Cheras Auction Guide: Buy Lelong Properties Below Market

Cheras is one of Kuala Lumpur's most popular residential areas, offering a mix of affordable and mid-range properties. For savvy buyers, bank auction or 'rumah lelong' properties in Cheras can be a golden opportunity to purchase below market value. However, navigating the auction process requires knowledge and preparation.

What is a lelong property in Cheras?

Bank auction, or lelong, properties are those repossessed by banks from defaulting borrowers and sold at public auction. In Cheras, you can find various types: condominiums, apartments, terrace houses, and even commercial units. The key attraction is the potential to buy at a discount, often 10% to 30% below market value. But remember, auction properties are sold on an 'as is where is' basis, and the bank does not provide warranties.

Why Cheras is a hotspot for auction properties

Cheras is a mature township with excellent amenities, public transport (MRT, LRT), and ongoing development. This high demand means properties here retain value, making them attractive to both owner-occupiers and investors. Auctions in Cheras are frequently held at the Kuala Lumpur High Court or via online platforms.

How the auction process works

The auction is governed by the Proclamation of Sale and Conditions of Sale. Key steps:

• Find listings: Check BidNest and other auction portals for Cheras properties.
• Due diligence: Conduct a land search at the Land Office to check for caveats, restrictions, and outstanding charges (quit rent, assessment tax, maintenance fees).
• Inspect the property: Try to view the exterior; interior viewing is usually not allowed.
• Attend the auction: You must bring a bank draft for 10% of the reserve price as deposit. If you win, you sign the Conditions of Sale and pay the balance within 90 to 120 days.
• Post-auction: If the property has a strata title, transfer is straightforward. If under a master title, you may need a LACA (Loan Agreement cum Assignment) or Deed of Assignment.

Financing your Cheras auction purchase

You can finance an auction property with a bank loan. However, you must have the 10% deposit ready in cash or bank draft. Government servants may use LPPSA loans, subject to approval. It's wise to get a loan pre-approval before bidding. For properties with title issues, some banks may be hesitant, so consult a lawyer.

Risks and due diligence checklist

• Outstanding dues: Check with the management corporation for unpaid maintenance and sinking fund.
• Occupancy: The property may be occupied by the previous owner or tenants; you may need to apply for vacant possession through the court.
• Condition: Assume the property needs repairs. Budget for renovation.
• Legal restrictions: Some auction properties are subject to restrictions in interest or require state consent for transfer.

Tips for winning bids in Cheras

• Set a maximum bid based on market value, not emotion.
• Attend a few auctions first to understand the rhythm.
• Bring the exact deposit amount as required.
• Consider engaging a property agent like Peter Tan from BidNest, who specialises in KL and Selangor lelong properties, to guide you through the process.

Conclusion

Cheras auction properties offer a viable path to homeownership or investment below market value. With careful research and professional advice, you can navigate the lelong process confidently. Browse BidNest's listings for Cheras and contact Peter Tan to start your auction journey today.