{"id":60179,"date":"2022-10-07T13:56:32","date_gmt":"2022-10-07T05:56:32","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=60179"},"modified":"2022-10-11T15:19:14","modified_gmt":"2022-10-11T07:19:14","slug":"pros-and-cons-of-buying-auction-properties","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/pros-and-cons-of-buying-auction-properties\/","title":{"rendered":"Pros and cons of buying auction properties"},"content":{"rendered":"
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When it comes to buying property, property auctions usually aren’t the first thing that comes to mind. Most people embarking on their property purchase journey only think of three main routes:<\/span><\/p>\r\n\r\n\r\n\r\n

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  1. Balloting for a BTO flat<\/span><\/li>\r\n
  2. Buying a resale HDB flat<\/span><\/li>\r\n
  3. Buying private property from the open market or a developer<\/span><\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n

    But not many are aware of a lesser-known, fourth option: Buying a property in an auction sale.<\/strong> This is where \u2013\u00a0<\/span>like the name suggests<\/span><\/em>\u00a0\u2013 properties are placed on auction and go to the highest bidder. These auctions are conducted by licensed property firms, where properties are marketed to multiple bidders at one time.\u00a0<\/span><\/p>\r\n\r\n\r\n

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    \"\"<\/figure><\/div>\r\n\r\n\r\n

    Why do properties go on auction?<\/span><\/strong><\/h2>\r\n\r\n\r\n\r\n

    Let’s clear some things up before we proceed. There’s the common misconception that mortgagee sales are synonymous with property auctions \u2013 they’re not, but they’re a form of property that can be found in auctions.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

    So what are mortgagee sales?<\/span><\/strong>\u00a0Mortgage sales happen when owners fail to service their mortgage and default on payments. The bank then steps in to seize the property and sells it off on auction to recoup the losses.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

    On the other hand, some properties are voluntarily put up for auction by the property owners themselves.\u00a0<\/span>Why?<\/span><\/em>\u00a0Reasons are aplenty: Some owners may want to sell their property to liquidate their assets as fast as possible due to divorce, a court order, to generate buzz around their property or simply\u00a0<\/span>because they can<\/span><\/em>.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

    Two<\/span><\/a>\u00a0<\/span>rounds<\/span><\/a>\u00a0of cooling measures in two years, coupled with the interest rate hikes<\/a> throughout 2022, might spook some owners into offloading their properties quickly to avoid overextending themselves financially, leading to more auction listings.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

    In fact, according to\u00a0<\/span>Knight Frank’s Q2 2022 Auction Report<\/span><\/a>, residential listings rose by 214% from Q1 2022, from seven to 22 listings. Industrial listings rose by 225% over the same period, from four to 13.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

    What happens at a property auction?<\/span><\/strong><\/h2>\r\n\r\n\r\n\r\n

    There are many types of properties that go on auction, with residential properties making up most listings. Here are some pros and cons of buying a property at auction.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

    Pros<\/span><\/strong><\/h3>\r\n\r\n\r\n\r\n

    1. You might be able to get a good deal<\/span><\/strong><\/h4>\r\n\r\n\r\n\r\n

    Since property auctions aren’t the mainstream option in Singapore for property buyers, there’s a higher chance you’ll be able to scoop one up on the cheap. You might even be the sole bidder on the property, which means you won’t have to fight anyone for it (metaphorically speaking, of course<\/em>).\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n