Web-Based Foreclosure Auctions Spark Controversy

Web-Based Foreclosure Auctions Spark Controversy

Will the Internet replace public foreclosure auctions?

Public auctions of foreclosed properties began in the 19th century as a practical way to ensure there was no chicanery between lenders and public officials.

Next month, Duval County, Fla., will become the first county in the country to hold an Internet foreclosure auction, forgoing the traditional courthouse sale in the hope of attracting buyers from other areas.

If the Web-based process works out well, and other states sign on, it will be an earth-shifting change in the way foreclosures are handled.

Some real estate professionals think it is a bad idea.

"There are things about the title that you just can't find on the Internet," says Bruce Norris, CEO of the Norris Group, a real estate investment firm in Riverside. "They can't tell you whether you're buying a first mortgage or a second mortgage. If you're buying a second, then you don't own the home free and clear."

Source: The Los Angeles Times, William Heisel (10/05/08)

Tips for Buying at Auction--April 3, 2008

Ben Anderson, a real estate auctioneer and member the National Auctioneers Association, predicts auctions may make up as much as 15 percent to 20 percent of all real estate sales given nationwide foreclosure rates. Traditionally, auctions represent just 8 percent to 10 percent of such sales.Here are his tips for buying at auction:

Conduct due diligence in advance of the auction. Inspect the property. Review any available documentation, such as previous inspections, appraisals, and seller disclosure statements.
Review the title search. The seller's representative usually requests this at the time of the listing.
Arrange for financing. Clarify with the lender the qualifications and the amount available for a loan.
Know the market. Check comparable properties and what they have sold for, and analyze nearby listings.
Review the terms and conditions of the auction. Before auction day get a copy of the purchase agreement and the auctioneer's terms and conditions. Read and understand them.Source: Denver Post, Christian Toto (03/16/08)