what do they do with the owner if they are still living in the house ,is buying home at auction offers you best price,thanks
The major risks are:
- No title insurance and sales are subject to existing liens and encumbrances. So, for example, if you buy a second you will still owe the first, and past due property taxes.
2.No inspections. Unless the house is vacant or the current owner will let you in (highly doubtful) there is no ability to inspect the property before you buy.
- Eviction issues after you buy. Though I’ve never heard of someone who bought a property at auction losing an unlawful detainer case (eviction), they can occaisionally be a fight. Also since anyone can sue you for anything you may occaisionally find yourself in a lawsuit with the prior owner claiming the sale was no good. Again these things usually work themselves out, but it ties up your money for a while and you will incur legal expenses which may not be recovered.
I basically recommend buying at auction to those with the time and dedication to do it professionally, and the money to suffer some temporary losses. If you can buy ten houses a year and you make $50k on 9 and lose $50k on 1, you still made $400k. If you can only buy one and it happens to be the $50k loss it really hurts. Also note that you are more likely to make a mistake when you are getting started, so losses can be “front-loaded” - which really requires determination to work through.
If I were to buy a home at auction, how could I tell the loan position of the party that’s doing the foreclosing? ? Thank you!
You either have to research it yourself, or hire someone like a title company or abstractor to do it for you. We estimate loan postion as part of our service, but it should not be relied upon for a purchase at auction - it is only intended as a guide.