Thursday, October 15, 2009

first experience in auctions...

Perhaps this doesn’t equate in an ordinary manner, but I traded approximately three weeks and 50 bucks to buy an experience in property auctions.

Before anyone jumps into conclusions, I did not manage to get the unit auctioned.

Here’s how the story goes.

I spotted a pretty decent auction unit while rummaging through the classifieds 3-4 weeks back. After the usual queries, an agent alerted me of another condominium studio unit in a location which has been interesting me a long while. I got the common information I could get from the agent and paid the unit a visit the following day.

Visiting the auction property is a must, if you do not know yet, because you’ll never know if you are buying an auction unit with a corpse tucked nicely in the fridge (you know, the Mont Kiara case several years back). But having said that, 99 of out 100 times you’ll never get to view the inside of the unit because 1) the unit’s vacant with padlocks intact; and 2) the person staying there refuses to open the door for you. Well, unfortunately but expectedly, yours truly belong to the group of 99.

Anyway, knowing the area and location, I was somewhat confident that the unit is decently priced below the market value and after a week of research, found that the unit’s being auctioned for the second time (and 10% cheaper than the original auction price). Also, after checks with several agents and database, figured out that it’s around 15% below the market value, which is pretty decent.

The following week, I arranged with another agent to view a unit for rent which is identical with the auction unit so that I can look at the actual layout with my own eyes. Not the nicest thing to do, I have to admit, but that’s the best I can do to have a good grasp of what I’m getting into.

Within the same week, I also visited the land office twice. I arrived at the land office in the afternoon for the first time and got turned away because the land office does not check documents in the afternoon (?). Don’t ask me why, but that’s the reason uttered by the man over the counter. In Bolehland, anything can happen and that includes government employees being barred from searching for documents after 12pm. Good luck in achieving Vision 2020.

Anyway, had to return the following day to make the title search, as well as to check whether any caveats are lodged on the property. After being directed to 3-4 different counters, I finally manage to get the property’s strata title presented in front of me.

It’s but a whole load of jargons.

Can’t really decipher anything encrypted in all of the 3 pages and considering that I can’t photocopy it, I end up staring blankly at the documents not knowing what I should be looking for. I had to request the office staff to explain the important things that I want to know, which is 1) if the defendant the rightful owner of the auction unit; and 2) whether there are any private caveats lodged on the property. And I got good news for both.

Went through the proclamation of sale with the agent again after that and was assured that the bank will bear all outstanding arrears so everything seemed fine. All the recipe for a perfect buy.

But if some things seem too good to be true, usually it’s too good to be true.

Several days ago, I dropped by the auction unit again and this time I lingered around with the security guards to know more about the current owner. Little is known about the owner except that she defaulted payment amounting several thousands, and the weird thing is the neighbour of this unit is so reluctant to talk to me (I bumped into the neighbour in the lift) he’d rather stare right at the lift’s wall than to speak up.

This bothered me for a couple of days. What if the owner’s still staying there? What if she refuses to move out after the auction? Is she even alive? Why is the neighbour so afraid when I asked questions about the auction unit?

After much consideration, I decided to back out from the deal.

But having gone through almost the entire procedure, I went to the auction anyway, and bought the banker’s cheque that will enable me to enter the auction room.

Thank God I made up my mind early, because on auction day there were 7 other bidders who’re targeting the same unit. And the proud new owner of the auction unit is a middle-aged lady who’s obviously a newbie in auctions.

How do I know?

Because she raised the last three bids without anyone counter-bidding and she got the unit at a price 15% above the market value (might as well scout the market for sales if you’re gonna pay a price like that). The judge actually had to stop and ask if she knows she’s upping the price herself before the hammer finally comes. Not my problem anyway.

It was fun while it lasted, and despite all the hassles and troubles I think it was a worthwhile experience. I’ll be glad to go through the entire ordeal again if I can unearth another gem in the auction market in the future.


cLiu said...

good to hear that. even thought u didn't get the unit, as long as u learn the process, got the experience, is worth all the hassles.

Livingmonolith said...

yeah, i guess that's the important point, it's always better to learn hands-on rather than reading the books only.

let's hope there'll be more good deals in the future. :)