Jun 9, 2009 6:00 pm US/Eastern
3 On Your Side: Buying Foreclosed Properties
PHILADELPHIA (CBS 3) ―
-
-
Ethan Miller/Getty Images
When the housing market began to unravel, so did the fortunes of many of homeowners. Unable to pay their mortgages, many houses eventually are foreclosed on and put up for sale.
For those looking to buy a home, a foreclosed property may seem like a deal, but as Your Money Team helps you to Survive In '09, 3 On Your Side's Jim Donovan finds that buying a foreclosed property isn't for everyone.
At the Valley Forge Convention Center Monday night, 60 foreclosed properties from Reading to Cape May and points in between were auctioned off in a one-day event by Real Estate Disposition Corporation.
"We're really just doing, I think, the economy a great favor. Some folks don't always understand that there's really no good that can come from an empty house or vacant house," said Trent Ferris with Real Estate Disposition Corporation.
Raymond Rapposelli and his wife obtained a home in Galloway, New Jersey that was valued at $498,000 for $285,000.
"We live in a beautiful house, but this house is twice the size for half the price," said Rapposelli.
The Rapposelli's and others were in search of a deal. Real Estate Disposition Corporation says that in all of their auctions participants are allowed to inspect the homes in advance, but that isn't always the case with other companies in the industry, which could lead to a problem when people are purchasing a foreclosed home.
"If you are a novice, you may be getting more than you bargained for," said real estate agent John Featherman.
He says many first time home buyers are unprepared for the possible pitfalls of buying a foreclosed property.
"You may be inheriting encumbrances and liens that the former property owner had. If you can't inspect a property and can't eyeball from the outside what you're going to repair, you may be inheriting a serious debt," said Featherman.
And if the home is still occupied at the time of the sale, your ownership doesn't guarantee possession.
"You could be inheriting a tenant for years and years until you evict them," said Featherman.
According to the company that held the auction Monday night, many of those homes were accessible for inspection before the sale. But in many foreclosure sales, that isn't always the case. So buyer beware.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Click to enlarge
U.S. House Passes Health Care Bill 30 mins ago 
Stumble It!
Reporting
