NOTE WHEN BUYING REAL ESTATE FOR SALE FROM BANKS

Many people are interested in real estate for sale because they think the price is cheaper than the market, but in fact this is not necessarily a "bargain", according to experts.

I see a lot of information about banks that sell real estate such as houses and apartments. The selling price I find is quite attractive because it is lower than the market. But because I dont have much experience, I wonder if I should buy houses that are sold by banks? What should this asset transaction pay attention to?

Looking forward to experts and readers for advice.

Reader Nguyen Binh

Consultants:

Real estate for sale is understood as collateral for loans of individuals or organizations but cannot afford to repay the loans. If the owner fails to pay the debt on time, the bank will confiscate and liquidate the collateral to recover the debt.

Many people are interested in real estate for sale by banks for a number of advantages. The first is that the legal papers have been carefully appraised, ready to be transferred to the buyer, for example, the apartment must have a pink book. This will help buyers limit legal risks when buying real estate. Second, banks often provide buyers with financial loan packages to promote asset sales.

Another important reason coming from the psychology of many buyers is that the price of real estate for sale is cheaper than the market. However, you should note that not all cases have "bargain prices". The reason is that many properties are overvalued when the bank approves the loan, especially during the peak of the market development.

For example, in 2021, a house is valued at 10 billion VND by a bank, a 70% loan is 7 billion VND. However, now, when the market goes down, the price drops to 8 billion VND, 70% of the house value is only 5.6 billion VND. If you put down money, the value of this house will still be calculated according to the 2021 valuation. Not to mention, the sale price of real estate usually includes the principal balance plus loan interest and bank penalties. Therefore, buyers should get rid of this "bargain" mentality, which is cheaper than the market.

Real estate for sale also has some potential risks. Buying real estate for sale involves three parties including the bank, the owner and the buyer. If the buyer is less experienced in real estate sales, the process of completing the transaction will take longer. In case the owner has not fulfilled the obligation or does not cooperate with the handover, you will have to wait for the competent authority to participate in enforcement. You also have to bear some additional costs such as transfer tax or related outstanding fees.

Therefore, buyers of real estate for sale of banks need to pay attention to some of the following issues:

Firstly, you should revalue real estate, and compare it with the current market level to determine if the banks sale price is really attractive. If you do not have a lot of experience, you should hire a consultant to be able to accurately value the property.

Second, the buyer needs to ask the bank to provide information and legal records of the property to understand the reason for the sale, to avoid a dispute with a third party or the real estate is in the planning area. .

Third, you need to clearly lay out the pricing and sales process to avoid post-purchase risks. One note is that when buying through the auction, the buyer will have to pay some additional fees. This payment needs to be made by tripartite at the bank instead of paying directly to the former owner.

Mr. Vo Hong Thang
Director of Consulting Services and Project Development Division DKRA Group