Hello, this is HomoEfficiens.
Currently, I'm engaged in both auctions and public auctions, in the process of eviction and transfer of ownership for several properties that I have won.
The main goal of both auctions and public auctions is to purchase properties at prices lower than the market value. However, since these two procedures have different names, they also have differences, which we will explore.
As my main interest is in real estate, I will focus on real estate in this explanation. Thank you for your understanding.
What is an Auctions in Korea?
An auction is a process managed by the court when a debtor cannot repay their debts. Simply put, it is a way for the court to sell the debtor's property to repay the creditors.
The auction is held in the court, and the highest bidder among the participants wins the property.
Key Features
- Court-Managed: Auctions are conducted by the local courts where the property is located.
- Creditor's Request: The auction process starts when the creditor, who hasn't received their payment, requests it.
- Competitive Bidding: The highest bidder wins the property.
What is a Public Auction in Korea?
A public auction is a process where a public institution sells real estate. The Korea Asset Management Corporation (KAMCO) is a common example. Public auctions are usually held when someone fails to pay taxes or debts to public institutions (like national insurance).
Public auctions, like regular auctions, are also conducted through bidding, and the highest bidder wins the property.
Key Features
- Managed by Public Institutions: Public auctions due to unpaid taxes are managed by KAMCO.
- Tax Delinquency: They occur mainly when someone fails to pay taxes or debts to public institutions.
- Competitive Bidding: The highest bidder wins the property.
Similarities and Differences Between Auctions and Public Auctions
Both auctions and public auctions are similar in that they involve competitive bidding, where the highest bidder wins the property. This often allows buyers to purchase properties below market value, making it an attractive method for real estate investors. However, there are significant differences:
| Category | Auctions | Public Auctions |
| Managing Body | Court | Public Institutions (KAMCO) |
| Cause | Private debt default | Tax delinquency |
| Procedure | Conducted according to court rules | Conducted according to public auction rules |
| Eviction | Easier, with established procedures | Can be easier, but lacks formal eviction procedures |
Differences in Eviction
Eviction refers to the process of taking possession of the property after winning it, and it's an important step in both auctions and public auctions, but there are differences.
- Auction: The court can issue an eviction order to remove the occupants.
- Public Auction: There is no eviction order system since the asset management corporation cannot enforce it. If eviction is not resolved amicably, legal action might be necessary.
Personal Opinion and Experience on Eviction
Please don't feel too burdened by the eviction process. It is clear that the winner must legally take possession of the property, and it's essentially a step to be resolved between people. Based on my experience with several properties through auctions and public auctions, it's rare to escalate to lawsuits. Although I was initially nervous, most cases were resolved smoothly through conversation and agreement.
I hope this explanation helps you understand the differences between auctions and public auctions. If you have any more questions, feel free to ask!
