Banks are in charge of setting the price of the homes determined by the remaining mortgage amount. In a typical auction, homes sell for a penny over the mortgage value. In cases where the home's value is more than the mortgage balance (which often is the case) investors will not place bids on the home. In this case, banks are sometimes forced to sell off the home at a loss.
State law currently requires that foreclosed homes be sold at public auction. New investors are finding themselves up against experienced investors that have been in the foreclosure market since the previous real estate bust in the early 90's.
From February 2006 to February 2007, Southern California foreclosure filings have quadrupled.
AUCTIONS: Buyer Beware - Be careful at auctions
Have to pay CASH at auction (NO FINANCING)
AS IS condition
Cannot inspect or cancel once you find problems with house
Some buyers find outstanding liens on the house after they purchase the house and they owe more than what they bought it
Problems with title
Problem with building permits
Problem with repairs
Many bank owned properties are listed with a
Realtor: and the buyer has the right to inspections, title insurance, financing, disclosures, etc.
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