Sold! Like it or not you just bought it. Auctions can be a good source for finding bargain properties but they do have their drawbacks. First, let's cover some basics. The St Tammany Parish Sheriff's office holds auctions on Wednesdays in the courthouse. The seized properties being auctioned are published in the Farmer newspaper. Buyers must pay 10% of the closing price at the auction and the remainder within 30 days. Private auctions are conducted much the same way except that the expenses are sometimes higher and the owner usually has the right of refusal. Now for the down side. Auctioned properties are sold as is, with no guaranties and no disclosures. So why does that matter? Properties sold through a broker, such as Keller Williams, must have state mandated disclosures. This applies to homes, vacant land, duplexes, etc. These disclosures are completed by the seller and must include all know defects. Let me give you an example. I recently attended an auction at which a property that I had shown a client was up for auction. The property looked nice from the outside but had some problems once you looked a little closer. The buyer got a good buy. But was he ready for the repairs that had to be made? Our estimate was that the property required about $20,000 in repairs, or about 11% of it's value.
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