Buying a tax foreclosure home at auction can seem like a fast way to get a great bargain on a home. However, much like any real estate, there is a lot of risk involved in tax foreclosures. Here is a short list of pros and cons to help you decide whether buying a tax foreclosure at an auction is worth pursuing.
Potential Savings: A tax foreclosure being sold at auction may mean the property is being sold for below market value. This gives you a chance to win big by buying a low-cost house at auction.
Nothing Against the Property: When you buy a property at auction, any taxes or insurance for the time are paid off by the bank. This means that when the property enters your hands there are no previous loans that can come back to bother you.
Risk: There are a lot of risks involved with buying a home in auction. For one thing, rarely is the home able to be inspected in-depth before being put to auction. This means that the home could have many issues or expenses involved with repair that were not apparent at the time of sale.
Competition: Fierce competition within these auctions can run up the price and take away any savings that my come with an auction. This can make it very difficult to rely on auctions to purchase property.
Demand: If a property is a tax foreclosure then it might have been foreclosed for a reason. The property itself may have problems with the property, poor location, or any number of issues that would make the property less desirable, which is why it may have been left to tax foreclosure.
While there are many risks involved with buying tax foreclosures in auction there is also a lot to gain. If you judge the risks properly and consult the proper legal sources, then it may be worth the risk.