Buy a home for $300 via Government foreclosure house sales...Is it for real?

Question

I have just seen a TV commercial about government tax foreclosure house sales. They were claiming that you can buy homes all across the US for as cheap as $300 or less. Is this for real? There must be a catch does anyone know? However If there isnt a catch how do i get started.

Answer 1

im sure theres a catch..i doubt you'll get a house for $300...if that were the case all these houses in foreclosure would be sold..

Answer 2

no it is not real

Answer 3

It did happen once.  It was in 1968 and a real house sold for $300.  Everyone was amazed.  It never happened again so it is not fair for advertisements to keep "announcing" it like it was big news.

The theory is that the government takes possession thru nonpayment of IRS tax or other federal debts.  There is an auction. It is advertised in the local newspaper. It is not a secret.  (there are 3 big auctions advertised in today's Phoenix newspaper).   The highest bidder wins.

You don't have to pay anyone to teach you how to do this. You go to the auction and raise your hand. If you win, you pay cash.  Most of the houses sell for $60,000  or more.

Answer 4

NOPE, not for real. . . . .

Answer 5

HERE YA GO READ THIS

Wednesday, August 13, 2008

Foreclosure fallout: Houses go for a $1

Ron French / The Detroit News

DETROIT -- One dollar can get you a large soda at McDonald's, a used VHS movie at 7-Eleven or a house in Detroit.

The fact that a home on the city's east side was listed for $1 recently shows how depressed the real estate market has become in one of America's poorest big cities.

And it still took 19 days to find a buyer.

The sale price of the home may be an anomaly, but illustrates both the depths of the foreclosure crisis in Detroit and the rapid scuttling of vacant homes in some of the city's impoverished neighborhoods.

The home, at 8111 Traverse Street, a few blocks from Detroit City Airport, was the nicest house on the block when it sold for $65,000 in November 2006, said neighbor Carl Upshaw. But the home was foreclosed last summer, and it wasn't long until "the vultures closed in," Upshaw said. "The siding was the first to go. Then they took the fence. Then they broke in and took everything else."

The company hired to manage the home and sell it, the Bearing Group, boarded up the home only to find the boards stolen and used to board up another abandoned home nearby.

Scrappers tore out the copper plumbing, the furnace and the light fixtures, taking everything of value, including the kitchen sink.

"It about doesn't make sense to put the family out," Upshaw said. "Once people are gone, you're gonna lose the house in this neighborhood."

Tuesday, the home was wide open. Doors leading into the kitchen and the basement were missing, and the front windows had been smashed. Weeds grew chest-high, and charred remains marked a spot where the garage recently burned.

Put on the market in January for $1,100, the house had no lookers other than the squatters who sometimes stayed there at night. Facing $4,000 in back taxes and a large unpaid water bill, the bank that owned the property lowered the price to $1.

$1 sale to cost bank $10,000

While it's not unusual for $1 to be exchanged when property is transferred for legal reasons, listing a home in the Multiple Listing Service for $1 was surprising and unsettling to Kent Colpaert, the listing real estate agent for the property.

"I've never seen a home listed for $1," Colpaert said.

"But it's been hit hard: It's just a shell."

On Tuesday, Realtor.com listed one other single-family home, one duplex and one empty lot at $1 in Detroit.

Dollar property sales are the financial hangover from the foreclosure crisis, said Anthony Viola of Realty Corp. of America in Cleveland.

Lenders that made loans to unqualified buyers during the height of the subprime market now find themselves the owners of whole neighborhoods of vacant, deteriorating homes.

"No one has much sympathy for these banks that made subprime loans," Viola said. "And in some cities like Cleveland, judges aren't letting them sit on the properties -- they're ordering them to tear them down or sell them."

So desperate was the bank owner of 8111 Traverse Street to unload the property that it agreed to pay $2,500 in sales commission and another $1,000 bonus for closing the $1 sale; the bank also will pay $500 of the buyer's closing costs. Throw in back taxes and a water bill, and unloading the house will cost the bank about $10,000.

"It doesn't make sense in some neighborhoods to keep paying costs and costs," Colpaert said. "It can make more financial sense to give it away."

Buyer calls it an investment

Colpaert declined to provide the name of the prospective purchaser, because the deal had not been through closing. The agent did say that the buyer agreed to pay the full list price of $1, and planned to pay cash.

The buyer, a local woman, considers the home to be an investment property and will not live there, Colpaert said, though exactly how soon the buyer can expect to recoup her four-quarter investment is questionable. Replacing the guts of the house will costs tens of thousands of dollars, and the owner will have trouble keeping scrappers from stealing the improvements as quickly as they're installed. Home demolition costs about $5,000, Colpaert said.

Meanwhile, the new owner will owe $3,900 in property taxes in 2009 on her dollar purchase unless she challenges the tax assessment.

While selling a home for the amount of change most people could find between their couch cushions is unusual, some abandoned homes in Detroit sell for $100; vacant lots can be purchased for $300.

"My 14-year-old son could buy a block of Detroit property," said Ann Laciura, senior servicing specialist for the Bearing Group.

You can reach Ron French at [phone] or [e-mail].

Answer 6

The system varies, but here is how it normally works:

Once a property has been delinquent in paying taxes for several years, the city/county will place it up for tax sale.  At the tax sale, anyone can 'purchase' the property for the highest bid, always at least the amount owing.

However, notice I put 'purchase' in quotes?  That's because you do NOT get title to the property for some period.  Usually, you will wait at least 1 year, during which time the owner has the right to reclaim their property by paying the amount owing.  If they do, you get nothing.

So, let's look at it this way.  First of all, any mortgaged property will be claimed by the mortgage holder.  They will not let a $100,000 property be sold for a few hundred dollars taxes.  They will place the higher bid, or pay the tax bill and start foreclosure on the property.

Second, most tax sales involve much higher tax bills, since they involve several years of past due taxes, plus the taxes for the year of waiting.

Third: the VAST majority of tax sales do not proceed to a final sale.  The owners will find the money, or accept their need to pay (many involve disputes with the county or city), within the reclaiming period.  Face it, would YOU let a $100,000 property be taken from you for a few hundred or thousand?

So CAN it happen that you can buy a home for a few hundred?  Yes, possibly.  Is it at ALL likely?  No way.  Probably more likely you'll be hit by a bus tomorrow.  If it were possible, why would the people hawking this material not do THAT, instead of taking time to push it on TV?

The best way to make money on tax sales is to sell gullible buyers material that purports to teach them to make millions for doing nothing.  

Answer 7

I read a story about a house in Detroit that was sold for $1.  However, it also had a lien on it for back taxes in the thousands of dollars.  All the plumbing and wiring was stripped out by people who would then sell it for scrap.  The windows were smashed or removed.  The interior doors were stolen.  It was basically a shell, and of course the interior was trashed by homeless people who were squatting there.  It would cost several thousand to have it torn down.  If a tiny city lot were worth more than 10-15k in that area, then it would be worth it to hold on to, but $300 certainly doesnt get you a liveable house.