How to buy property at a cheap price In India ?

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Today I will tell you about foreclosed properties and how you can buy them for lower than the market price. Trust me it works !

What is the meaning of Foreclosed Property ?

Many times, banks seize the properties when their owners fail to pay their EMI payments for a long time. These properties are called “foreclosed properties” and banks put them for sale in the auction in order to recover back their dues. Once the properties are seized by banks, they are the rightful owners of the property under the Sarfesi Act and they have 100% legal rights to sell off these properties.

These properties are mainly sold below the market price because the focus on banks is mostly to recover bank their dues and not to make profits. So you can strike a very good deal if you are ready to go through the process of buying foreclosed properties.


Advantages and Disadvantages of Buying Foreclosed Properties :

  • Competitive Price Advantage: Auction properties are approximately 20-25% cheaper than the market price.
  • Legal and Safe: Banks / Financial Institutions approve loans after verification of all the legal aspects only. Bank Auctions are legally safe and fall under the SARFAESI Act and DRT Act.
  • Quick Process: The entire transaction will be over in less than 2-3 months period. Ownership will be transferred within a month’s time.

Disadvantages of Foreclosed Property

  • No Guarantee of quality or internal condition: Bank cannot provide any disclosures as to property history/condition issues. If there is any damage to the property then the banks will not repair and give. Property conditions might be suspect due to damage done by upset homeowners.
  • Heavy initial Money requirement: Only serious buyers are entertained as you have to put a big amount as a guarantee
  • Tedious Process: To some people, the process may seem to be tedious and Tiresome.
  • After this now the question comes How to Find these Foreclosed Properties ?

How to Find Foreclosed/Seized Properties ?
The data and information about foreclosed properties are quite Private. There is no single central database of information where you can find them altogether. Here are some ways you can find information about foreclosed properties :



What documents are needed for property foreclose?

The bank will have to provide documentary proof that the borrower has defaulted on the loan for a prolonged period and will not be able to settle his loan in the foreseeable future, to launch property foreclosure. It will have to produce the notices sent to the defaulter, evidence of missed EMIs, and all the details about the borrower’s outstanding loan liability.

Precautions to be taken While buying Foreclosed properties :

Assess the market value

For a prospective buyer, foreclosures are a great opportunity to buy a property at a lower price. Figure out what you are willing to spend, and stick to it. Do market research, spend time visiting more auctions and get a feel of the market. Learn more about the procedure of buying a foreclosed property.

Examine the condition of the house

People who default on mortgage loans know that they may lose ownership over their property, and usually stop maintaining it well. Review the foreclosed property thoroughly to determine its condition and the correct market value. As they do not have much time, many homebuyers cannot afford to inspect the property themselves. The best bet would be to appoint a skilled advisor to do so. If you delay the process, you may end up spending more on repair and maintenance of the property.

Hidden foreclosures

The first question that may come to your mind is what hidden foreclosures are. These properties are made of new mid and upscale homes that were freshly built. The construction-loan period expired without those homes being procured. The second question that comes to your mind would be why they are called hidden foreclosures. These properties are foreclosed because of lack of promotion. So, these properties are less likely to appear on national multiple listing sites. Professional real estate agents see these properties. They will be in charge of handling the sales deal. If you find any hidden foreclosure, make sure that you follow all the essential steps for safeguarding, so that you can purchase the property securely.

Homebuyers should do their research because there could be liens on these properties from taxes or other claims. Some of the foreclosed properties often need many repairs that you may find expensive and time consuming. Typically, foreclosed homes are not in a very poor condition. Few minor repairs will be enough. With a little bit of renovation, you can sell off the property at a much higher price.


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