On March 16th over 2,000 people gathered at the Los Angeles Convention Center to take part in the auction of 119 homes by the National Home Auction Corporation. The prospective buyers ranged from first time home buyers to real estate investors and vacation home seekers. Over 2,000 bids were made during the day long blow out sale. The NHA claimed that it was one of their most successful sales but did not comment on how many of the homes were actually sold that day.
Personally, I enjoy auctions. I love the excitement and the spirit of an auction. But I would be hard pressed to purchase a home at an auction. No matter how great the sale price it is still an extremely large expenditure and if I am going to commit to spending that amount of money I have some rules.
My first rule is that I want to know exactly what I am purchasing. In the case of most home foreclosures you don't have the right to actually inspect the property. However when you buy REO property you are given ample opportunity to inspect the property before making an offer. This just makes more sense to me.
My second rule for large expenditures is that I want to know what the cost of the item is. When you buy foreclosures at auction it is your responsibility to have performed due diligence in order be aware of all of the outstanding taxes and liens on the property. With most REO properties all previous taxes and liens are waived, and in any case the lender is legally bound to disclose all pertinent information. I prefer knowing what I'm getting into.
I love auctions, to buy paintings, antiques and collectibles. For real estate I vastly prefer purchasing REO and the more traditional sales methods.
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