Posted by GL(ON) on July 14, 2002 at 15:39:08:
Did you notice very many others looking at the place? I will return to this later.
You should check up to see if there are any mortgages, liens etc. on the property. It could be that there is a tax lien or something that the owner cannot pay, and it will become the responsibility of the buyer.
There could also be a problem with the title.
Your broker friend should be able to tell you what you need to check on. The point is that even if the house itself is OK there could still be a flaw that drags down the value.
The low price could also be a creative way for a seller to draw interest and get lots of bidders, knowing that someone will bid it up to its market value or higher.
That is why I asked about the turnout. If the auction is legitimate and not many people turn out it could sell at a bargain price.
In any case I’m sure this experience has sparked your interest and increased your knowlege of the ins and outs of real estate investing.
If this one doesn’t pan out, there are lots of other bargains around. They aren’t this obvious, you have to look for them.