Behind the Auctioneer’s Hammer
Distressed property auctions-spanning mortgagee sales, estate executions, and court-mandated liquidations-frequently attract buyers searching for discounted luxury condos, landed houses, or commercial strata units. However, bidding in an auction room requires thorough preparation and immediate financial liquidity.
Essential Due Diligence for Auction Buyers
- Immediate 5% to 10% Cash Outlay: Winning bidders must immediately execute the contract of sale with a non-refundable cashier’s order or cheque on the auction floor.
- In-Principle Bank Loan Approvals: Having confirmed credit facilities in place is mandatory, as failure to complete within 8 to 10 weeks results in full deposit forfeiture.
- Title and Encumbrance Searches: Conducting thorough title deed checks to verify outstanding caveats, tenant leases, and unauthorized structural renovations.
Reserve Prices vs. Bargain Expectations
Financial institutions are legally bound to achieve fair market valuation, meaning reserve prices are rarely set at fire-sale discounts unless assets have faced prolonged exposure without qualifying bids.