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Auction properties are offered in a range of prices depending on the type of property selected as well as the condition, history and location of the house.

Genuine buyers that are interested to secure a property, should consider purchasing right now as the market sentiment is currently bullish. What this translates to is a higher chance for one to come across unbeatable deals within the primary and secondary housing markets.

There is however, an alternative means of homeownership via a method not usually explored by unseasoned property purchasers; buying a property through a means of auction.

Zerin Properties Urus Harta chief marketing officer Aziz Shah tells, "auction property purchase has been a popular means of buying a home or other property investments amongst buyers, as it is one of the best ways to gain ownership of a property that can be bought below market value.

Properties usually enlisted as an auction entry are usually repossessed by financial institutions. This happens when the owner of a designated property is no longer able to meet the foreclosure thus an auction process will take place”.

“Reserve prices usually begin from the market value of the property, which is supported by a valuation report. Each time there happens to be no bidder for a designated property, the value drops by 10%”, VMS Auctioneer chief executive officer Gunalan A/L Munusamy explains.

Auction properties are offered in a range of prices depending on the type of property selected as well as the condition, history and location of a house. Similarly, the age of an auction property can also vary.

A property can be enlisted for auction once it is completed or during vacant possession of a new house; when a property purchaser doesn't serve their loan. Consequently, banks will step in and take action by auctioning such properties.

Once an auction commences, interested purchasers are to raise their bidding card.

Auction Process

The process of auctioning a property usually begins when financial institutions advertise via public notices (newspaper, online posts, social media) regarding properties shortlisted for auction, whereby several photos and addresses of selected residences or investments would usually be published.

“Potential purchasers are unfortunately not able to enter the aforementioned units up for auction and are only able to view externally. Prospective buyers would then obtain a proclamation of sale (POS) or conditions of sale (COS) to clearly understand the details entailed by one’s selected property,” Aziz explains.

Once the said documentation is achieved, an interested purchaser should run a caveat search, check for hidden costs and proceed to seek legal advice on the property, Gunalan shares.

Aziz adds, “on the actual auction day, purchasers are required to register before an auction commences. The registrant's identification cards, a bank draft of estimate deposit (variable amount) and additional funds, should the bank draft value fall short of the deposit amount, are required. A bidding card would then be issued thereafter, purchasers would be allowed to enter the auction hall.”

Once an auction commences, interested purchasers are to raise their bidding card for the property they intend to own however, at certain instances due to excitement bidding wars do take place thus, bidders should always preset a ceiling or maximal price that one is comfortable with, for a selected property.

Once a successful bid is finally reached, the aforesaid deposit will be handed over to the financial institution (that has repossessed the selected property) and following this process, a 90 to 120-day grace period is given for the successful bidder to secure remaining funds needed to gain ownership of a selected auction property.

Virgin (Auction) Buyers Guide

Gunalan advises, “Property purchases via auction process differ from conventional methods, as an auction can only take place with completed properties. Buyers are attracted based on a reserve price and the auction property is sold to those that are able to offer a highest bid.

First time homeowners may achieve a property with greater value as well as rewarding experiences upon completing a successful auction process. There are several obvious benefits with regard to securing an auction property however, one should always tread carefully”.

The key advantages that one would be awarded when purchasing an auction property include gaining ownership of a property below market value in any location that one may opt for, provided there are auction properties available in that area.

Gunalan adds, “As for first time buyers, an easy entry of 10% upfront payment is needed while 90% will need to be financed by a bank via a loan, similar to when one intends on purchasing a conventional property.

Additionally, one would only need a stamping fee furnished to an auctioneer, for the preparation of a contract of sale, thus the sales and purchase (S&P) or lawyer fee is not required when purchasing an auction property”.

Buyers considering owning an auction property can refer to this checklist provided by Gunalan as follows:

1) . Obtain the proclamation, condition and terms of sale from the auctioneer.

2) . Read and fully understand all the terms and conditions of sale.

3) . Conduct an official search on the parent title at the land office and/or other                   relevant authorities.

4) . Inspect the property from exterior.

5) . Verify pertinent particulars of the documents.

6) . Verify the postal address of property with the relevant developer.

7) . Check on the issuance of separate individual titles with developer.

8) . Seek legal advice on the terms and conditions of sale herein.

9) . Make necessary enquiries with the relevant authorities and the developer on the terms and conditions of the consent with regards to the sale herein.

10) . Understand that the property is sold on an ‘as is where is’ basis.


Property owners that are looking to secure an investment should take note that purchase via auction has its plus points as well as downsides.

Some of the top advantages of owning a property through auction include buying at a fair price or below market value, escaping lengthy negotiations and tedious purchase processes, the ability to purchase an auction offering via loan and the notification prior to auction dates, due to common practice for prospective homeowners to physically view an auction property.

On the flip side, the downside of owning an auction property includes a property being sold as an “as is where is” basis, the fact that no vacant possession is issued, future homeowners not being aware of the actual state of the property (condition of the unit internally and structural stability) and last but not least, if a buyer is unable to conclude the purchase of an auction property within the 90 to 120-day period from the date of deposit payment, one's initial deposit paid will be forfeited.

(By Viknesh Ashley Clarence, 18 April 2019)

Are you now well-equipped to embark on the adventurous mission of auction property purchase? Do let us know what you think about purchasing such property through the comments section below!


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Thank you for the information, perhaps should do and compile survery on the real life hazzard of auction properties...