Investment Techniques
How to Start an Auction Safely
An auction is a process of competitive bidding which takes place when multiple buyers are trying to buy a single article. Generally, auctions in Korea are divided into two types: court auctions and public sales by Korea Asset Management Corporation (hereinafter KAMC).
In both types of auction, people can buy articles cheaper than the market price. However, the procedures of the two are different.
Court auctions are held by the civil court in compliance with the procedures set out by the Civil Proceedings Act. The civil court assigns a qualified public appraiser to assess the value of the article for sale at auction. The appraised value then becomes the minimum bid at the first auction. The articles handled by court auction are movable assets and realties seized by the country due to private defaults.
In public sales by KAMC, the procedures of public announcement and bidding are similar to the court auction. However, while court auction is conducted by the civil court to settle private debts, public sales are conducted to sell seized properties or equipment used by the government, public enterprise, or public agencies.
Compared to court auctions, public sales offer a higher probability of buying an article more cheaply.
However, it is difficult to find things you want in public sale.
If you decide to get involved in the auction process, you must first make your goal clear. Novices who enter the world of auctions and public sales tend to aim at making a winning bid.
However, if you don’t clarify your goal before bidding, the article won by a successful bid can turn into a nuisance. If you are aiming to buy a house, you must decide whether you are buying it for resale or to make money from leasing it. Of course, if you are planning to live there, you should make preparations for that, too.
Second, conduct a broad survey on the article. Merely buying an article cheaper than the market price doesn’tguarantee a profit. In case of a house, you must accurately understand nearby commercial spheres. You must not assume that a cheap house will sell quickly. This rinciple is the same with other articles. You must accurately analyze the market trends and customer demand to sell the article for a profit.
Auctions are a trading method used by many people. Thus, it is easy to find online stories on people’sexperience with auctions. There is really no need to look for more information than what is readily available. The agency hosting the auction provides solid information.
For court auctions, you can visit the ‘Homepage of Court Auction Information’ operated by the Korean court to find detailed information about the article as well as auction knowhow. The homepage also provides information on the auction procedures and fees, so it will be good to read the content thoroughly.
‘Onbid,’ a public sales information portal operated by KAMC, also provides detailed information regarding public sales. A manual on how to use Onbid is also open to the public. Onbid even has an application for smartphones. If you are familiar with using smartphones, you can check public sale information more conveniently.
The recent skyrocketing of housing rent prices is making more people dream about owning their own home.
Unlike normal buying and selling, however, auctions offer limited types of houses (or articles), and there might even be unexpected procedures involved in between a successful bid and the actual movein.
Instead of participating in an auction as a sort of fantasy, it is better to approach it with a clear understanding of the characteristics of the auction and bidding methods.
If you have a clear goal and plan, you will be successful in generating
KAMC’s public sale information portal ‘Onbid’: http://www.onbid.co.kr/
