Big Opportunities in Property Auctions
I think I may have shot myself in the foot recently.
I found a gem from the classifieds: A double-storey linked house in Subang Jaya was up for auction. The house was empty (not tenanted), in good condition, on freehold land and get this, the reserve price was only RM230,000, well below the market value. In short, it ticks on all counts. I remember rubbing my eyes to check if they were playing tricks on me. But the Proclamation of Sale received from the auctioneer confirmed that it was true.
So I turned up at the Shah Alam High Court on the day of the auction with a big smile on my lips and dreams of grandeur in my brain.
But that smile soon disappeared. I discovered, to my horror, that there were 33 other bidders there, so much so that they practically filled up the auction room! Man oh man! That is the highest number of bidders for a property I ever experienced in my years of attending auctions. So I knew right there and then that it was a goner. My dreams of grandeur pretty much vaporized into thin air in that auction room. In fact, I just sat there quietly during the auction and just waited for it to end so I can collect my bank draft from the auctioneer. (For those who are interested, the winner of the auction (if you can call him that) paid RM360,000 for the house, above the market value.)
So the times have certainly changed.
Life used to be simpler. I find an interesting auction notice in the classifieds, get the Proclamation of Sale from the auctioneer, do some homework which includes checking the title at the Land Office and then if everything is in order, turn up at the court on the day of the auction. Usually, there are only two or three other bidders for the property which means my chances of winning is quite high.
However, the situation has changed drastically in the past few years as the number of bidders has increased significantly. (Sadly, I probably have contributed to the situation by writing books and articles on property auctions!)
Still, despite this drawback, I must add that I’m still very much into property auctions. There are two reasons for this. The first one is that the number of properties being auctioned has increased tremendously from five years ago. Today, there are literally hundreds of properties being auctioned each and every week day. While most of them are no good (due to the poor location and high price), I can still find two or three interesting ones every day, which equal to 15 a week and 60 a month! And that is a lot of properties! What’s even more interesting is that the number of properties being auctioned can only increase as more people defaults on their mortgages. (The people using the old formula of buying five properties in one go by taking on monster mortgages are prime candidates to see their properties being repossessed.)
The second and more exciting point is because the quality of the properties being auctioned has also improved. While many of the properties are still located in the not-so-interesting areas, today I see properties in Damansara Heights, Kenny Hills, Mont Kiara, Taman Tun Dr Ismail and even the condos around KLCC being auctioned. The prices of these properties may be too high for most people at this point, but I believe that in the coming days, prices will drop to a more reasonable level, and then things will get really interesting then.
However, I need to add a cautionary note here. Yes, the opportunities in property auctions are there. But that does not mean that one will be raking in the money just because one bought a property from auctions. The traps in property auctions are there and they are mighty big. So those who go in without the relevant know-hows may eventually lose money instead of making it!
This tie in with what I’ve long been saying – anything that comes with an opportunity to make lots of money also comes with the opportunity to lose a lot of money!
Allah is always by your side, Insha Allah, Insha Allah, Insha Allah
Judul: Big Opportunities in Property Auctions
Ditulis Oleh farid idris
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