This article will show you the guides for winning bidder after auction.
1️⃣ As we had mentioned in the earlier article, that the winning bidder have to immediately pay a 10% deposit of final property price. If your bank draft is insufficient, you will have to pay the additional by cash, bank draft or credit card.
2️⃣ For the balance 90% payment, you will be given 90 or 120 days to pay, depending on the Condition of Sale. Therefore, its very important to submit your loan documentation paper to your bankers as soon as possible and instruct your lawyers to start to conduct the necessary legal paperwork.
3️⃣ Although you won the bid and paid a 10% deposit, but legally the property is still not yours. You will only officially becoming the property owner once the balance 90% payment has been paid. If the property is vacant, some buyers will begin the repair or renovation work in order not to waste any time, especially the property investors. As time is money. The first thing need to be fixed is definitely front door, it is best to change the door lock to ensure other people can’t simply access this property.
However, there is a little risks involved here because if you fail to pay the balance payment within the due date, the bank definitely has the right to forfeit your 10% deposit and re-auction the property. Hence, all your renovation cost and deposit are fly away. Therefore, the efficiency of your lawyer is a key, because the bank may not agree to extend the time period for completion. Especially the buyers who taking bank loans to finance their purchase as there are additional legal steps involved.
4️⃣ It is advisable to buy insurance to protect the property against fire, flood and other damages right away. This is because you have an “insurable interest” in the property upon payment of the deposit. Some Proclamation of Sale have state this clause “once the auction is over, the property now becomes the bidder’s responsibility with regards to thief, flood, other damages , etc“.
5️⃣ Once you pay-off the remaining 90% of payment within the due date, congratulations, you are now officially and legally the new owner of the property.
Golden rules for every buyers who interested in auction
Although auctions is a fantastic place to buying properties below the market price, but there are also have some existing risks such as previous owner failed to pay the utilities fees, service charges for developer and etc. Therefore, before the auction, you should always do your homework on the property that you’re going to bid and get yourself a lawyer to conduct the checking on the property details. Good Luck!
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