Buying a property is one of the biggest dreams most people have. While you can simply scout through many options based on location, price, and other added advantages and buy a house. However, there is one more way of buying a house — bid and buy! You can participate in a Neelami also known as an auction and acquire a property. Check out the meaning of Neelami and how you can go about the entire process.
See also: What is E-auction of a property?
Neelami (auction)
Neelami or auction, is the way where a product is sold by means of bidding and the highest bidder gets the product. This has been one of the oldest and commonly used methods to sell products.
Bank Neelami/auction
Properties that face financial problems undergo distressed sale. Failure to pay back the loan have resulted in banks and non-banking financial companies (NBFCs) auctioning properties. This has been regularised in the real estate sector by way of e-auction, a common way of selling properties practiced in both residential and commercial segments.
Pros and cons of buying properties through Neelami/auction
Pros
Regularised and transparent: The Neelami process is regularised, transparent, and fair with each bidder getting an equal opportunity to bid and make an offer.
Short time to close the deal: The Neelami process has a short timeline, enabling buyers to close the deal as soon as possible. This is faster as compared to buying properties in the traditional way.
Discounted price: As banks or NBFCs (money lenders) selling properties are interested only in getting back the money they have invested, they do not want to make profits. These properties are sold at heavy discount rates as compared to the market rates.
Cons
Physical condition of the property: These properties are generally not well maintained as the property owner doesn’t have resource to maintain them or pay the outstanding loans. Evaluate the property on auction and see if it fits your bill before bidding for it.
Legality: There may be some properties under dispute. Due diligence is required so that you don’t invest in a property entangled in any legal issues in addition to non-payment of loan.
Lack of information: Akin to traditional listings of real estate properties, not much information is available about properties that would be auctioned.
FAQs
What is Neelami in the real estate sector?
Selling a property through bidding and handing it to the highest bidder is known as Neelami in the real estate sector.
What should you know before opting for a property purchase through Neelami?
Due diligence is required, fix a budget accordingly, and arrange money to make full payment.
Can you apply for a loan for buying a property through auction?
Yes, you can avail of loan for buying a property through auction. Note, these come with certain terms and conditions.
What are the property types you can buy through Neelami?
You can buy residential, and commercial units, plots, etc., through Neelami.
What are the risks associated with the Neelami property?
You may encounter properties that may be in legal problems owing to title issues.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
