Commercial Real Estate Auctions: Tips & Strategies to Acquire a Good Property

One of the easiest ways to find and acquire authentic commercial real estate properties for investment or business use is to participate in bank auctions. The banks conduct such auctions to recover capital from the market by selling non-performing assets (NPAs).
“The market size of the real estate industry in India was valued at around 120 billion U.S. dollars in 2017 and is estimated to reach one trillion dollars by 2030. In 2022, over 2.5 billion U.S. dollars’ worth of investments were expected in this sector across the country.”


These assets are kept as mortgages to get loans from banks and financial institutions. When borrowers cannot pay back the loan amount, they are considered defaulters, and the lender becomes the owner of the mortgage assets as per the SARFAESI Act, 2002. The bank then conducts a property or land auction to attract potential buyers.
Tips for buying auction properties
Buying commercial properties has its risk. A buyer will have to perform his due diligence and check whether a promising property is not attached to any liabilities or not. A property or land auction conducted by banks can be the best bet.
Here is a list of tips an interested buyer should follow to acquire a commercial property.
1. Check online auction portals
The first step is to go online and check the digital auction portals for promising auctions by banks and financial institutions. These portals cater to a consolidated platform where the information regarding auctions conducted by the leading public sector banks and financial institutions is displayed.
You will get a clear idea of the commercial bank E-auction property available in particular locations. These portals are the best gateway to finding such authentic properties at once. It is optional to indulge in visiting banks' official websites to seek such information.
2. Be ready with the earnest money deposit (EMD)
Remember, you must register in an e-auction portal to participate in such events. Such events are catered nationwide, and interested buyers register on such portals. After checking the reserve price of properties, an EMD has to be deposited to get recognized as an eligible bidder. Once the bid opens, you can place your cost and make necessary changes accordingly.
3. Deposit after winning the bid
If you win a bid, you will have to deposit an amount of as much as 25% of the reserve price of a commercial auction property. It needs to be done within the stipulated time fixed by the auctioneer.
4. Seek professional assistance
Many bidders need to be aware that E-auction service providers offer professional assistance to them in exchange for a nominal service charge. Seeking such services make registering in the portal, arranging EMD, booking deposit, and bidding much more effortless. Get a competitive edge by availing of such professional services.
5. Property authentication
Even though a bank E-auction property gets authenticated by an auctioneer and the e-auction portal service provider, perform your due diligence and then make a move.
Verdict
Remember these tips and tricks to successfully own a commercial auction property from a bank or a financial institution. This way, you can acquire and invest in commercial properties at a reasonable price and make significant progress in real estate investments.

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