Monday, November 12, 2007 11:55 AM
What?s the deal with foreclosures? Is buying a home at auction a good idea or is it too good to be true?
If a homeowner runs out of money, someone always comes running, either the bank holding the mortgage or the local tax assessor wanting payment. Somebody else?s bad news could be your bargain if you know how to work the system. And there are plenty of foreclosure businesses out that there purport to help you through the process if you?re a novice.
But buyer beware: Purchasing a house this way is so hard that usually only real estate professionals make money on the deals. The complicated part is that after a bank or the government goes through legal proceedings to take over the deed to a house, the foreclosed property goes up for auction and these auctions have rules. For one thing, you have to put down the full purchase price in cash on the spot, and you may not be able to inspect what you?re buying. If you don?t have the stomach for all of that, you can try to find out information about properties before they go through the formal foreclosure proceedings. Then you can try to negotiate a sale while the owner still has rights to the place and work out a deal to your advantage.