[Practical Finance] "Determined to Own a Home"... Bidding Success Possible with Diligent Research and Effort

Auction is an opportunity to acquire real estate at a price lower than the market value. However, there is a risk of significant loss if mistakes are made. Therefore, in auctions, thorough research including rights analysis, market price comparison, and property inspection is essential to minimize errors.

If you find a property you want to buy at an auction, the first step is to visit the court auction information website. Through detailed property searches, carefully examine the appraised price, area, and actual photos.

Once you select a property you like, proceed with rights analysis to verify the legal rights associated with the property. First, you need to find the cancellation standard registration, which is the earliest registration among ▲mortgage ▲provisional seizure (attachment) ▲security pre-registration ▲auction entry registration ▲jeonse right on the registry. When the auction takes place, most other rights are extinguished, so focus on the cancellation standard registration.

There are rights that remain even after the auction sale. These include tenants with jeonse or monthly rent who were registered first but did not participate in the distribution (priority jeonse right), 'provisional disposition' which legally restricts disposal of the property, and 'statutory superficies' which allows the building owner to continue occupying even if the landowner changes. Properties with such complex rights require special caution.

After completing the rights analysis, you should inspect the property in person. Unlike photos, the actual property may have defects that could incur high maintenance costs. Additionally, it is advisable to visit nearby licensed real estate offices to check if there are any issues with the property and whether the appraised price and expected bid price are appropriate.

On the bidding day, you need to prepare your ID card, seal, and bid deposit. For proxies or joint bids, both the bidder’s and proxy’s ID cards and seals are required, and to prevent the bid from being invalidated, a certificate of seal impression, power of attorney, and seal of the absentee must be submitted. The bid deposit is usually about 10% of the minimum sale price, and for properties that have failed to sell, 20-30% of the price should be prepared as a deposit.

If you succeed in winning the bid, you must pay the remaining balance. Typically, after the bid, the court verifies the bidding process for one week, and then interested parties such as the winning bidder or debtor have one week to file objections. Once this process is complete, the winning bidder must pay the balance within one month.

The final procedure is 'myungdo,' which means evicting the previous occupants from the auctioned house. In auctions, there is a custom of supporting moving expenses to reach an agreement for the occupants to leave. If they still refuse to leave, legal procedures through compulsory execution must be followed. However, this process can take a long time, so reaching an agreement is faster and more certain.