What are foreclosed properties?
A ‘foreclosed’ or ‘distressed’ property is that property which is being auctioned off because its owner defaulted on the mortgage which he took on that property. Under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (‘SARFAESI’) Act, when the borrower for a mortgage is unable or unwilling to pay her equated monthly instalments (EMIs) three times consecutively, the lender has a right to acquire her property and either sell or lease it out.
Foreclosed properties fetch a lower price compared to other properties
Foreclosed properties are generally expected to be auctioned off at rates lower than their true market values. According to news articles, properties repossessed by banks are routinely sold off through auctions at prices that are “20-30% lower than the prevailing market rate”.
How are these properties auctioned off?
Auctions of foreclosed properties can take place through either online or offline modes. The offline mode requires the bidder to submit her bid and other requisite documents to the bank before the date of the auction. Platforms such as, bankauctions.in as well as the websites of individual banks such as State Bank of India (SBI) and Canara Bank facilitate online auctions or e-auctions for distressed properties.
How can TEAL help in making a safe property purchase in Thane?
Information about the distressed properties to be auctioned off and the date of the auction is often released by banks in newspapers. Additionally platforms such as, foreclosures.in and bankauctions.in provide auction details in particular cities including Thane.
Property buyers are often apprehensive about purchasing them because of the possibility of these properties being of poor quality. The perception is that loan defaulters may have been struggling financially, causing them to neglect undertaking the due repairs of their property. The foreclosed properties could also have other encumbrances and municipal dues pending. This perception often impedes a buyer’s decision to purchase a foreclosed property. It is possible for you to make a secure purchase of a distressed property by carrying out a title verification or title search of that property.
We at Terra Economics and Analytics Lab (TEAL) help clients instantly access property information using big data analytics and machine learning. Our real estate due diligence platform- ‘TEAL Check’ helps the user access land and title records, litigation information and municipal records of more than 40 lakh addresses in Delhi-NCR, the Mumbai Metropolitan Region and Pune. It is easy-to-use and gives reliable and comprehensive property-level information. You can generate property reports on TEAL Check now by clicking here.
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At TEAL, we are building the next generation of property due diligence using big data analytics and machine learning. We provide reliable information about property ownership, registration status, disputes, tax compliance history and all other information that you will need to make a safe and secure property investment. To learn how TEAL can help you in your journey, visit tealindia.in.