Buying Foreclosed Home May Not Be Worth It
By Amy E. Feldman
PHILADELPHIA (CBS) - Like many cities across the country, the city of Detroit has faced a housing disaster with more than 62,000 homes that faced foreclosure for failure to pay property taxes THIS YEAR ALONE. About half of those properties will be auctioned by the city for $500 this fall.
Sound too good to be true? It may well be.
First of all, in most foreclosure auctions you get the property and what comes with it. Not just the four walls. You also get the tax debt that was what led to the foreclosure in the first place. Tax liens aren't wiped clean in a foreclosure sale so know how much you'll really owe.
And, in addition to the property and its liens, you might also get tenants. Find out if the property is occupied and if so whether you're going to have the heart to evict people.
If your goal is to fix it and flip it, you best know what you're doing because renovations can be very costly - and the target of thieves and vandals.
And finally, find out other requirements. Many city auctions, including Detroit's, require that you actually occupy the premises. So, take a look at your soon to be new neighbors and then decide if you'd rather spend your $500 on a couple of days at a nice hotel.
