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Buyers Warned Against Deceptive Real Estate Auctions
By sharon | June 23, 2008
According to a report from Inman News, there was a lawsuit that alleges deceptive advertising practices in real estate auctions.
One of the complainants, Laura Torres, won a bid for a $153,000 home. After completing the requirements such as escrow, property appraisal, professional inspection and contract signing, the complainant was contacted by the auction company Countrywide two days before the closing. She was being asked for an additional $50,000.
When asked for a comment, Countrywide responded that they did not commit anything illegal since their auction practices are based on a reserve auction method.
The lawsuit also claimed that modern real estate auctions have become a ‘bait and switch’ scam where buyers are lured under false pretenses that when a property is sold, it is in fact sold.
Other scams that are reported these days involve foreclosure rescue operations. With the millions of homeowners losing their home to foreclosure, this is no longer surprising.
For buyers hoping to take advantage of affordable homes sold at auctions, it is very important that you understand the entire process. Without knowing your rights as a consumer, you might end up being taken advantaged of by unscrupulous auction companies.
This is also applicable to foreclosure auctions. The only difference is that the auction is conducted by the local sheriff. Still, it would not hurt if you will learn about the foreclosure auction rules for that particular county.
Aside from this, you must come prepared. For instance, you should first determine your bid limit since foreclosure auctions can be quite heated. If you are not careful, you might pay more than you can afford for a repossessed home. Some seasoned investors check out the foreclosure properties before the foreclosure auction date. Since these foreclosures are sold ‘as is’, it is considered prudent to conduct an inspection.
Topics: Real Estate Foreclosures |