Oct 19, 2007 11:48 pm US/Eastern
Not All Foreclosure Auctions Are What They Seem
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This bay view now belongs to Dien Pham thanks to an auction that allowed him to buy it at a discounted rate.
CBS
Nearly 200 foreclosed properties in South Florida are about to hit the auction block. Homes and condos are going for dirt cheap, but before you buy, you better read the fine print.
Unites such as a 3/2 apartment at the Cite condo, a building which was extremely hot until recently, are now being put on the auction block by banks. It could be a great deal, but the buyer needs to beware.
"That must be a pretty good area of Miami," said David Webb, of Hudsen & Marshall auctions.
Webb will auction off 180 foreclosed properties Saturday afternoon—the end of a week-long auction that's been traveling around the state.
"The investors seem to be buying properties at 60 to 80 cents on the dollar and then the good 'ready to be moved into properties' are going for about 80-85 percent of list price," said Webb.
Auctions usually promise bargains. The developer of Platinum attempted to auction 20 new condos he couldn't sell. Prices were so high, only eight went, because the developer committed that he would see them at "any price".
"Auctions are the way to go," said South Beach resident Dien Pham.
Pham won a two bedroom condo for $295,000.
"I'm actually astounded that I ended up with this," he said.
CBS4 News caught up to him, and learned the auction was the easy part.
"It's fabulous," said Pham. "It's so fabulous that the developer didn't want to give it up."
Following the auction, Pham says the developer exercised a clause in the contract, giving him 10 days to close or else lose his $3,200 deposit.
"So I had 10 days to finance this purchase," said Pham.
Pham believes the developer was trying to get the property back.
"I don't think the developer was very happy about the price," said Pham.
With another auction scheduled this weekend, Pham is warning bidders.
"You should enter it carefully. Be prepared to close."
Webb says it's a totally different scenario.
"It's not like a developer or an individual who really needs to achieve top dollar out of these," said Webb. "It's beneficial to get these off the books. They are highly motivated and they are able to sell."
Click Here for the Hudson & Marshall Auctions Website.
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