Take Note, Advantages and Disadvantages of Buying Auctioned House


An Auctioned house is a house that has the status of confiscation from the bank which is then auctioned because the debtor is unable to pay off the Kredit Pemilikan Rumah (KPR) bill or is involved in other debt cases. As a result, the collateralized house will be transferred through an auction process to reach the highest price to pay off the debt of the guarantor of the house.

However, there are still many people who do not understand or are not familiar with auction houses. No doubt, questions still arise and even raise their own fears when they have to decide to transact this type of dwelling.

Property Expert Pinhome Vina Yenastri explained the advantages and disadvantages of auction houses.


1. Cheaper price

Vina said, the main advantage that must be known when buying an auction house is a cheaper price of 20-30 percent of the market price. This is due to the minimum house price limit that has been set by the bank. The bank will not set the price too high so that the foreclosed house is quickly sold. Prospective buyers can also participate in the auction according to the desired budget limit. “The price can be 20-30% cheaper than the market price, because the auction house from this bank will not open up high prices either. There is already a minimum limit and there will be bidding from the auction participants, who has the highest price.” said Vina.

2. Developed environment

In contrast to new houses, auction houses are generally located in developed areas and finished residential areas, and are in a ready-to-use condition, not an indented unit. This is because the auction house has been used by the previous owner for several years. Also read: Want to Buy an Auction House? Here’s How The advantage that can be obtained by prospective buyers is that they do not have to wait to be able to inhabit the auction house of interest. Meanwhile, the new house is located in an area that is still developing and on vacant land.

3. Complete facilities at home

Another advantage is that the existing auction house facilities can still be used, for example canopies, fences, kitchen interiors, and even ready-made gardens.


Although auction houses offer various advantages over other types of housing, this does not mean that this type of house is free from disadvantages. Furthermore, Vina said it was important to know the disadvantages of buying an auction house.

1. The condition of the house is not maintained

The disadvantages of the auction house also need to be considered before deciding to buy. Some of the shortcomings found were that most of the auction house’s conditions were not maintained because the old residents had moved and no one was caring for or repairing the house.

2. Occupants have not moved

Another example is that the old occupants still live in the house, but usually there is a dispute that causes the old occupants to not want to leave the house.

“There is another problem with buying an auction house, a dispute or an old occupant who doesn’t want to leave. Sometimes the winner of the auction has to make a Deed of Employment if the problem occurs, eventually the process becomes longer,” she explained.

3. Payment scheme

Another drawback of the auction house is the payment scheme. The auction house must be paid off in no time. If it is not paid in accordance with the specified time limit, the security deposit or down payment (DP) that has been paid will be lost.

Prospective buyers must take into account from the start if the payment scheme chosen is not cash payments but mortgages. The mortgage application process must be carried out by the prospective buyer at the beginning of the process before the auction begins.

“The security deposit or down payment will be lost if the prospective buyer wins the auction but it is not paid off, unlike those who do not win the auction, the security deposit will be returned again. So if you pay for a mortgage, after selecting the property and winning the auction, we already have a credit approval letter from the bank as payment,” she said.

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