What is your initial impression of foreclosure auctions?
It may not be so bright.
Let us find out.
Court auction is a process in which the court converts assets into cash based on the Civil Execution Act. Real estate agents do not "buy" or "broker" properties for you, so you must take the full responsibility from bidding to taking possession. Of course, the courts do not broker deals. And nobody will compensate any damage or take any responsibility regarding the property. Hence, the bidder should have some knowlege and experience.
For more ⇒ Court auction
Not so difficult
Talks about civil enforcement laws and credit collections may put some people off. Although not phrases one hears everyday, foreclosed properties are traded not so differently from others.
Are there some hidden defects?
Properties sold through the court auctions are not any different from those on the ordinary real estate markets in this respect. For example, there are sometimes assets with dark history, such as an occurance of suicide or murder. But you can find the facts about properties by carefully reading the court documents about the properties before the bid. You ought to take care, however, that documents are usually six months old. Things can change meantime so you should conduct your own research; and when you find something significantly different from what is on the documents, you should notify the court. You should verify facts and conditions thoroughly, particularly before paying for the property.
More risks than in ordinary trades?
Previously there were some issues with the market for real estate in the court auction process. A series of revisions to the Civil Execution Act from 1993, however, significantly mitigated risks after acquisitions.
There are risks involved in acquring any asset. However, while brokers reduce some risks in general transactions, buyers of real estate through court auctions must take full responsibility on their own, particularly for not thoroughly reading and analyzing court documents on the properties. As in other significant trades, it is probably wise to have auction concierges as experts assist in the transactions. By understanding risks, and taking available counter-measures beforehand, bidders may able to reduce the risks.
The largest risk
The largest risk rests in not being able to see the inside, so one cannot estimate the renovation and other costs after acquiring the asset. Auction specialists thus take those risks into the bids. Buyers may reduce the risks by utilizing the services of professional agents.
Uncertainty about the interior
The uncertainty is warranted, of course, but there are some benefits to counter; one may obtain an asset at lower cost than in the normal markets; one may have an opportunity to purchase a rare property which may not come out in the regular real estate markets; and one may allocate the saved fund into interior renovations.
Reliable professional agent
Auction concerges of the 981.jp are regular members of FKR; some with licensed agents in transacting real estate in court auctions. THey are professionals in handling real properties in court auction process and in providing relevant services. So please utilize their services in your transactions.
Five key points
Knowing the risks