Want to pick up leaks and shoot a house? It is difficult to clear the site, high taxes, and high-energy risks ahead, please pay attention!
As the impact of the new crown pneumonia epidemic on the economy and life diminishes, the foreclosure market in Shanghai is recovering.
According to statistics from Shanghai National Auctions, a total of 110 residential houses were sold for foreclosure in Shanghai in May, an increase of approximately 44% from April; 172 units were sold in July, an increase of approximately 72% from June.
Bi Gong, who has worked in Shanghai for many years, continues to pay attention to the foreclosure market because foreclosure prices are much cheaper than ordinary second-hand houses and are not restricted.
"The price of foreclosure houses is generally 20% cheaper than ordinary second-hand houses. I started to pay attention to foreclosure houses a few years ago, but the loan was inconvenient before, so I never started. According to my observations, the situation is much better now. When the auction website browses foreclosure housing information, you can directly see which foreclosure housing can be borrowed, which banks can borrow, and how much can be borrowed on the page.” Bi Gong said.
The sources of foreclosed houses are mainly bank loan disputes, private lending disputes, state confiscation, and property ownership.
Because the price of foreclosure is generally lower than the market price, and there is no restriction on the qualification of buying a house in some cities, it has been favored by many buyers in recent years.
So is it worthwhile to buy a foreclosure property?
What are the legal risks?
Foreclosure is not the price of cabbage
According to the "Regulations of the Supreme People's Court on Several Issues of Online Judicial Auctions by the People's Courts" (hereinafter referred to as the "Regulations on Online Auctions"), the starting price of online judicial auctions shall not be lower than the assessed price or 70% of the market price.
If the auction is unsuccessful, you can get a 20% discount on the first unsuccessful price in the second auction.
Therefore, the starting price of the house in the second auction may be 5% off the market price.
Among the four megacities of Beijing, Shanghai, Guangzhou, and Shenzhen, Shanghai is currently the only city with no restrictions on the purchase of foreclosure properties.
But in fact, in Shanghai, the probability of wanting to pick up the leaked property for auction is getting lower.
According to the statistics of Shanghai National Auctions, the prices of foreclosure auctions in May were below the assessed price, accounting for 32% of the total transaction volume, and more than 68.18% of the targets were sold at higher than the assessed price; in July, more than 68% of the targets were sold at higher than the assessed price. Appraisal price transaction.
Wang Shenglan, the founder of Blue Whale foreclosure and a national registered auctioneer, told China Business News: "Since late March this year, the premium for foreclosure in Shanghai has been severe. Foreclosure properties under 5 million yuan have a basic premium of 5% to 20%. According to our statistics, an average of 8 people participated in the auction of a house, and the largest set of more than 50 people participated in the auction. The foreclosures that were originally thought to be leaked can only be bought at more than the market price."
Why is there a premium for foreclosure properties after the epidemic?
Foreclosure housing market is a relatively niche market in Shanghai's second-hand housing market.
In 2019, the number of transactions in the second-hand housing market in Shanghai was about 240,000, while the number of transactions in the foreclosure market was 1,703, accounting for only 0.7% of the number of second-hand housing transactions.
Wang Shenglan told CBN reporters that more and more users who just need them want to buy foreclosure houses. First, because the epidemic has made many people realize the importance of houses, some foreigners who have worked hard in Shanghai are eager to buy houses after returning to Shanghai.
Second, because the epidemic prevented the children of many customers from going overseas, many customers from Jiangsu and Zhejiang came to Shanghai to buy houses.
“In addition, due to the epidemic, the courts have not opened the door for a long time, and the speed of handling cases will slow down. Last year, more than 3,000 foreclosures were sold in Shanghai and more than 1,700 were sold. The epidemic has also led to fewer foreclosures this year. "Wang Shenglan said.
Foreclosure
Another concern of Bi Gong's delay in not starting a real estate auction is that there will be subsequent legal disputes in the foreclosure.
"If the house has already been settled, the buyer needs to solve it by himself, and the auction website will not explain the situation in detail. This is very annoying. If the previous house insists on not moving, there may be another lawsuit." Bi Gong said.
Foreclosure room can't be shot by heading.
Wang Shenglan told China Business News that, based on her estimation, 30%-40% of the foreclosure properties in Shanghai have more or less problems.
Wu Wei once photographed a foreclosure house in Baoshan District, Shanghai a few years ago, but he did not expect to encounter the problem of clearance.
"At that time, the homeowner was cheated of money because of the routine loan and mortgaged the house. After the house was auctioned, the landlord stayed inside. The court was not responsible for clearing the premises. The small loan company he owed often came to harass." Wu Wei Tell the first financial reporter.
Until the end of 2019, Wu Wei finally took back the house through various channels and the spring breeze of sweeping the black and evil.
"After I took back the house, I made a paperback and sold it. Fortunately, the purchase price was low at that time. I calculated it and the principal was not lost, but the rent for the past few years has gone in." Wu Wei said.
If there is a long-term lease record for a foreseeable house, the auction announcement will show "Auction with Rent", but privately signed lease contracts generally do not have a lease record.
Wang Shenglan reminded buyers of foreclosed houses that they must investigate the rent of the foreclosed house before the auction is completed. If the house is negotiated with the tenant after the auction is completed, once the tenant sits on the land and raises the price, it is too risky for the buyer. Big.
Issues of ownership transfer and taxes are also common hurdles encountered by foreclosure buyers.
Blue Heart's 2017 auction of a foreclosure house located in Shanghai's Hongqiao area, after the auction, it was found that the actual area was 2 square meters less than the announced area. In addition, the tax and fees agreed at the auction were all borne by the house, and the original owner only handled it. If the advance notice registration is completed, the cost of the second transfer is much higher without the formal production certificate.
