We have all seen the advertisements for “Home Auctions” lately. But before you go out and think you are getting a great deal, think again. What these people don’t tell you is that you are actually paying off the debt that the previous home owner owed on the foreclosed home. Yes; the bank will get their money one way or the other. And that low rate they try to finance you with? Look at it carefully before you sign the papers.
Example:1
Ms. Smith’s home goes into foreclosure. The bank auctions her home. Making you believe that you will get a great deal. But what you are paying is what she owed on the house in the first place.
Ms. Smith owed $385.000 on her home and the bank says the starting bid is $50.000. But what they don’t tell you is that the bid will go until the bank gets their $385.000. If they don’t get that bid then the home does not sell. Sound like a scam? It is.
What you need to know also is that they claim that the house is worth $465.000. And in a few months you have built capital in the property. But if you don’t do your homework you are going to get taking. Go to zillow.com see how much the property is really worth. Today that $385.000 just might be at $220.000 value. Plus fixing up the home again, and back taxes or liens. The auctions claim they pay back taxes and liens, but some do not. Is it really worth it?
Example:2
I got one of those book about three weeks ago. They had a property that was on the next street to where I closely live. Now the picture in the book looked great. It said; 4 bedrooms 2 baths. A big lot. So I decided to take a look at it. We must of drove in circles for fifteen minutes before we came to this so called property.
We got out of the car to make sure it was the right house and it was. But what was said in the book was not what we were looking at.
The so called house was an old ran down warehouse or old store of some kind? There was no front yard. You walk less then a foot to the front door from the side walk. There was no front yard. A big lot? Where? The neighbors back door; you could touch it if you leaned forward? Even the picture was wrong from the book?
I got back to my home and called the one eight hundred number that was in this auction book. The woman came up with excuses when I told her what we saw.
Then she said; “well it could be a 4 bedroom 2 bath”?
But what I saw was a 1930’s old building that was barley standing and for $350.000 it was not even worth $150.000.
So buyer beware!
Know what you are getting into.
Go see these so called properties in these auction books first.
Check the local city for back taxes and liens on the property.
From what I can see, everyone is still trying to make a fast buck.
After everything that has happened and still happening today.
Do your research.