Buying an auction property sounds exciting, but you need to be clear, calm and informed. Below is a point-by-point breakdown of what to check and why it matters.

1. Don’t get blinded by the low price

Low price looks attractive, but it usually comes with risk. Understand why the property is being auctioned and what problems forced the borrower into default.

2. Verify the property title

Make sure the ownership chain is clean. Check for court cases, disputes, multiple mortgages, or missing approvals. A bad title can block your possession or resale.

3. Check the type of possession

Two types exist:

Symbolic possession: Bank has legal control but property may still be occupied.

Physical possession: Property is empty and bank has full control.

Always prefer physical possession. Symbolic possession can lead to long fights.

4. Inspect the property physically

Visit the location. Confirm if the property is vacant, damaged, encroached or illegally occupied. Photos usually hide the truth.

5. Read the auction notice carefully

Key terms to understand:

EMD (Earnest Money Deposit): Refundable deposit you pay to participate.

Reserve Price: Minimum price set by the bank.

Bid Increment: Minimum amount by which each new bid must increase.

Auction Date & Time: The final and only chance to bid.

Payment Schedule: Deadlines for paying the balance after winning.

6. Check for dues and liabilities

Auction properties often carry unpaid dues. Check for:

• Electricity bills

• Water bills

• Society maintenance dues

• Property tax pending

• Bank’s pending charges

You must pay these after winning, so include them in your budget.

7. Understand legal risks

Check for:

• Court cases

• Family disputes

• Tenant disputes

• Government restrictions

If anything looks unclear, consider it a warning sign.

8. Arrange your funds in advance

Auctions move fast. You must pay the remaining amount within a short period. If your loan is not ready, you risk losing your EMD.

9. Don’t overbid in excitement

Auctions trigger competition. Set a fixed upper limit and stick to it. Winning at the wrong price is worse than losing.

10. Expect delays and stay patient

Auction deals take time. Paperwork, approvals, possession and clearances can move slowly. Prepare for delays so you don’t get frustrated.

Final Words

Auction properties can be great deals if you know what to check and what to avoid. Slow down, verify everything, and make decisions with a clear head instead of emotion.