Foreclosure sales in July rose 16.9% month-on-month, experts reminded to do their homework before bidding

  Can a foreclosure room that removes the blind box really save money?

  How to buy a house in the most economical way?

It is one of the most important questions for every home buyer.

In recent years, the number of foreclosure houses has surged, and with the mentality of "picking up leaks" and "Taobao", foreclosure houses have also attracted the attention of buyers.

  According to the report of Hanhai Data Research Institute, 173 houses were sold in Beijing foreclosure in July, a month-on-month increase of 16.89%.

Among the auctioned listings, 127 sets were sold in the first auction, 34 sets were sold in the second auction, and 12 sets were sold; the total number of people participating in the auction was 1,081, and the average number of people participating in the auction was 6.2, and the average transaction discount was 8.0%.

  Is this 20% off foreclosure really much lower than the market price?

Can ordinary people buy cheap foreclosure houses?

Regarding the issues that these buyers are concerned about, Beiqing Real Estate's investigation found that in order to "purchase" a low-priced foreclosure house, it is necessary to rely not only on luck, but also on professionalism, and it is still essential to do enough homework in advance.

  The number of legal auction houses has increased, and multiple intermediary platforms have shared the food market

  According to the comprehensive statistics of other platforms such as Ali Auction, Jingdong Auction, Public Auction Network, People's Court Litigation Asset Network, etc., the number of legal auction houses will continue to increase sharply in 2022.

  Since 2017, the number of foreclosures across the country has increased year by year.

In 2017, the number of foreclosure houses was 9,000; in 2018, the number was 20,000; in 2019, the number was 500,000; in 2020, the number was more than 1.2 million; in 2021, as of mid-December, the number has exceeded 1.68 million units.

  It is worth noting that it usually takes 2-3 years from judicial seizure to auction execution.

In other words, most of the foreclosure listings currently on the market were seized around 2020-2021.

  With the increase in the number of foreclosures, foreclosure platforms and service agencies have also sprung up.

  Foreclosure listing information will be published on relevant court websites. Ali Assets and JD Auctions also have dedicated foreclosure information platforms. These platforms are only used for information display and do not charge bidders commissions.

In addition, there are also intermediary platforms that specialize in auction houses, which will provide one-stop services to the auctioneers while displaying the information of the auction houses.

  Beiqing Real Estate sees that, different from general second-hand housing trading platforms, due to the complexity of its housing listings, the information displayed on each platform is more detailed, and the content involved is very complex. Everyone needs to do careful research.

  For example, each auction listing will have a description of the bidding requirements and the basic information of the subject matter, prompting the auction participants to conduct on-site sample inspections, investigate the information of the subject matter (such as transfer requirements, violations of regulations, etc.), understand bidding qualifications, and entrust an agent. and final payment method.

  "Blind box" foreclosures have attracted attention and transactions have risen for 4 consecutive months

  According to the report of the Hanhai Data Research Institute, in July, 451 houses were listed for legal auctions in Beijing, 370 houses were effectively opened for auction, and 173 houses were sold. It rose 16.89%, showing an upward trend for 4 consecutive months.

Among them, the residential transaction rate was 60.29%, which fell below 70% for the first time in the past five months; the villa transaction rate was 39.13%, down 6.7 percentage points from June; the commercial office transaction rate was 27.54%, up 11.45 percentage points from June.

  "There are some new foreclosure listings on the shelves every day, and the auction starts one month after the listing. Depending on the specific needs of the buyers, we will help the buyers to screen the listings." A forensic real estate agent said, generally The common concerns of foreclosure buyers are mainly the transaction costs and transaction security of the listing.

Will the listing be expensive, what should I do if I can't accept the room as agreed?

  According to him, foreclosure brokers mainly provide services to buyers for these pain points in buying foreclosures.

The specific process is to sign a contract with an intermediary company before purchasing, and pay 1.5% of the listed price of the pre-purchased house as a performance bond. The loan expects this information to help bidders make a feasible plan.

If the transaction fails, a 1.5% performance bond can be returned.

If the transaction is completed, 3% of the auction price of the listing should be made up as an intermediary service fee.

  "Many foreclosures are in a sealed state, or the seller is unwilling to cooperate. So if you can't see this listing, we will take customers to see the same apartment in the same community." The above-mentioned intermediary said that if it is an old house in Dongxi City, Most of them have no decoration. For second-hand houses with newer buildings, the gap in decoration will be relatively large. Some have photos for reference. For bidders without photos, it is a "blind box" purchase, which can only be seen after the transaction is successful. The real situation inside the property.

  "Before, there was a foreclosure house in Beijing that was a haunted house. No relevant information was found at the time of the first auction. The bidder only found out after he bought it, and then found the court to check out. After supplementing the relevant information, this house was re-examined. It took two shots." The above-mentioned intermediary said.

  From the perspective of intermediaries, foreclosure houses are highly volatile, and a batch of houses is changed every month. It is difficult for ordinary home buyers to have accurate control over the source of each house only by collecting information on their own. The intermediary's competition report is particularly important.

  Does the leak method save money?

  Since the process of buying a foreclosure property is so complicated, and there are still people willing to participate, is it possible to save a lot of money just by participating in a foreclosure property?

