. Once you’ve gotten the POS and COS of the auctioned property, all the requirements are stated.
- Before auctioning each participant is required to pay up a certain deposit. The requested amount of deposit depends on the location of the auction.
- High court and auction offices – 10% (Some places in West Malaysia request 5%)
- Land offices – 25%
If your bid is unsuccessful, your deposit will be refunded immediately after the auction.
Can I appoint a professional to bid for me?
If someone is representing you, they must have an authorization letter to confirm they’re bidding on your behalf.
What are the benefits?
The benefit of buying auctioned properties is that you can buy at a lower market value than what the market has. If you invest in real estate, you want to have a stable investment that you can predict. Buying auctioned properties is a stable investment because the property is sold at a low market value, and you can predict the price that you will receive for the property.
Once you become the successful bidder, there’s no turning back in a sale. You can sell the property if you wish, but you can’t return it.
If you are thinking about buying a foreclosed property, make sure you know exactly what you are buying and make sure that you are buying it for the right reasons.
The information in this article was excerpted from a talk by Henry Tai of Henry Realty at the Property Hunter Expo 2022.
Watch the full video for more details by clicking the link - https://fb.watch/cUlbl9h6fz/