Online apartment auction makes transparency

HANGZHOU - An apartment seized in a lawsuit in east China's Zhejiang Province was sold on Tuesday in the country's first online housing auction.

The auction of the 35.12-square-meter apartment in Hangzhou, capital of Zhejiang Province, by the Xiaoshan District People's Court concluded with a final price of 356,000 yuan (57,090 U.S. dollars) at 10:20 a.m. on Taobao.com, China's largest online consumer shopping platform.

Wang Xiaoyan, a woman who won the auction, said she bought the apartment for investment.

Wang, a Xiaoshan native, said she learned about the auction from Internet media reports.

"After seeing photos and the profile of the house and learning market information, such as price and rent, from real estate agents, I believe it is a good deal," Wang said.

Online bidding opened at 10 a.m. on Monday, and 33 bids were made before the auction closed, said Wu Jian, a judge with the court, adding that 11 people have visited the apartment since the auction information was released online in early November.

An apartment seized by another court also in Zhejiang will be auctioned online on December 3, Taobao.com said.

Unlike ordinary online auctions, the identities of bidders in judicial auctions would be verified in advance. Bidders need to submit deposits under their real names through Alipay, an online payment service for Taobao consumers.

Courts in Zhejiang have previously auctioned seized properties, mostly automobiles, through Taobao.com.

On July 11, a BMW 730 sedan was sold to a bidder on Taobao after being seized in a lawsuit by the Beilun District People's Court in Ningbo. It marked the country's first judicial auction to take place on a third-party commercial website without an auction agent.

As of November 1, 22 items had been auctioned on the website in this way.

"Unlike vehicles, which attract buyers nationwide because they can be moved, real estate would be mainly favored by local people, " Wu said.

He said housing purchase restriction would not cover purchases of apartments involved in lawsuits.

Holding auctions for lawsuit-related properties was a trial move to promote transparency and curb corruption during the auction process, said Rao Wenjun, head of the judicial authentication department of the Zhejiang Provincial Higher People's Court.

Chinese courts' traditional handling of assets seized in lawsuits has been criticized as lacking in transparency, with transaction prices far below the actual value of items being auctioned, as court workers and auction agents are often suspected of making under-the-table deals to rig the auctions in their favor.

Taking this into consideration, Zhejiang's court system initiated an online judicial auction campaign to sell properties seized by courts in the province.

"Auctioning over the Internet is more direct and transparent, which is another move to curb corruption," Rao said.

In addition, buyers of assets seized in lawsuits have to pay 0.2 percent to 5 percent of the transaction price to the auction house as a commission fee, but there are no commission fees on Taobao transactions.

The absence of commission fees has helped buyers save a lot of money and maximized the interests of the parties involved, Rao said.