TV US Autcions? Scam or third party?

Question

Greetings:

Ok, noticed an "infomercial" USActions ro something to that effect.  Basically- go and bid on foreclosed properties. They take a 5% buyers premium.

The old fashion way, where we live ( a metro area in FL) is get the foreclosure list 2 bucks- go to courthouse on scheduled days and bid.

May guess is there is no advantage to buying through this service.

Is anyone familar with this "advertisement and or process?

I'm buying an investment property, but the spouse has suddenly become interested.  I told her this was a third party money grabber and that I'm not giving 5% to anyone for leg work I'm able and willing to do.

Am I missing something here?

Thanks

Dutch Smythe · Answer

RW;

Thanks, now it's time for me to do due diligence.

Again, thanks

Richard Warren · Answer

Bidding may start low but there will be a reserve.  Buying at the courthouse has problems as well.  You usually arenâ€™t given a chance to inspect the property and you are buying as-is and must have funds ready.  You will not be allowed any contingencies or the chance to arrange financing.  The property may also be occupied and you have to evict the people who are living there.  My preference is to buy REO properties but not through the auction process.  You may also want to check out Government owned homes such as the ones available through HUD or the VA.  You can search these properties at http://www.homesales.gov . 
            
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Dutch Smythe · Answer

RW:

You supplied the missing piece of the puzzle and eliminated "doublespeak" and "foggy" answers I received from colleagues.  Much thanks;

Yes, the knowing the value is very important.

The question I have with the "USAuctiion" or other REO sales auctioning groups is why does the bidding on most properties start as low as 500$ ? Is this a hook? 
Will the banks selling the reo most likely have a reserve on the property?.

After your explanation, the best bet is buying at the court house.

thanks

Richard Warren · Answer

You are looking at two different types of auctions.  The one that takes place at the courthouse is the actual foreclosure auction where the home is taken away from the owner for not paying the mortgage or other lien.  The other auction is one that is being held to dispose of the REO properties that the banks own after the courthouse auction.  Most homes auctioned at the courthouse are bought by the banks that hold the mortgage, they will place a bid for the amount that is owed to them and take possession of the home.  They are often the only bidder because the house is usually not worth what is owed.  The bank will then attempt to sell the home, now an REO, in order to recover as much of the amount owed as possible.  Those auctions have a buyerâ€™s premium attached, which goes to pay the company holding the auction.  In either case you need to know what a home is really worth in order to be sure that you are getting a good deal.

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