| Some people see the benefits of something they | | | | typically try to make a house look as fresh and pristine |
| want and are immediately ready to rush into it without | | | | as possible before beginning an auction. (It could be like |
| considering possible negative consequences. Hopefully, | | | | polishing shoes that don't have soles.) |
| that's not you, as rushed decisions are rarely wise - | | | | Expect to do a lot of guessing, but also take the time |
| and can be very costly. | | | | to find out as much as you can about the house from |
| Buying a foreclosed home at an auction is one of | | | | other sources besides your visual take on the property |
| those decisions you should never rush into. And among | | | | itself. Research is always critical, so do your |
| the various means of acquiring a foreclosed home, | | | | homework (due diligence) before spending. |
| auctions carry the most risk. | | | | An auction's starting price covers the mortgage and |
| Weigh Both Sides of the Equation | | | | any other fees owed against the house, but it doesn't |
| Of course on the up side, risk represents the possibility | | | | always include tax costs or the auctioneer's fees. |
| of greater profits, and that's definitely the case with | | | | Although they won't be nearly as much as the home |
| foreclosed home auctions, where you can get in the | | | | itself, their addition could mean turning something that |
| neighborhood of 30-40 percent off the market price - | | | | initially appeared to be a good deal into an |
| sometimes more. However, before you pull off a feat | | | | averaged-priced transaction. |
| like that, you'll need to educate yourself on the | | | | Worries Extend Beyond the Auction |
| process. | | | | After the auction, you have to deal with the fact that |
| You would hate to find yourself on the losing end, | | | | the former owner has a certain amount of time to |
| which is exactly where you're headed if you get the | | | | garner the money to pay off the mortgage and any |
| bad end of an auction deal. Think long, hard, and | | | | other debts, and then potentially come back to |
| logically before you make any moves. | | | | repurchase his/her house - with appropriate proof of |
| Various Negatives | | | | course. |
| One, there's the risk, already referenced above. Also, | | | | While it is unlikely the person will be able to come up |
| you won't have the same flexibility that you normally | | | | with the money within the redemption period, it's still |
| would when searching for a house. You buy auctioned | | | | something you have to contend with when you |
| strictly "as is." | | | | purchase a foreclosed home from an auction. There's |
| You might think, "Okay, how bad can it get?" The | | | | little you can do to stop this process should it occur. |
| important thing is that most any house being auctioned | | | | It's the unexpected that can sour an auction "deal," |
| will have some type of damage. Not only have such | | | | usually by causing it to become no deal at all. Do your |
| homes been formerly in, but the previous occupants | | | | research and expect to face challenges. If you want |
| may even trash some out of anger, frustration, or | | | | to buy a foreclosed house at an auction and are willing |
| resentment. | | | | to assume the risks, you can do very well. Just |
| Don't be fooled by the outer shell. The seller will | | | | approach it cautiously. |