Realization of collateral as a banking product is a rather attractive procedure for potential buyers.
Which is better to purchase: housing at auction or owned by a bank? What is the implementation process? collateral property of banks, What objects can be seen in the catalog? These and other questions will be answered by our article.
In Russian legislation, there are the following options for the sale of objects pledged by the bank.
Option one: sale of collateral with the consent of the debtor
Objects pledged by the bank are sold before the loan arrears are formed, and only with the consent of the borrower. In this situation, the bank or other lending institution, having received the consent of the debtor, publishes public information about the property for sale on the website or through a specialized agency. The final right to choose such an agency is granted to the borrower.
The Bank controls the implementation period and price. The owner of the collateral cannot, in this case, count on a discount. Initial sale of banks' collateral takes place at market prices, sometimes 10-15% more expensive, as interested parties want to sell the property more expensive.
Option Two: Sale of Property by a Bailiff
This takes place through a public bidding process and through enforcement proceedings. The Bank, not being the owner, does not have the right to publish information on the sale of property without the consent of the debtor. The bailiff is the organizer of the sale, its actions are regulated by the Laws of the Russian Federation “On Enforcement Proceedings” and “On Bailiffs”.
An application is submitted and an advance payment is made to participate in the auction. Information on participants, objects (lots), the date of bidding and prices is published in the regional media, on the website of the Federal Property Management Agency, as well as on the website of the Federal Bailiff Service.
At the first auction, the bank provides an assessment of real estate or other property, this price is the starting price. In a controversial issue, an appraisal examination is carried out. In most cases, the initial value of a lot is the market price. If no buyer was found at the first auction for the object, repeated ones are organized, where the price is reduced by 15%.
The disadvantage of this procedure is the problematic nature of some real estate objects when, for example, a borrower, minor children, and other persons are registered in apartments. The risk of eviction in this case lies with the buyer. The sale of collateral, and especially housing, is much safer when it is sold either pre-trial or after it became the property of the bank.
Option three: transfer of collateral property to the bank
If the object could not be sold, it is transferred to the bank as repayment. This option is inconvenient for credit institutions, since they are forced to take property on a balance sheet, create reserves, and again return to sale.
Some banks provide favorable loans for the purchase of a collateral apartment, house, or other property. They differ from standard lending programs with a reduced interest rate.
Realization of property pledged to VTB
This bank offers a convenient online program “Showcase of collateral property”, where everyone can get acquainted with the objects put up for auction. What does the bank offer for sale?
- commercial and residential real estate;
- commercial and passenger transport;
- equipment (printing, conveyors, machines for the production of shoes);
- sea, river and aircraft.
And if you don’t have enough money, but you really want to buy the right object at VTB bank trading? The sale of collateral property by the bank can occur by providing a loan to both individuals and legal entities under the following conditions:
- interest rate is 12%;
- down payment amount - 20% of the property value;
- lending for a period of 30 years for individuals and 10 years for legal entities;
- no commission in case of early repayment.
Realization of property by Sberbank
A large area for the sale of collateral is presented in Sberbank. Here you can find not only real estate or cars, but also:
- whole building sites;
- plants;
- full cycle production equipment;
- production bases;
- integral property complexes;
- multi-apartment residential buildings;
- warehouses;
- administrative buildings;
- property share in a particular business;
- securities and much more.
The sale of collateral (Sberbank) takes place almost weekly.
Credit organizations in financial circles are called “involuntary sellers,” because posting ads, searching for buyers, and distribution channels is not a bank type of activity. Moreover, announcements on the sale of collateral by the bank may be placed on the official websites of the banks themselves along with information on lending. This, of course, is anti-advertising and will not add optimism to the potential borrower.
To avoid such situations, there are specialized Internet resources where a complete catalog of objects and information on how the sale of collateral is carried out is collected.
