real estate auctions

[forgotten_aria]

Does anyone know anything about real estate auctions? Are they good places to get deals. It seems like a really scary concept to me, especially since you have to get the home inspected BEFORE bidding, which costs money.

Comments

[twitch124.livejournal.com]

Historically in the US, they're a last resort for bad houses. In other countries like Australia, they're common for normal houses.

[mama-pipa.livejournal.com]

What I have been told by my RE Agent is that often the bank who owns the property will have a secret bidder to make sure they get enough money on the auction for a property. If you go into an auction, I would check to see what the house was listed for before the auction, and review the history of pricing changes on that listing.

[forgotten-aria.livejournal.com]

This is a bank foreclosure house.

[gmpe.livejournal.com]

What is true for most "normal" house sales doesn't really apply for bank foreclosure sales. Make sure you understand the caveats before making an offer on one. (You often have to use their P&S, and they may apply other conditions, etc.) Some people, like those who flip houses, may have enough experience and/or training to be able to do their own inspection. My father-in-law did a self-inspection on their current house, for example. There is no rule that you have to get an inspection, although I certainly wouldn't want to buy a house without one (or the unofficial equivalent.)

[binkbink.livejournal.com]

Also be careful it doesn't come burdened with liens, especially back taxes, and check out how much it is going to cost to get the power and gas back on, did it go through a winter without being winterized (broken pipes maybe), and how much an occupancy certificate will cost if the utilities have been off.

[honeyartichoke.livejournal.com]

I find the auctions scary - you have to make the decision very fast with less information. Also with foreclosures, the bank often requires you to sign away any rights to back out of the transaction and make a commitment to buy regardless of later issues with the house or title. This is even more scary considering that people sometimes sabotage the property that was taken from them, or at the least the house might have been unoccupied and not maintained for a time - which can be worrisome with our winter climate.

[binkbink.livejournal.com]

I forgot that. Yes, a lot of the repos have been trashed by the departing homeowners. It is sad that the attitude exists, but yes, it is a very real caveat for an auction house.
In addition, some who have bought auction houses intending to live in them (rather than flip them), have been harassed by the dispossessed previous owners, so to the point of being in fear for their lives.
Even though I am considering it myself (only a little), I recommend against looking at auction houses, despite their apparent bargains.

[sauergeek.livejournal.com]

Another potential (but rare) gotcha for foreclosure sales is that the previous owner has time -- I believe it's a year in Massachusetts -- to pay off the bank and reclaim the house. This can happen even if there's a buyer resident.