Many of us may have our reservations about buying property at auction. This may stem from our own beliefs, and as emotional judgment is involved; we might have overlooked the significant benefits of buying auctioned properties. Or we may not have realised the significant benefits. In the Klang Valley alone, it is estimated there are over a 1,000 newly listed properties which go under the hammer each month.
The most apparent benefit of buying property at auction is that it could be had for much lower than a comparative property listed on the sub-sale market. Savings here could be realised, thus this option of buying property could be intelligently considered by the savvy investor. Savings to be had has been seen to reach as much as 50% of a bank’s market value of a property at auction!
Be confident with auction mechanism transparency
All properties are auctioned-off by the decision of respective banks with the approval of the high court and land office, where the auctions are only conducted by licensed auctioneers. There is transparency in the entire process, from the listing-off to the ability to bid for it at auction. There are no grey areas to question the sale of a property, for a consumer market dictates the sale price of a property at auction.
Saves time & effort of buying @ new launches
Instead of attending developers’ new launches to find the best deals, why not try a different approach to get the best deals? The time and effort in lieu of researching and attending new launches, along with inquiring and cajoling early-buy deals, could easily be redirected towards auction properties.
Doing your own research on auction properties, you will quickly realise that a number of local websites list these properties on a daily basis. By just spending some time on them, you will discover numerous attractive deals up for grabs.
Saves time & hassle of buying though sub-sale
Buying property at auction also saves much time and hassle in negotiating the purchase of a property with an agent or owner. Bypassing the traditional sub-sale mechanism has its advantages; for you are able to purchase a property purely at the real reflection of consumer market value.
Also, remember that you can request to physically view the property beforehand if there is an existing tenant (with a tenancy agreement) occupying the premises. Many investors forgo this step as they expect owners/ tenants to refuse. Try your luck anyway – some owners welcome the chance of obtaining a higher bidding price and some tenants would want to continue renting from the new owner.
Considerations for buying auctioned properties
The property auction mechanism of buying and selling to the highest bidder has been around for centuries all around the world. And it is always advisable to seek out someone with superior knowledge and experience in buying and selling auction properties if you decide to take a closer look.
To conclude, Ken also shares a few pointers to keep in mind when considering auction properties.
Find your dream property
The auction process allows purchasers to think of property of not just an investment based asset, but something which touches the soul and warms the heart. An auction property could possibly enable you to purchase a property that may be your ‘dream home’; by buying-in at a price you may never have thought possible — making dreams come true.