What are the dangers of buying a foreclosed house on eBay, sight unseen? I see some nice ones go for cheap!
http://cgi.ebay.com/NO-RESERVE-VALUED-ZILLOW-COM-53-000-SAGINAW-MI-/290439239834?cmd=ViewItem&pt=Residential&hash=item439f87189a#ht_1391wt_1032
While searching for an image for this question, I ran across this: http://webcache.googleusercontent.com/search?q=cache:SiBrvwpb4EYJ:www.freerepublic.com/focus/f-news/2095647/posts+foreclosure+eBay+Zillow+Saginaw&cd=3&hl=en&ct=clnk&gl=us
where another house in Saginaw MI sold for $1.75 on eBay! Less than a McDonald's value meal!
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M$7 Answers
If I am buying a house sight unseen I already have a buyer for the house in mind. I also have "feelers" they are folks that help me find good deals to buy around the country. I do not usually see these people but I know them and they work for me at a % of the sale of the property they have found or ..inspected for me. Even a quick phone call to a local referenced home inspector and 300 dollars will help out immensely.
That house for example it looks like a great deal on the surface at $3254.00. That is cheap enough to make it worth it if the property is lien, debt, tax, free and it has a reasonable utility infrastructure, plumbing, heating, electricity etc. A call and or letter to city hall would handle the legal end and a bunch of phone calls to all of the contractors in the area would likely get the condition of the infrastructure.. someone has tried to fix it before.. or they have at least had the cost of fixing it estimated by someone.
For that money I would buy and sell that house in one day but if I did not have a needy buyer ready to move I would not buy the property. Buying a house sight unseen that you intend to live in is crazy and could be the most costly thing you have ever done.
There is a reason the house is that cheap and it is not foreclosure. The house my have been a foreclosure but the catch will be in the Why? People will usually take care of their living situation first so why did this homeowner not take care of theirs?.. It could be that the house was foreclosed on because the owner did not have the money to fix it and felt that with the loss of their job or the drop in household income made the fixing of the property impossible or not worth the price... could be septic, mold, plumbing.. something costly kept this homeowner from paying for their house... or wanting to pay for their house, there could have been a zoning change in the city and a toxic waste processing plant is going in behind the yard... so yes the house is in foreclosure and that is the front reason it is for sale but the "Why is it in foreclosure?" question is the key to this sale.
~~> "Seller says it was purchased foreclosed, and make no warranty as to its condition because they don't know either! " <~~ crock of sh*t.. they know and will not tell because if they did you would not buy.
That is a lie and they also are doing what I do for a living and they have purchased the home for a super discount price. Likely they bought the house for 1000.00 and marked it up to 3254.00 to make some quick "I NEED the heck out of this deal!!" dough. If that is the case then they also bought.. or inherited... the house without knowing all of the information and then discovered that "Why" that is the very big deal here... a very expensive to fix to livable big deal here.
Some digging into the personal life of the previous owner would be necessary here to insure a good deal.
personal experience
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M$
"A $1,000 non refundable earnest money deposit is due within 24 hours after the auction. We will accept PayPal, wire transfer or cashiers checks/money orders."
Now...if you want to buy it and the seller makes a turn over on you and is a scam he might ask for a wire transfer. If you are naive, you will pay that $1.000. If he is honest he will accept Paypal.
Since he posted the phone number...the ad is ok.
I saw better auctions on eBay, however, this looks OK as long as you can speak with the owner.
Be careful at the vocabulary, and anything suspicious.
NEVER SEND MONEY THROUGH WESTERN UNION OR MONEY GRAM! not even $50
These are the main dangers. To loose your money. The rest can be solved by a carpenter.
let's say I come from a top 5 eBay fraud country! and a top 2 city!:)
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M$
Good point!
You're right Vlad.. earnest money in my experience is paid to an independent escrow agent like a title company or an attorney and I have 100% of the time paid earnest money via personal/business check.. never once have I paid in a money order/cashiers check/PayPal/wire transfer.
Earnest money is put towards the overall cost of the property and is held in escrow until the deal is done and all of the documents are signed.
Although ... If I DID have money ... I would buy property and just hold onto it. The economy will eventually bounce back and in 10 years I bet the land would be worth 3, 4, or even 5 times as much!
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M$
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
Yeah, they could be drilling for oil next door or using hydraulic fracturing (fracking) which for one couple, ruined their drinking water supply and they sued:
http://cbs11tv.com/consumer/Chesapeake.Energy.Lawsuit.2.1760509.html
Didn't see any oil rigs though, ha ha.
Please don't do it. I've got several years of experience buying/flipping and renting homes. Always, always, always walk through the home and inspect it in addition to looking at the sellers disclosure form. It's easy to get caught up in the emotions of purchasing a home; even for investment purposes. Don't potentially throw away your hard earned cash.
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M$You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
Such as the house not being up to building code, or even something worse like radon or asbestos .
I would NEVER purchase a home without seeing it first and having a inspector inspect the home thoroughly.
Be careful man!
Experience.
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M$
That would have been the right thing to do.
Two more fun possibilities . . .
A few other things to consider. Without knowing anything about the property you could be buying a haunted house, even if you don't believe in ghosts potential buyers/renters might.
A squatter could be in residence setting up a uncomfortable situation of "evicting" people who have illegally taken up residence.
Check out this sad story that aired on NPR:
http://www.npr.org/templates/story/story.php?storyId=128078864&sc=emaf
This family's $300,000 house got foreclosed upon sold on the courthouse steps for $3500 while the husband was serving in Iraq for not paying Homeowner Association Dues for two months! The house was already completely paid for.
http://www.npr.org/templates/story/story.php?storyId=128078864
That is one sad sad story of loss.
Foreclosure on a lien placed there by a HOA for past due fees should be illegal.
HOAs have the right to place liens against delinquent residents in their community but for the HOA to act so quickly in foreclosing on this lien leads me to believe there is more to the story..
Seems that woman lapsed on as little as 500 dollars and then add to that the 3000 in legal fees accrued by the HOA in placing the lien on the house .. and poof! house is gone. The new homeowner who turned the full years salary on that flipped property's sale alone has a pocket full of bad karma cash.
They should have and could have sold it back to the solider and his family unless there were other infractions with that family and the HOA that had occurred in the past preventing this family from living there due to these violations.