Sunday, March 18, 2007

Buying Foreclosed Properties Via Auction

When looking for properties to buy whether for as an investment opportunity or for personal use, a great alternative to real estate developers, foreclosed bank properties or from private individuals is buying via auction. Auctioned properties are often cheaper than foreclosed properties offered by banks. But ironically, most property auctions being held are conducted by banks whose properties they were unable to dispose of.

Banks that are auctioning off their foreclosed properties are usually selling properties that they were unable to sell via normal means, which makes you think that the properties up for auction are not attractive to begin with. But there are diamonds in the rough. There a lots of reasons why the property was not able to be sold. Maybe the price being offered was too high before, or the place is located near a squatters area which is extremely not attractive to a prospective buyer but now SM is building a mall very near the property being auctioned, how can you go wrong buying a property very near SM city mall right?

But before you dive in and buy every cheap property for up auction. You must conduct and inspect the place you are planning to bid on, even if it is near Makati or other attractive cities to live in. After coming up with your list, visit the place and ask around the neighborhood about the history of the house, check and see if the property is near schools, hospitals, public roads, LRT or MRT stations which makes is a great buy. If you don't conduct visitations, you might end up buying a property near a cemetery, one way roads or near slums and end up being neighbors with holdupers, drug dealers or carjackers.

Once you found the right property for you you are ready to bid. Most auction houses require you to bring a show money in the form of cash or cashiers check. And after winning the bid. They often offer very flexible terms on the financing of up to 25 years in most cases involving property auctions conducted by banks. Pag-ibig also has an extensive list of properties for auction and now they have lowered their loan rates makes it even more attractive to consider them in you list of finding cheap properties for auction.


Anonymous said...

how would you get hold of an auction invite or auction information? I have heard of such auctions but can never seem to get in the action - i can barely get hold of any information regarding these auctions. Would you be able to help me?


Andrew Sheldon said...

I don't recommend waiting for the auctions to buy foreclosed property. It makes more sense to negotiate on your terms, rather than bid on theirs.