HOME TV AUCTION ADS
BIG-TICKET AUCTION ADVERTISEMENT EXAMINATION
QUESTION: Can home, boat, and car auction
treasures be true?
The $3000 auction home ads in newspapers and magazines, on television and
the Internet, and in coupon mailings to your home may sound like the ticket to
your dream home or car. They offer the chance to buy a big-ticket item at auction
for well below its market value. What deals! Just call the toll-free number for
Is there a catch? You bet!
If you respond, you're likely to hear pitches for guides to
cars and homes being sold in your area at great prices. However, the guidesaren't
always what they're promised to be. In addition, if you buy one, you may end
up spending more than you planned.
You'll be charged about $50 for each guide, either to your credit card or
through a withdrawal from your checking account. You may even be billed for a
guide you didn't order.
Here's how it happens: When you place an order, the salesperson might offer
to include another guide as well. What you won't be told is that you'll be charged
for the second guide, even though you never agreed to buy it.
In many cases, the businesses bill your credit card or debit your checking
account even if you never agreed to buy anything. They get your bank account
or credit card information under false pretenses, sometimes claiming that they
need the account number to verify your credit history or to "hold" your
Moreover, when auction guides arrive in the mail, chances are that they contain
far less information than you expected. Actually, it's information that is readily
available elsewhere for free.
The bottom line: While it's possible to buy cars at auction and homes through
foreclosure sales, you won't find the "deals" advertised in auction
guides sold by fraudulent promoters.
Despite claims to the contrary, the auto auction guides these companies sell
don't contain specific information about dates and locations of auto auctions
or lists of available cars. Rather, they contain general information about auto
auctions and addresses and phone numbers - all of which are available in your
phone book. You'll still need to call for details about upcoming auctions.
In addition, despite what you might hear about auction guides or see in the
ads, cars at auction typically sell for their fair market value. These auctions
attract a variety of buyers, including used car dealers, so the bidding can get
At many government sales, the items are appraised before the sale and won't
be sold if the bidding runs too low. Indeed, it's rare to find high-end or late
model vehicles for sale, especially at "bargain basement" prices. Moreover,
the truth is, the cars that sell for $500 or less usually are damaged or junk
vehicles purchased for scrap.
The same goes for foreclosed homes. Most well maintained homes sell for close
to their appraised value. The houses that sell for significantly lower prices
often are in disrepair or in unstable communities.
In addition, foreclosed homes are sold "as is”. They don't come
with warranties, and sellers aren't required to disclose any problems. Buyers,
particularly those who don't pay for a professional home inspector before closing
on the deal, may find themselves mired in unanticipated repair bills.
Auction guide companies aren't the only ones with access to information about
federal government sales programs. In fact, the information is available free
or at a low cost from the government. Some agencies maintain mailing lists to
notify people about upcoming sales. They may charge a subscription fee to maintain
the list and cover their mailing costs.
Information about foreclosure sales also is available online, through the
Multiple Listing Service, a database used by real estate agents, and through
newspapers and other publications.
The classified or business sections of national or local newspapers often
publish information about upcoming sales. In addition, trade papers like Commerce
Business Daily occasionally publish information on sales programs. Your local
library or Chamber of Commerce may maintain subscriptions for public use.
Some government sales programs also advertise on local radio and television.
Alternatively, you may see notices posted at post offices, town halls, and other
government buildings. You also might want to contact individual government agencies
and affiliates about their sales programs. Look for listings in your phone book
under "U.S. Government”, or check out these websites:
Ad Response Tips:
- Avoid giving your bank account or credit card number to a company representative
who says it's necessary for verification or credit.
- Recognize that seized vehicles often are sold at government auctions, but
rarely at the bargain prices quoted in some ads. Expect to pay what the vehicle
is worth and to compete against other bidders, included used car dealers.
- Be aware that foreclosed homes often are sold for slightly less than their
appraised values, but may require substantial repairs.
- Recognize that the auction guide company isn't the only source for the information
you want. Contact individual government agencies for information about their
sales programs. Ask to be put on a mailing list to be notified of upcoming sales.
Some government sales programs advertise in the media, on the Internet or through
postings in government buildings.
- Get the name and location of the company and check it out with the local
Better Business Bureau or state Attorney General.
- Get a written copy of the return policy before you pay for an auction guide
or list of foreclosed homes. Some fraudulent sellers of auction guides give consumers
the impression that refunds are no problem. However, often, the businesses put
so many conditions on refunds that few consumers ever get them.
- Use your credit card to pay for an auction guide. It offers more protections
than other payment methods if you have a problem with the purchase.
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Information provided by this website is general and is not a substitute for professional
advice. Please consult your investment advisor and/or attorney before entering
into any transaction.