  Not really.

Some second-hand housing urgently-sold listings are likely to see sharp price cuts, which makes the price advantage of foreclosure properties even more blurred.

  For example, in May this year, Haidian Chenyueyuan Community sold a set of two-bedroom houses of 89.57 square meters after 51 bids. The price was 8.3866 million yuan, and the average price was 93,600 yuan per square meter.

At almost the same period, the transaction price of second-hand houses of similar units in the same community can reach an average price of 94,500/square meter.

At the same time, the current intermediary fee in the second-hand housing market generally ranges from 2% to 2.5%, so basically this Haidian auction house has almost no price advantage.

  On the whole, if you want to "find leaks" and "save money" in foreclosure auctions, you need a part of luck. In addition, you need to do your homework, carefully calculate your budget before bidding, and control your expenditure costs. save money.

  "For ordinary people, it may be more suitable to have a clear choice of community. For example, I want to buy this community. I check to see if there are any foreclosure properties for sale, and I have a better understanding of the community. Only then can I consider foreclosure.” A Ms. Wang, who is buying a house, said that if she can’t see the house, she thinks it’s inconvenient for foreclosure, maybe it’s time and money cost, and the final transaction price won’t save much. Money is the main reason why she gave up the foreclosure.

  "It is necessary to see if the overall cost of the house itself can be borne by oneself. Before the auction, you should also check whether there is a large unpaid gap in the property fee and heating fee of the house, which all need to be paid by the bidder. As well as second-hand housing In the process of transaction, there are also taxes and fees or land transfer fees for some houses. After all these are calculated clearly, we will know if we have really missed it.” Guo Yi, chief analyst of Heshuo Institution, said.

  Lawyer: Foreclosures need to be careful to prevent multiple disputes

  It is worth noting that another important reason for the high popularity of foreclosures is that there was no previous purchase restriction policy requirement.

However, the "Regulations of the Supreme People's Court on Several Issues Concerning the Qualification of Bidders for Judicial Auctions of Real Estate by the People's Court", which will be implemented on January 1, 2022, means that the legal auction houses will be completely restricted.

When the people's court organizes the judicial auction of real estate, the auction announcement issued shall state that the bidder must have the qualifications to purchase the house and the corresponding legal consequences. If the bidder applies to participate in the auction, he shall promise to have the qualification to purchase the house and voluntarily bear the legal consequences.

The release of this judicial interpretation means that the difference between foreclosure houses and ordinary houses has further narrowed, and the investment value has shrunk.

  Attorney Zhang Xing, managing partner of Jintai Law Firm, expert of the Supreme People's Procuratorate's accusation and appeal consulting database, and deputy secretary-general of the Contract Law Professional Committee of the Beijing Lawyers Association, said in an interview with Beiqing Real Estate that under normal circumstances, the production of foreclosures It is possible that due to the failure to repay the commercial loan or private loan as scheduled, the bank or the lender requested the court to realize the mortgaged real estate auction to repay the loan; or in a criminal case, the court made a decision on the real estate obtained by criminals through criminal activities in a financial case. Seizures; there are those arising from unowned property, which refers to unclaimed real estate, and the auction proceeds need to be turned over to the state treasury.

  Zhang Xing said that at present, the problems that are prone to occur in foreclosure houses are generally reflected in four aspects: vacating houses, invisible defects in houses, disputes over ownership, and the possibility of high taxes and arrears in foreclosure houses.

Among them, people pay more attention to the issue of vacating the house.

What the court auctions is the property right of the house and does not guarantee the buyer's right to use it.

If the house is rented out or occupied, it will be handed over by the buyer and the lessee, and the court generally does not force the removal.

Article 725 of the Civil Code stipulates that if the ownership of the leased property changes within the period of possession by the lessee in accordance with the lease contract, the validity of the lease contract will not be affected.

If the lessee refuses to hand over on the grounds that there is a lease, the situation will be very complicated and the bidder should pay special attention.

  Zhang Xing suggested that for ordinary buyers, first of all, they should fully understand the basic situation of the foreclosure house, including the basic situation of the house, relevant information about the foreclosure, the market price, the security fund of the foreclosure, and also pay attention to the foreclosure. Whether the balance can be loaned, and pay attention to the time limit for payment completion.

  For example, whether the listing has major defects, including the nature of the house, floor, orientation, living environment, transportation, property, heating, parking spaces and fees, supporting facilities, schools, hospitals, etc.

The nature of the land transfer, whether to obtain the real estate certificate, if the land is allocated, the land transfer fee must be paid in the second transaction; if it is a pre-sale house, because the real estate certificate cannot be obtained immediately, it may still face a second dispute.

  Secondly, it is necessary to understand the local housing purchase restriction policy to avoid loss of security deposit due to the failure to purchase a house due to your own qualifications.

The general deposit is 5%-20% of the auction price, and the deposit will not be refunded once the auction is regretted.

  Third, prepare the required materials in advance.

The process of buying a house for foreclosure is different from that of an ordinary commercial house. Therefore, buyers should consult the staff in advance, the precautions for the transfer of foreclosure and the materials to be prepared.

The court will generally cooperate with providing relevant materials, and pay attention to the notice and announcement of the court.