{"id":352631,"date":"2016-04-04T10:42:05","date_gmt":"2016-04-04T15:42:05","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/consumer\/lemon-law\/auction-guides-not-so-hot-properties.html"},"modified":"2024-04-15T08:06:52","modified_gmt":"2024-04-15T13:06:52","slug":"auction-guides-not-so-hot-properties","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/consumer\/lemon-law\/auction-guides-not-so-hot-properties.html","title":{"rendered":"Navigating Auctions: Auto, Real Estate Foreclosures, and “Ugly” Houses Predatory Practices"},"content":{"rendered":"\n
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Navigating Auctions: Auto, Real Estate Foreclosures, and "Ugly" Houses Predatory Practices<\/h1>\n
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\n By Natalie Moritz<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Auctions may seem like an easier way to get your dream home or car. They offer the chance to buy a big-ticket item well below its market value.<\/p>\r\n

But claims like \u201cseized cars from $500" and \u201cforeclosed homes from $10,000" are more complicated and riskier than they often appear.<\/p>\r\n

This article details what to know about real estate foreclosures<\/a> and automotive auctions. You’ll learn legal tips for the auction process, how to protect yourself from predatory practices, and what to know about companies offering cash for \u201cugly" houses.<\/p>\r\n

How Exactly Does an Auction Work?<\/h2>\r\n

Auctions are in-person or online public sales often used to sell vehicles and real estate, especially foreclosed homes<\/a>.<\/p>\r\n

An automotive auction is a platform for sellers to sell vehicles<\/a>. Sellers can be private owners, dealerships, and government agencies. Potential buyers can bid on the cars they’re interested in, with the highest bidder winning the vehicle.<\/p>\r\n

Property sale auctions have a similar process. When a homeowner defaults on their mortgage payments<\/a>, the lending institution may repossess the property. The lending institution is typically a bank, mortgage lender, or government-sponsored enterprise. The repossessed or foreclosed home is often sold at an auction with the purpose of recouping the lender’s money. These auctions are usually public and can attract buyers looking for homes priced well below market value.<\/p>\r\n

While it offers the potential to purchase vehicles or real estate at lower prices, the auction process also comes with risks. For example, auctioned properties and vehicles are often sold "as-is."<\/a> This means you must purchase the item in its current condition with no guarantees or warranties<\/a> from the seller. With some auctioned homes, this may also mean you can’t inspect the property or even see the interior.<\/p>\r\n

Contract laws<\/a> and consumer protection laws<\/a> cover some aspects of the auction process. Both buyers and sellers should understand the legal considerations involved. This helps ensure the process is compliant with the law.<\/p>\r\n

For example, some jurisdictions have laws protecting consumers from deceptive trading practices<\/a>, like shill bidding (making fake bids to drive up the price) or misleading descriptions of items.<\/p>\r\n

What Is an Auction House?<\/h2>\r\n

An auction house is a company that facilitates the sale of goods or property through auctions. They host both physical and online auctions<\/a>. Auction houses handle a wide range of items, including:<\/p>\r\n