(ECNS) -- Online auctions of foreclosed property are drawing wide attention in many Chinese cities, but lawyers and auction companies warn home buyers to do careful research and avoid potential transaction risks, Beijing News reports.
In April alone, Beijing's court portal, bjgy.chinacourt.org, released information on more than 40 foreclosed properties, including those slated to go under the hammer next month, while the number for sale listed by Lianjia, the city's leading housing agent, on its website also reached around 40 last Friday, the paper said.
One of the homes listed on the court portal, located in Changping district with a floor area of 109 square meters, has a price tag of 2.31 million yuan ($357,000). By contrast, a similar second-hand home displayed on Lianjia's website is priced at between 2.68 million and 2.8 million yuan. As a result, the former has attracted 64 groups of potential home buyers so far.
Foreclosed homes are not subject to existing purchase restrictions and are usually less expensive than commercial housing on the market, which are their biggest advantages, the paper said.
But courts require full payment at the time of purchase and loans are not available. Ownership transfer procedures are also complicated and need relevant documents issued by the court, which can take a significant time, according to the paper.
Auction companies suggest that potential buyers read auction announcements with great care, with particular attention given to ownership details, utility bills, and whether construction violates any law or if dwellers live in the home. They also advise home buyers to do on-the-spot investigations and make inquiries to authorities in advance.
In addition, a lawyer told home buyers to examine whether the targeted property has any unpaid debts such as land use fees owed to regulators, which could amount to more than 1 million yuan for a foreclosed home sold at 3 million yuan, according to the paper.