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Anyone ever purchased a house this way? I found a nice house near the med school I will be attending in the fall. Is there anything I should be aware of before trying to make this purchase?
Buying a House through an Auction
- Thread starter alphaholic06
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Never done it, but make sure you have a QUALITY home inspector go through that home. My advice is to make sure that the home inspector is ASHI certified and has done 5000+ inspections. If you are not allowed to inspect the house for some reason (either before bidding, or as a part of a contract option period like most contracts (at least in my neck of the woods) have) RUN.
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Jota took the words out of my mouth. I'm going to guess there would be no disclosures which first scares me because you have no idea what type of condition the house is in. And before you even place a bid you'd have to pay for an inspection on the house. Who knows how old the furnace is, the roof, the electrical? Just alot of things could be wrong with it. Many houses on auction also need work done to the property so think of the money that you "think" you might be saving will have to come out of your own pocket to update. Also, think financing. Mortgage companies will require an appraiser to go out and have all repairs completed before closing (which the seller has to pay for most mortgages but you could probably find some creative financing somewhere). So if you are buying with cash you won't have issues, if you are buying with a mortgage, then you will have issues (if repairs are needed).
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Your biggest concern would be liens/back taxes on the property... I assume you are looking at buying a foreclosure property 'on the courthouse steps'. You need to do homework at the courthouse and more or less assure yourself that the title is clean.
When you buy a home the 'normal' way, the seller provides a title policy/insurance which is insurance saying there is NO monies owned on the property, and if anything comes up, the insurance would purchase the home back from you and take care of the issues.
Also, you would either need cash for the purchase or have a private backer. I dont think any 'lender' / mortgage company would loan money on an auction property... unless you are VERY stout and have done MUCH business with them in the past.
Good luck.
When you buy a home the 'normal' way, the seller provides a title policy/insurance which is insurance saying there is NO monies owned on the property, and if anything comes up, the insurance would purchase the home back from you and take care of the issues.
Also, you would either need cash for the purchase or have a private backer. I dont think any 'lender' / mortgage company would loan money on an auction property... unless you are VERY stout and have done MUCH business with them in the past.
Good luck.
