You can find nicer properties for less money when you purchase a seized home from the government. While these homes are usually offered at below their market value, some are significantly cheaper making them quite a find. Here’s how to get a great deal on a seized home. Find the seized homes that are being sold or auctioned off.
The Internet is a good place to start your search. You can go to the government site Homesales.gov for listings of government-owned single family homes in your area. The US Treasury website (ustreas.gov/auctions) has a more varied selection with different types of
properties being auctioned off, mostly being sold because the IRS seized them when the owners failed to pay their taxes.
You can contact local realtors and ask if there are any government-seized properties on the MLS. Directly calling local government agencies may also help you track down other seized homes that are available.
Learn the auction procedures.
There can be some differences in how the government sells off the property, but usually a seized home will have an “offer period” where you can submit a bid by mail or through a real estate agent until a final date. At the auction time, all the offers will be opened and the highest reasonable bid will be selected, including any live bids if live bidding is part of the auction. If they are all too low for the government to consider, it will offer the home again, usually with a lowered minimum bid price.
Research each home carefully.
While a seized home is usually only open for inspection the day before or even just an hour or two before the auction, you can check out the street it is on and the surrounding neighborhood. You can drive by the outside, which can give you an indication of what it might look like inside. Always check to make sure the price you intend to offer is actually a good price for that house and neighborhood. It is also very important that you look into all liens and encumbrances on the property. There can be further claims on the home than just what the government wants to get out of it. If you purchase it, you may be required to pay those off. You need to make sure you fully investigate each one before you bid.
Carefully inspect the property.
When you are able to look at the seized home, be sure to do a careful inspection. You may want to bring in a certified home inspector who can do a more thorough and complete job. Make note of all the repairs that are needed and think about what they will cost when considering whether to make a bid and what amount to offer.
Be prepared to finalize the purchase.
While details vary, typically if you are the highest bidder for a seized home, the government requires the deposit (usually 20% of purchase price) at the close of auction in cash, cashier’s check or a US bank money order (payment types may vary so be sure you know what is needed ahead of time). The rest of the money will be due in a specified time period, which usually can be as soon as 3 days or as long as 30.
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