Estimation of the Cost of Renovation of Townhouses and Detached Houses Obtained from the Property Auctions Department in Samutprakan

Abstract

A House is a high value asset ; therefore, it requires preparation in terms of financial planning. Due to the current housing situation, the purchasing power of consumers is still fragile due to the economic downturn and the impact of the COVID-19 disease, resulting in more people being interested in second-hand houses for reasons of lower prices. In some locations with high demand, there may not be space for new projects. At present, buying a second-hand house can be done through four channels: 1) Purchase through the owner 2) Purchase through a broker 3) Purchase through a financial institution and 4) Purchase through the Legal Execution Department. Through the Department of Legal Execution, the highlight is that the auction price of real estate is usually lower than the market price by about 20% to 60%. Because the property that comes from the Legal Execution Department will have an old condition from the seizure of the property to be sold by auction, it will cause different problems. If the bidder does not understand the cost of renovation well enough, it may result in the property being purchased at a higher price. The researcher is therefore interested in studying the cost of renovation of the property obtained from the Legal Execution Department as a guideline for interested consumers to assess the cost of renovation of the auctioned property. The samples were townhouses and detached houses in Samut Prakan Province obtained from property auctions through the Legal Execution Department.

The study found that there are two periods of expenditures that consumers should pay attention to when auctioning property from the Legal Execution Department, namely the period before the auction and the period after the auction. The pre-auction costs will be incurred by statutory practices and procedures, and the post-auction period will be repaired. Which can be divided into 3 categories of repair work: 1. The architecture category has the highest cost of renovation, representing 89.26 percent. 2. The system category has the cost of renovation, representing 6.41 percent. and 3. Other categories of work have is a cost of renovation, representing 4.33 percent.

In addition, the study also found properties that increase the cost of renovation, such as: 1. Properties sold according to the copy of the title deed 2. Property that is sold with a mortgage 3. Properties that still have former residents who are expected to take a long time to move out or may have to file for eviction. and 4. Property whose structure is damaged, collapsed, or clearly tilted. Such types of assets should be avoided, as they increase time and cost.