Buying Homes At Foreclosure Auction

By Jan Bergemann 
President, Cyber Citizens For Justice, Inc.

Published September 25, 2012


The old saying “What’s too good to be true just isn’t true” especially fits for online foreclosure auctions on homes where the foreclosure was officially caused by unpaid HOA/Condo dues. Don’t forget, that doesn’t mean there is no mortgage foreclosure in the making, it just means that the HOA/Condo was faster than the bank.


More and more people complain that they are being misled by government websites claiming that homes were auctioned off for “peanuts.” Even if there is a disclaimer on the website saying that a buyer should do his/her own research on the property, most potential buyers think they should take a look at the property and check what shape the house is in. But since there is no reference to possible mortgages or other financial demands not covered by the auction price, potential buyers with no prior auction experience buy the property at auction and pay the demanded auction price. Then they are confronted with further outrageous money demands from mortgage lenders and/or master associations that turn the “great bargain” into really bad business, causing the loss of the money the “new deeded owners” paid at auction. The next foreclosure is already in the making.


These foreclosure auctions are not good for inexperienced folks just trying to buy a home and who just can’t withstand these tempting offers. These auctions are even tricky for experienced investors, but regular folks like you and I should keep our hands off these auctions. Buying a home at these auctions may not only cause serious headaches, but makes you quickly lose all the money paid at auction, when the bank (first mortgage holder) quickly forecloses on this home.


Don’t forget, the original owners didn’t let the home go for  just a few thousand dollars they owed to the community association. There is a lot more behind this foreclosure. Most likely the house is totally underwater, meaning that the mortgage is much higher than the actual value of the home.


Believe me, even with the property values in Florida being totally down the drain, buying a family home for $8,000 – or even $18,000 – just isn’t possible. Don’t believe it when the website tells you that you can buy a home at auction for some small amount like $8,000 or $18,000.


So, always remember: “What looks too good to be true most probably isn’t true!”

Please read as well:
Beware that great deal at foreclosure auction