An option many home buyers look to when searching for a deal are the home auctions brought to you right from your television set known as the televise home auctions. Televised auctions can really peak a person’s interest, for it is a combination of pure entertainment plus business. Something so alluring can definitely have its initial appeal, especially when you see some of the prices these auction bidders are scoring.
Now with every good television marketing campaign, they want to make good television, so be aware that you are usually only seeing the deals that go through successfully, or at least at the time the person obtains the win. What we don’t see is when the winning bidder gets to see their winning property in person for the first time. More times than not, it’s then that they realize their “deal” has turned into a nightmare. They may find out their new house is built on a crumbling foundation, or the septic system is aged & failing and a brand new one is needed; that’ll get you a nice $30k bill.
Sometimes they find out that the location that was described in the auction was less than accurate, placing them way out of a more appealing area of a neighborhood than was initially described. Having more options for real estate purchase is always welcome but at what percentage of risk are you really willing to take?
In one given episode of a recent live TV auction, a property being featured was a wooden lot almost half an acre and located in an almost deserted neighborhood with unpaved roads. The video was shown giving the bidders an idea of the property’s location and other information of the property. The deal was essentially a steal for a bidder especially given the $50 annual taxes. The property closed approximately 50% less than its value with the winning bidder beaming like he just won the lottery.
However, the fact that this bidder only had an idea where the property was, not an exact location, the allure that he received a “deal” upfront looked good, but in all reality who was the one deeming what the property was worth in the first place; the auctioneer? Did anyone do a perc test? Is the property on a paper street? Looks can be deceiving and especially on television. If you don't have a physical inspection you could be buying hidden damage and Google earth/street view is also chronically off, so you are never really sure you are looking at the right end of the block if you don't drive there yourself.
It doesn’t take a rocket scientist to realize that you are walking a dangerous path with televised property auctions. Buyer as usual and especially in this case, beware and proceed with caution.
Before joining an auction, arm yourself with knowledge and learn more about the Risks Involved in Buying at Court Auction.