Buying home from major auction?

[twuoo]

We have a major auction coming up soon of homes that are foreclosed on etc.

Has anyone had experience or known of someone who's bought a home though one of these aution houses?

Seems like a good deal if you "win."

Here's what I'm looking at: http://www.ushomeauction.com/calendar.php

I'm going to check out a house today. I'm hopeful it won't be a dump...lol.

[StartingOver08]

This is my experience with auctions: natually the 'starting price' is a come on type price, like $1000. The price is then bid up until the highest bidder 'wins'. What you win is not the property, but the chance to get your contract presented to the seller/bank. The seller/bank can accept your 'winning bid' or not. They will not accept it if it is not high enough. In fact, my last discussions with an large auctioneering company said approx 60% of the winning bids are turned down by the seller/bank (these were foreclosures/bank REO properties).

Remember, as a buyer you usually have to pay a buyers premium that varies among aution companies. Standard buyer's premiums range from 5% to 10% of the winning bid amount. The buyer's premium is added to the winning bid.

You must read the terms and conditions of the aution before you bid to make sure you can comply. Typically the closing must occur within 30 days of bid acceptance. Bids are not subject to financing (cash purchase). Make sure the seller/bank has to deliver clear title to you. Also find out if past taxes are paid or if that is your responsiblity as the new buyer. Of course there is more, read the contract before you ever place a bid. Take it to an attorney to understand what you are bidding on - because you must sign the auction company's form....not the 'regular' real estate contract (if there is such a thing ).

Good luck.

[AngelinaCatHub]

Twuoo, have you considered purchasing through tax deeds? Much cheaper but usually you must have cash in hand on the steps of the Courthouse. Look over potential houses as you could get a wreck. You can find delinquent taxes on your County’s Tax Assessors web page. ‘Hub

[twuoo]

I went to go look at the home. The real estate agent was really helpful. He told me that even if I'm a high bidder, the bank might not sell the home if it doesn't meet their minimum. But they don't tell you what the minimum is.

So it was a good learning experience. And I got to meet a potential agent. It wasn't a lost cause.

[StartingOver08]

Hub, just a note for others that might be reading this thread - be careful when purchasing property through tax deeds. In our area, S. Fl., if you purchase that way YOU DO NOT GET CLEAR TITLE. What that means is that the buyer is responsible for paying ALL liens and encumberances on the property, ...in addition to the tax lien amount. I do not know about other areas - but here you would actually have to go through a quiet title process (long and expensive) in order to clear the title. YMMV.