Friday 17 February 2012

Process of buying an auction property

1. Inspect the property
Enquire with occupants and/or neighbours if there are defects such as subsidence, termites or a bad history.

2. Obtain proclamation of sale (POS) from agent or auctioneer
This provides the property's details such as tenure, restrictions and whether the foreclosing bank will pay the outstanding bills.

3. Search at the land office or with the developers
Verify that the POS information is correct with a land office search costing approximately RM30. Also check with the developer or management office on outstanding bills.

4. Get a bank draft for the deposit
Deposit with the auctioneer a bank draft made out to the bank. For Loan Agreement Cum Assignment (LACA) properties, this deposit is 5%. For non-LACA properties, it is 10%.

5. Prequalify yourself for a loan
Besides the 10% downpayment, the balance 90% must be paid up within 90 to 120 days. To get a loan for this 90%, bring the POS to a bank and ask the loan officer if you're qualified.

6. Complete the auction registration form
Complete the aunction registration form before the aunction day or on the day itself. Receive your assigned bidder number and terms and conditions of sale.

7. Bid at auction
Auction venue depends on type of auction property. Loan Agreement Cum Assignment (LACA) properties do not have a title; a charge to the bank has not been created. This happens when the master title is being subdivided, or when the strata title is being transferred.

LACA properties are usually apartments and condominiums sold in bulk by private auctioneers. These aunctions may be conducted in a hotel or within the auctioneer's premises.

Non-LACA properties possess titles. These are often landed properties and are auctioned in the high court (eg Kuala Lumpur High Court at Jalan Duta) or at land offices.

theSun, 17 February 2012

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