Consumer Alert
The Real Cost Of A "$1" Home

As home buyers search through the Multiple Listing Service (MLS), it can be truly exciting - for a moment anyway - to come across a home listed for a dollar. That is, of course, until they remember the old adage: If something seems too good to be true, it probably is.

Those "$1" homes usually sell for market value, and often more.

Not Necessarily a Bargain on the Block

When you see a home listed for a dollar, what you are really seeing is an announcement of an upcoming auction. An auction company that is a member of the Multiple Listing Service can use the service to list the homes they plan on auctioning (usually six to eight weeks after listing the home in the Multiple Listing Service).

Starting the bidding at - and therefore listing the home for - a dollar has proven an effective way to advertise the auction.

It's important to remember that - even if the bidding starts at a dollar - auctioned homes usually sell for about market price. And, as can happen as bidders get caught up in the emotion of the auction, these homes often wind up selling for more than market value. In addition to the purchase price, auctioneers charge home buyers a premium of three to eight percent. Plus, even if you do win the bid for an unbelievable price, the seller always has the right to refuse the offer.

Finally, to be eligible to bid on that "$1" home, you must first come up with a cashier's check (usually $10,000). What's more, you must demonstrate that you are able to perform a closing within 30 to 45 days from the auction.

The Home Buyers, Inc. Can Help

While not the bargain you might have hoped for, an auction is one way to find your home. And, as with any other means of buying a home, it helps to have and experienced advocate on your side.

If you see a home like this in the MLS and think you might like to bid on it, contact The Home Buyers, Inc. We can register you so you can participate in the auction.