Do Your Homework Before You Buy a Home at Auction

By Ken Kalthoff
|  Friday, Nov 5, 2010  |  Updated 8:00 PM CDT
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A big auction featuring more than 200 properties in the DFW area promises properties at a fraction of the value, but you should do your homework first.

Ken Kalthoff, NBCDFW.com

A big auction featuring more than 200 properties in the DFW area promises properties at a fraction of the value, but you should do your homework first.

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Real estate auctions promise prices far below property values, but experts say potential buyers should do some digging before bidding.

A press release for an Auction.com event next week says a home at 6922 Lindsley Avenue in East Dallas is an example of the deals that will be available.

The minimum bid price is $39,000. The site says the 1,330-square-foot house was previously valued at $369,870.

The house is in the attractive Santa Monica subdivision of Hollywood Heights, but the home is in disrepair, with no kitchen cabinets or appliances.

"It's been vacant a long time, and I think most of the neighbors have commented that the house hasn't been sold," neighbor Charles Bambach said.

He also said he couldn't believe the house was ever worth $369,870.

Neither could Charles Dannis, a real estate expert who teaches at the Southern Methodist University Cox School of Business.

The value would amount to a price per square foot of $278.

"It compares to maybe The W Condominiums down in Victory," he said.

But that doesn't mean it couldn't be a good bargain at the right price.

"I think any one who gets the house and knows how to rebuild it is in for a good investment," Bambach said. "All the houses around here are in good shape, so it's not like this is a bad neighborhood and the house isn't worth anything."

Dannis recommends auction bidders carefully investigate a property well before making a bid. A real estate agent who works in the area, an attorney, an appraiser and, especially, a structural inspector should review the property.

"You want to have kind of a team put together," he said.

The Auction.com event includes 95 properties with additional auctions in Houston and San Antonio this week.

The auction will be held Tuesday at the downtown Dallas Hyatt Regency Hotel. Registration is at 5 p.m., and bidding starts at 6:30 p.m.

Properties are open for inspection on Saturday and Sunday from 11 a.m. to 4 p.m.

You can see the properties in the Texas auctions at Auction.com.

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