Are there really tax sale properties locally that you can buy for a few hundred dollars or is it just a scam?
You always see the ads on tv and online about homes for a few hundred dollars but no matter how much I search for these so called steals they don't seem to exist. Is it just a scam to buy they're system or it there truth in they're claims?
You always see the ads on tv and online about homes for a few hundred dollars free and clear of any payments but no matter how much I search for these so called steals they don't seem to exist. Is it just a scam to buy they're system or it there truth in they're claims?
- Anonymous1 decade agoFavorite Answer
There is a grain of truth in the ads you see.
When an individual does not pay their property taxes, the debt can be auctioned off. If you buy the debt - you have a lien against the property. The owner of the home always has a time limit to pay off the debt before you can foreclose on the property.
Usually tax sales are well attended and the properties are auctioned usually starting at or near the amount of the debt. Chances are you will pay less than the house is worth; however, if the person did not have the cash to pay a tax bill I wonder how much disrepair the home is in.
- 1 decade ago
Yes, but in many cases you have to bid sight unseen or from just a newspaper listing--no picture, etc --just a written description. Sometime the auctions take place in public on the street, on the steps of the courthouse and you are literally screaming to be heard above the other bidders.
You must pay the final sale price in full, plus the buyer's premium before you leave the auction that day.
You are also liable for unpaid taxes and any liens on the property that exist as well.
This is not a field for the no-knowthing, with no savings, insurance or prior experience in the field of real estate.
You can often buy with almost no money down, but never for just a few hundred dollars. Not really. You'd have to buy, sell, fix up and resell or re-rent the property in a very short period of time, meeting local codes for all repairs and changes to the property.
You either have to have cash in hand at the auction, or if buying outright, get a loan to cover the cost of purchase, fix up costs, labor, utilities, etc. That loan fee is what they are calling "a few hundred down". Then you have to sell the property for a huge profit. And you have to do so during a pre set period (the short-loan period) that you have prearranged with a bank to cover. If you can do it then you owe nothing in terest or fees to the bank, you get your purhase price back, with extra to cover the repairs, etc, and you're home free.
IF you can do all that.
You pay big interest and penalties if you don't get it sold, or rented out at a high rental fee, thus covering your purchase price, fix-up fees, loan and any interest, prior to the date of the loan coming due.
You can get wealthy doing it if the market's right and you know what you are doing and have some cash flow from somewhere else to tide you over as you get started or if the housing market crashes. Or, you can broke, as many people have.
Enter this field with good contacts in the real estate, mortgage/banking, insurance and consturction field, a little bit of help from someone who's done it before and with some common sense and luck---and the sky really is the limit.
The systems they sell on tv to do this ARE scams. The two biggest marketers have been brought up on IRS fraud and consumer fraud charges in almost every jurisdiction they do business in.
If it really were that easy, we'd all do it and be millionaires today.
For every person who succeeds using these systems, there are literally hundreds, if not thousands, of people who are heartbroken and bankrupt.
I wouldn't buy the systems they sell on TV. I'd go see a realtor buddy and tell them what you want to do and ask them if you can partner with them to do so. Do the same thing with your banker buddy and your construction buddy, etc. Make contacts thru work, thru your neigbors, your friendly neigborhood bank teller, a social club you may belong to, etc.
Good luck. I really do hope it works for you.
- Anonymous1 decade ago
It isn't really a scam, but any property you can buy for a few hundred dollars is probably worth -- a few hundred dollars. It may have zoning difficulties, water issues, be too small to build, or some other defect, but you can bet that it will be defective somehow.