- Risk of Litigation and Legal disputes: Properties have various legal aspects to check before it is selected for investment. Now a day's property agents are deeply involved in most of the deals and they are unafraid to offer properties which are tangled in a legal problem. It is very difficult to find out the clear property in the current market.
- Finance Risk: It is difficult for a normal buyer to purchase the property of completely own fund, so financial assistance from the bank or other institution is required. The property may not be considered by the bank for loan assistance depending on its policy; in that case buyer can face a difficult situation of arranging the fund.
- Late Possession: The new flats and apartments offered by the builders are prone to possession risk. The builders take money in advance and delay the handover of the property on the due date. Such problems are very common and it is difficult to rule out such risk.
The above mentioned risks are very common and furthermore, the problem of transfer of title, hidden encumbrances, etc. deters the home buyers to take the traditional way of buying the property. The builders also charge a premium according to the location and choice demands of the property buyers, so the cost of property increases significantly along with the expectation.
The solution to the difficulties in the traditional way of buying property lies in buying properties at auction. A normal investor avoids the property through auction due to following reasons:
- Lack of understanding.
- Lack of information about auctions.
- Due to problem with fund arrangement for auction.
- Communication gap between stakeholders in auction.