In the latest articles written, we discussed quite a few things actually regarding auctions taking place online and auctions that take place offline. There are many people that would rather only attend an offline event, than sit over a computer screen and wish that they get their dream item at a very good price.
Today we are going to talk about bids on foreclosed homes and auctioning such properties. Before I get into it, I just wanted to make some discussion on the moral part of it. We obviously know that those homes are up for grabs, because someone failed to pay their mortgage and thus the bank took it. So I am hoping to write things that aren’t opinionated but are rather offering food for thought.
What do you think? Is it okay to buy a foreclosed home when you know someone was kicked out of it?
Here’s my take on this: It is the home of someone who lost it, definitely! It is a bad thing for people to be in such financial distress to not be able to have a home of their own. According to the rules of the game though, the home doesn’t belong to that person or family until it’s paid off. So officially, the bank is really the owner of the home, and is just letting you live in there until the loan amount has been paid off or been forgiven. So many times we say: the banks kicked them out of their homes. No they didn’t: the banks kicked them out of the bank’s property for lack of sufficient funds.
It is very much like renting a place. If you can’t make the monthly rents then the landlord is going to evict you (unless you live in California or Hawaii, then that’s a different story.) So basically the difference between renting a home and paying your mortgage is that at the end of the story you own the property and it’s yours to keep. While when you rent the property, you just keep paying without owning anything.
So I get it, that many times people will feel guilty of buying a foreclosed home and as you probably are aware: those go into the markets for a much lower price. I ask you all to not feel the single amount of guilt, as it is perfectly okay with you buying something owned by a bank. You need to get off the mentality that the family owned the home: if they did, they wouldn’t be paying mortgage fees every month. Having said all this, you never know what type of a situation you will find in such a home: the reason those hit the markets are because the home owners were unable to make payments and most likely filled for bankruptcy protection. So if someone is in such a nasty situation, do you really think they will have put money into upgrading or maintaining the home? More likely you will need to run a small renovation yourself to make sure everything is in good shape.
Always make sure you get a peek of the home, before you even have a thought of purchasing it (either directly from bank or on an auction.) It would be foolish of you to get yourself a nice bargain and then walk in the house and the door falls apart. Many times banks will renovate these places in order to beef up the property value: make sure you know about all this information beforehand. Also make sure you do your price shopping: look at other homes in the neighborhood or similar size homes. What do they go for? Are the auctioneers being too aggressive on their pricing? Make sure you have confidence in the information you have.
Finally, you will want to make sure everyone in your family agrees with it. If you have some liberal minded person that feels that it’s wrong to buy a home from someone that just lost it, tell them to send me a message so I can type in some words of wisdom. What I mean by everyone being on board, is everyone in the family should want to move to that new location and new house. If someone is having hesitations, it’s okay to miss out on an auction. Especially after the 2008 crash, there have been just so many vacant homes. More homes than people could actually buy. So with patience and persistence that dream home that you want will soon become yours. Just remember to not over pay for it. After all this, you can now head to the auction show and grab yourself a nice deal.
Hopefully this added some value and helped some people. Appreciate you checking out on the blog today, and will have some more content in the upcoming hours.