Centuries back the Romans used the technique of auction to liquidate the assets of the debtors whose property has been seized. Similarly in the present scenario, the banks and the other financial institutions are authorized to confiscate the mortgaged properties of the debtors and that too without the intercession of the court. Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) have delegated the power to the banks and other financial lenders. The properties which are recovered are consequently sold in the auction for the recovery of the liabilities. The surplus amount recovered is handed over to the original owner of the property. Auction has a long history which still finds its existence in realty property markets.
Methodology of auction:
Auction is a popular method of buying a property without much hurdle. Usually the bank adopts this method to dispose-off the properties. The auction is conducted by an authorized officer appointed by the bank. A prior notice of the auction will be declared in the newspaper and on the bank’s website for public notification.
The notice will hold information like property details, the preliminary price of the bidding, location and the timing of the auction, Earnest Money Deposit (EMD), date of inspection, place and time for collecting the tender form, last date of submitting the tender form etc.
Generally the auction is conducted at the bank’s premises. However online auctions are also available now-a-days.
Process of participating in an auction:
This is one of the feasible methods of owing a property. The only and prime requirement of buying the property through auction is to carry a detail study and have necessary information of the property in which you are interested.