Question

Please be detailed and site sources.

1. Explain, what are the risks and rewards to a (i) Buyer (ii) Seller (iii) Lender and (iv) Real Estate Agent of a Buyer buying a property from a clerk of court auction in Florida. (4 points)

Answer 1

Buyer:

• Risk associated:
  • The sale is “As Is” for cash. The bidding can be a bit expensive for the buyer to outdo the other bidders.
  • The buyer is not allowed to conduct a formal inspection of the property
  • Background investigation needs to be conducted to estimate the original value of the property
• Benefits associated:
  • The deal can be very profitable
  • The deal comes in with a list of co-bidders who can become future buyers of the property

Seller

• Risk associated:
  • A courthouse foreclosure happens if the original owner is not able to repay the mortgage amount to the bank or government.
  • Stricter terms is offered to the buyers which might make the sale, a bit difficult
• Benefits associated:
  • Auction ensures that the property gets at least the market value as the minimum bid.
  • No need to check buyer authenticity as only qualified bidders come for the bid
  • It is 100% sure, that if the suction happens, the property will get a buyer

Lender

• Risk associated: Less bidders might come for the bid of a condemned property
• Benefit associated: The lender will be able to recover his amount timely and more securely

Real estate Agent

• Risk associated: Less bidders might come for the bid of a condemned property
• Benefit associated: The seller will definitely try to hire an agent to publicize about his property auction and attract more bidders

https://www.realtor.com/advice/sell/i-am-in-foreclosure-can-i-still-sell-my-own-home/

https://www.auction.com/blog/5-things-you-must-know-about-selling-property-at-auction/

https://www.weissman.law/resources/risk-reward-buying-foreclosed-properties-courthouse-steps