eauction of bank and property auctions

Normally bank auction process is initiated when borrower default on 3 consecutive Home Loan EMI’s. A notice is served to the customer to respond within 60 days that why the bank should not initiate a auction of property due to default in payment. Borrower can pay the installments and this notice is withdrawn. Otherwise Borrower can submit his objection within 60 days with justification for non-payment of EMI. In case, no reply is received from borrower or bank is not satisfied with the reply then bank can initiate bank auction process. Once this notice expire after 60 days, bank can auction the property after 30 days.

Step 1: Search for Bank Auction Property

This is one of the most painful step as there is no organized data in India. EauctionsIndia.com providing information on Bank Auction Properties. we are providing information at free of cost. we are updated regularly. The other sources of information are Newspapers, Notice posted in Bank Branch or Notice posted in the Society. For easy search, i suggest that instead of paying for search to get complete details, you can search for Bank Auction Property on our webiste. Note down basic details including Bank name and then either visit the bank branch or search for auction notice through banks website / newspaper.

Step 2: Check Property Details

Once you shortlist bank auction property, carry out preliminary check on our own. Check market price of the property, obviously reason for bank auction is payment default but check out any legal dispute, bank auction related details and how can you participate in bank auction.
The biggest problem with Bank Auction is that you will not have get access to property papers before purchase for title search. Banks are not willing to share much information. Sole objective of bank is to dispose off the property. If you are seriously interested in buying the property then it is advisable to hire a lawyer or expert for this process. One important point to check is Balance outstanding of the defaulter. In many cases balance outstanding is much higher compared to Reserve Price. Please check if the property is auctioned at amount below balance outstanding amount then how bank will recover the balance amount. In such scenarios, defaulter has to pay the balance amount but better to clarify. If final bid amount is more than outstanding amount then balance amount is paid to the defaulter by the bank.

Step 3: Physically Inspect the Property

It is advisable to physically inspect the property. Now a days banks have started mentioning the inspection date and time in auction notice. You can visit the site at designated time to inspect the property. In e-auction notice you will find the contact details of concerned officer. It is advisable to contact him and get all the details. Now one good thing is that if bank is organizing physical inspection then it means bank has physical possession of the property. It is always advisable to buy property where bank has physical possession. In case of notional or symbolic possession, winner of bank auction process will struggle to get the possession. After auction bank will be totally non-cooperative. In some cases, it may take years to get physical possession or you may need to file a court case to get physical possession.

Step 4: Submit Bid Form

In this step, you can collect Tender Form and you should deposit EMD (Earnest Money Deposit) along with Tender form. EMD is normally deposited through Banker’s Cheque or Demand Draft. Please check all details in tender form and submit your tender before the Tender Closing Date. Along with Tender form, bank also demand KYC documents. As the time is very short therefore you should arrange all documents well in advance. One of the most common reason for rejection of tender form is incomplete tender form i.e. either KYC documents are not available or Tender form is not filled properly.