When investors purchase foreclosures through an MLS, they are usually able to gain access to the interior of the property before making an offer and know that they will be guaranteed clear title before they close. But, with these two benefits comes the fact that numerous investors will be placing offers. And, more offers usually mean higher prices and less of a chance of getting a true bargain. Therefore, some investors might consider purchasing foreclosures at public auctions, before they make it to the MLS system. Agents whose clients are contemplating such purchases should educate those clients as to the inherent risks involved. These risks are: Knowing the priority of the mortgage being foreclosed. Being able to estimate the amount of rehab a property will need properly without gaining interior access. Determining whether there will be any certificate of occupancy (CO) issues. Determining whether a property is occupied or vacant and all that is entailed with...
- Clients can reap substantial rewards when buying foreclosures directly at public auctions.
- There are great risks involved with buying foreclosures at public auction.
- Clients need to be educated as to how they can mitigate risk when purchasing foreclosures at public auction.