Government Auctions

Written by Patricia Skinner
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If you have familiarized yourself with the local market and are confident that you are armed with all the necessary facts, government auctions can be an excellent way to acquire your foreclosure property. Contrary to what you might be told, these auctions are open to the public and you do not need a real estate broker to bid on your chosen property. A clear, insured title will be conveyed to you in most cases once you have bid successfully on a property.

Pros and Cons of Government Auctions

Before you bid at a government auction though, do make sure that your chosen property is not still occupied. Also, you should be aware that if you buy at auction you will be required to pay next day in most states. For your local by laws, ask a reputable local real estate agent. Another point to make sure of is the current market price for your foreclosure property. Government auctions are popular because it is widely believed that foreclosure homes sell for a lot less than the market price. The truth is that a large proportion of them actually sell for more than the market price--so beware!

Monthly mortgage payments can be more than the rent you're paying at the moment. But interest from your mortgage and real estate taxes can be deducted from federal income taxes (and some state income taxes). This means that you may owe less money on your taxes or even get a refund. Before you take the step of buying a foreclosure through a government auction, make sure you talk with a tax consultant to see how homeownership might affect your tax situation.

Homeowners become responsible for all those things that landlords pay for when renting. These expenses might include the cost of repairing appliances, painting your house and mowing the lawn. Older homes, although they are sometimes cheaper to buy, may have more maintenance and repair costs, such as roof, plumbing or heating repairs.

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