Filed under: Personal finance
This post is part of a series where personal finance expert Dan Solin looks at money moves that may seem smart in tough economic times, but are actually quite dumb. See all 12.
Is there a silver lining in the horrific number of home foreclosures we read about every day?
While having a home foreclosed must be traumatic for the homeowner, does it present an opportunity for investors and potential home buyers to pick up a bargain?
The answer may depend on the nature of the sale.
The classic scenario is the auction, where a home is literally auctioned off to the highest bidder, often right on the lawn in front of the house.
The basic problem with buying a home at auction is that you have no right to inspect the home and you have to pay the full purchase price by cash or bank check on the spot. There have been situations where buyers found serious problems with homes purchased in this manner, which would have been uncovered by a competent home inspector. Also, while not common, the homeowner may refuse to vacate the house. If so, you may be confronted with delays and significant legal fees to evict him.
Continue reading Dumb Money Move No. 10: Buy a home in foreclosure
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