In the process of buying a foreclosure house in Shanghai, generally, taxes and fees are paid separately. The buyer only needs to bear the deed tax, and the original landlord bears personal income tax, value-added tax and stamp tax.
However, in the announcement of individual foreclosure auctions, there may be cases where "the buyer shall bear all taxes and fees".
"I pay all the taxes and fees for this house. I need to deal with the deed tax for the first time the house was purchased, and the value-added tax and personal income tax for the second auction transaction." Lan Xin said, "If the person being enforced does not come forward, The tax bureau will collect the first deed tax by default according to the maximum payment coefficient of 3%. If the person subject to execution proves that the house is the only house of his family, then the deed tax only needs to pay 1.5%, which will generate more than 100,000 yuan. What’s more, the value-added tax will be levied at 5.35% of the full amount, which is a very high cost."
In order to solve this series of problems, Blue Heart finally found the developer's group company at that time, and after several tossings, the enforced person was found to deal with the follow-up problems.
"In order to avoid the difficulty of transferring the foreclosure property, buyers should carefully read the auction announcement before the auction to confirm the tax burden, and it is best to check the property history transaction records and property adjustment information." Wang Shenglan said.
Wang Shenglan reminded foreclosure buyers to pay special attention to some types of houses that cannot be transferred: the ownership of municipal supporting houses is registered under the name of the municipal authority, and only certain persons can handle the transfer; some or all of the property rights of public houses belong to the state All, the transfer conditions are very harsh; historical preservation buildings cannot be sold, exchanged, or donated without approval; houses whose land is collectively owned, that is, "small property houses", do not have property certificates.
Guo Ren, a real estate and financial lawyer at Yingke Law Firm, also believes that there are many pitfalls in foreclosure, and taxes and fees are likely to be big pits. Pay special attention to the situation of "all taxes and fees paid by buyers" in the auction.
"A customer of ours once fancyed an office house in Jing'an District, which was 2 to 3 million yuan cheaper than a market house. After doing our due diligence, we found that this house could not be bought. The biggest abnormality was: 18 years ago, the landlord was at that time The purchase price is 200,000 yuan, and the difference is 5.8 million yuan; because of the nature of the office, Fang Dongfang must pay taxes and fees of 60% of the difference, which is more than 3 million yuan in taxes and fees. Because it is agreed that all taxes and fees will be borne by the buyer If it is taken, the price of this house is similar to that of residential houses on the market, and the taxes and fees on subsequent sales will be high, and there is no investment value." Guo Ren said.
Foreclosure housing and tax-related pits may also involve land premiums.
According to Guo Ren, when a buyer took a picture of a shop and went to the trading center to apply for a production certificate, he found that the buyer had to make up a high land price because the house was also a commercial house and could only enter the market after the land price was paid.
How to escort judicial auctions
At present, the main online judicial auction platforms are: public auction, Taobao (Ali auction), and Jingdong.
The auction website will list a lot of important information for buying a house, such as the type of house, the status of the lot, the ownership status, whether it is rented, whether it is occupied, the household registration status, the tax payment method, and the arrears.
However, the auction announcement is usually marked: This court does not assume the responsibility of guaranteeing the defects of the subject.
If the bidder decides to participate in the bidding, it shall be deemed to have a complete understanding of the auction property and accept all known and unknown defects in the auction property.
Judicial auctions are not refundable within 7 days like ordinary online shopping.
Article 24 of the "Online Auction Regulations" stipulates that if the buyer regrets the auction after the auction is completed, the deposit paid shall not be refunded.
If the auction is resumed after regretting the auction, the original buyer shall not participate in the bidding.
For high-risk foreclosures, how will the law escort home buyers?
How can home buyers avoid risks?
Regarding the clearance and delivery of foreseeable houses, Zhao Lirui, Judge of the Executive Bureau of Shanghai Pudong New District People’s Court, stated that in accordance with Article 30 of the Supreme People’s Court on the Auction and Sale of Property in Civil Enforcement by the People’s Court, the People’s Court ruled the auction. Or, after the unsold property is used to pay off the debt, except for circumstances that cannot be transferred according to law, the auctioned property shall be transferred to the buyer or heir within 15 days after the delivery of the ruling.
If the person subject to execution or a third party possesses auction property that should be handed over but refuses to hand over, it shall be enforced.
The Supreme People's Court has repeatedly demanded that the enforcement court shall not indicate in the auction announcement that the court is not responsible for clearing the market, that is, in principle, it should clear the market before the auction.
If the person outside the case or the person subject to enforcement infringes the buyer’s residential interests and possession rights after the auction house is transferred and delivered, the buyer can sue or report to the enforcement court in accordance with the law, and the people’s court will pursue the legal responsibility of the relevant personnel.
In addition, the court also provides full auction assistance work for the auction, including but not limited to promotion, sample viewing, bidder registration, assistance in registration, transfer, tax payment, etc., and does not charge any intermediary fees.
"There are more than 40 auction houses in Shanghai shortlisted for the auxiliary agencies of the court, and the court draws the number to decide which auction house will be responsible for which auction project. The auxiliary court does some auction work, and the information in the auction announcement is generally produced by these auxiliary agencies. , The court confirmed; the auxiliary agency is also responsible for taking inspections and answering customer consultation calls, but generally will not explain and investigate content other than the announcement. "Wang Shenglan told China Business News reporter.
"Auction websites will also provide third-party auction services such as lawyer due diligence, commissioned sample inspection, transfer and application, and tax calculation. As to whether it can really help buyers avoid risks, it depends on the professional capabilities and resources of the service provider. "Wang Shenglan said.
(At the request of the interviewee, Bi Gong, Lan Xin and Wu Wei are pseudonyms)
Author: Sun Weiwei