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Risk and reward when buying foreclosed houses

For people looking for a new home, the increase in foreclosures could mean a good deal. Real estate broker Bob McCorkle said if you’re willing to take on the clean-up, the best deals can be found at courthouse foreclosure auctions. However, before you buy, make sure you know what you could be getting yourself into as foreclosed homes can have serious problems. At the auctions you buy the property as is. “You have no opportunity to inspect the house, see it in advance, and no ramifications if you discover something is wrong. You pretty much buy whatever it is,” McCorkle explained. Houses often go into foreclosure because the previous owner was unable to sell it, which sometimes that can mean structure problems or damages within the home. While you might be able to get a deal, buying the property at auction can also be risky.

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Please read if thinking about bidding on one of these properties

Bob left out the most important consideration when buying a foreclosure home listed for auction sale with the county. Sure not being able to inspect the property is a very important facet of buying a foreclosure, but even more importantly is knowing exactly what you are buying. The properties being auctioned by the county do not have clear title. When bidding $35,000 on a property at one of these auctions not only are bidding on the actual property, but you may also be bidding on the right to own a $100k 2nd mortgage lien, $20k in personal tax liens, and $5k in property tax liens. DO NOT BID ON ONE OF THESE AUCTION PROPERTIES BEFORE TRYING TO DETERMINE WHAT OTHER LIENS ARE TIED TO THE PROPERTY AND WHAT THE LINEAGE OF THE LIENs ARE TO SEE WHAT WOULD TRANSFER WITH THE TITLE AND WHAT WON'T. If this does not make sense to you hire an attorney to do a title search prior to bidding.

bad mojo

you will also be inheriting very bad mojo taking on someone's house like that. most of these people who have been foreclosed on can not refinance on a 12-14% interest mortgage and had no alternative. these houses are cursed. buyer beware!