Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate products and services to help you make smart decisions with your money.
A mistaken bid on an online foreclosure auction site could cost not one but two families their homes.
One Florida couple thought they scored a deal on a $16,000 home they picked up off the county clerk's auction site, WFTV reports.
What they didn't realize was that not only were they purchasing the existing mortgage – $200,000 they couldn't afford – but the previous owners hadn't moved out yet.
The owners were foreclosed on after missing one month's of dues to their Homeowner's Association – a fact in and of itself that's a little unsettling – which put their house on the auction block before they'd even had a chance to move out.
“We have no place to go,” said Dawn Waterson. “I don't know where to go. I can't live like this."
The solution at this point is still up in the air, but Waterson and her husband are hoping to rent the home from its new owners. In the meantime, they're packing up their belongings.
Sadly, this situation has become increasingly common as the housing crisis left neighborhoods with more shuttered homes than interested buyers.
We ran Waterson's ordeal past real estate expert Rick Allen, founder of MortgageMarvel.com, who said it looks like the couple who bought the home at auction must have purchased the home blind – without cross-checking the title first.
"If you do a title search then you know exactly which liens are being foreclosed on and you absolutely need to know that when you're buying a foreclosure property," he said.
The problem with online auctions goes further than this family's situation. Oftentimes, it's something of a gamble, especially since interested buyers aren't allowed to hire inspectors to check out the property beforehand, Allen said.
"You don't always know what's wrong with the property, what works and what doesn't," he said. "It's entirely different than buying in a standard sale." It's also why auctioned homes are such a steal.
Your best bet is to ask to visit the home in person to inspect it yourself, paying close attention to the heating, plumbing, and water systems.
DON'T MISS: 9 inspiring stories from homeowners who lost their homes to foreclosure >
