Foreclosed homes for sale: what you see is rarely what you get

Auctioned homes can be 15-30% cheaper, but true bargains are rare after factoring in repairs, legal risks, delays

- Shipra Singh

A₹1.5 crore ground-floor apartment in central Delhi, listed at ₹1.2 crore, looked like a steal. Sanyam Jain thought so too and contacted the bank for details.

The paperwork was clean and showed no dispute. Curious and cautiously optimistic, he decided to inspect the property before registering for the auction.

What he found changed his mind. The flat had been neglected for years, with visible structural damage. The outer boundary, an important extension for ground-floor units in the area, was missing. Neighbours had taken over the space for parking. Rebuilding it, though technically his right, would likely involve disputes with neighbours and potential run-ins with local authorities.

“Even before moving in, I would have been dealing with conflicts and repair costs,” he said. Once he factored in renovation expenses and the hassle, the price advantage disappeared. He walked away.

Jain’s experience isn’t unusual. For many retail buyers, auctioned properties promise attractive pricing, but navigating the process requires time, expertise and a tolerance for risk.

Auction: process and pricing

Bank auctions typically involve properties repossessed after loan defaults and sold under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest or SARFAESI Act to recover dues.

Listings appear across bank websites, newspapers and third-party aggregators. Auctions by public sector banks are listed on Baanknet, an e-auction platform developed by the department of financial services (DFS), while those from private banks, NBFCs and housing finance companies are available on platforms like AuctionTiger and Hecta.