Anchor Intro: Going once, going twice, sold! Real estate auctions are becoming a popular way for foreclosures and other houses to change hands, especially in areas of the country hardest hit by the real estate crisis. But in some auctions, when the gavel comes down, the bidding isn't over: Bankrate.com explains.
Voice over 1: With the foreclosure rate at record highs, would-be homeowners are flocking to auctions like this in hopes of picking up a bargain.
SOT: "Hopefully, if I get lucky this time -- if I get lucky, maybe I get something."
Voice over 2: But at many of these auctions, there's something the hopeful might not realize: Just because the auctioneers says sold doesn't mean you get to buy, at least at the price you think you do.
Voice over 3: If you read the fine print, you'll see that most property at these heavily advertised public auctions is sold subject to the lender's approval.
Voice over 4: Which means that if your winning bid isn't high enough, the lender can try to get you to pay more or simply refuse to sell. That comes as a surprise to many.
SOT: "I thought I put a bid in, I get the property."
Voice over 5: And that's the case the vast majority of the time. It's just not always guaranteed. And some would-be homeowners have felt so misled, they've actually sued the auction companies.
Voice over 6: ...something they might have avoided had they read the fine print and understood how these auctions work.
Standup: Bottom line? At most of these auctions, you might get a deal. But you're not likely to get a steal. Because when that auctioneer's gavel comes down and he says sold, that's not necessarily sold. For Bankrate.com, I'm Kristin Arnold.