Costs to Budget for When Buying Bank Auction Property

Most auctions require a deposit (धरौटी) with your bid. The amount, the form it must take and the conditions for its refund are all stated in the notice. Treat the deposit as committed money from the moment you bid: if you win and then cannot complete the purchase, the notice may allow the bank to keep it.

If your bid is accepted, the rest of the price has to be paid within the period set in the notice. Make sure the money will be ready in time, whether it comes from your own funds or a loan. Loan approval for an auction property takes time, so talk to lenders before you bid, not after.

Transferring land or a building into your name involves registration at the Land Revenue Office, where registration fees and related charges are paid. The amount can depend on factors such as the location and value of the property and the buyer’s circumstances, and the rates change from time to time. The bank’s notice should say who pays these costs in an auction sale; if it does not, ask.

For vehicles, the ownership transfer (नामसारी) costs are paid at the Transport Management Office. For shares, transfer charges are set by the depository system or the company’s share registrar.

Depending on the asset and the terms of the sale, taxes may apply to the transaction. Whether any of them is the buyer’s responsibility in a bank auction, and how it is worked out, is something to confirm with the bank and a tax adviser before you bid. If you sell the property or shares later, tax on any gain may also apply at that point. Tax rules and rates change, so rely on current advice rather than on what applied to an earlier sale.

Auction property can come with arrears. Ask the bank which of these the buyer has to clear, and check with the municipality, the ward office and the utility providers:

• Unpaid land revenue (मालपोत) and municipal property tax.
• Electricity and water bills.
• For apartments, service or maintenance charges owed to the building management.
• For vehicles, unpaid vehicle tax or renewal fees.

Budget for the advice that protects your purchase: a lawyer to review the notice and the title documents, a licensed surveyor to confirm the boundaries, an engineer to assess a building, and a valuer if you want an independent view of the price. Fees vary, so ask for a quote in advance. For share auctions, allow for demat, broker or registrar charges. Our guide to documents and checks before bidding explains what each check is for.

Auction property is generally sold as it stands, and it may have been empty or poorly maintained for some time. Allow for repairs, cleaning, new locks and reconnecting utilities. If the property is occupied, getting possession may take longer and cost more than you expect. For machinery or vehicles, collecting and transporting the asset is often the buyer’s responsibility.

If you use a loan, include the lender’s processing charges, valuation fees, insurance, and interest from the date the loan is drawn. Ask each lender for a written breakdown and compare the offers.

Add up the costs above, keep a margin for the unexpected, and set your maximum bid from what is left. It is easier to walk away from an auction than from a purchase you cannot complete. Browse current bank auctions, shortlist the properties that interest you, and ask each listing bank for the full notice so you can see which costs apply before you commit a deposit. For general questions about the site, see the FAQ.