Real Estate Investor · Houston · Member since 2008 · 6 posts · 0 votes
Here's the deal.I called a law firm to
ask them if they could represent me in obtaining
"excess proceeds" from the tax foreclosure sale, but
they told me that only the former owner is entitled to
those proceeds, is this correct? I thought the money
to any one that claimed it first. I was the highest
bidder at a property tax auction this week and the
amount of the final bid was over the tax amount owed.
Is this correct in my thinking?
If I track down the previous owner and have him sign over the deed to
me (quit claim deed), can I at that point then go
collect the excess proceeds? Thanks for all your
help.
1. You won the bid at an auction. The auction is over the deal is done.
2. The prior owner stopped being the owner when you won the auction.
3. Quit claim - they agree that when they sign the document they have no rights in the property. They are not even saying that they once had rights. Just that they no longer have rights in the identified property.
4. Their right to receive the overbid is not the same. They were the owner when the auction closed. They get the money. Signing the property to you after you already own it is not going to change their right to collect the overbid.
Why do you really care? You bid more than needed to pay the tax but likely what it took to buy the property. You paid a price for the property. I am assuming you paid what you think it is worth. Were you counting on being able to recover the overbid? If so you made a mistake and did not understand what overbidding means. Live and learn?
To just expand on one of John's points about a Quit Claim Deed. In Texas, at least, quit claims are no longer a valid method to transfer title or interest. Meaning they are worthless. Title companies don't recognize them anymore. They have to go back and get a warranty deed signed.
To just expand on one of John's points about a Quit Claim Deed. In Texas, at least, quit claims are no longer a valid method to transfer title or interest. Meaning they are worthless. Title companies don't recognize them anymore. They have to go back and get a warranty deed signed.
Good point Ryan.
Even in states where they are still legal a title company can refuse to issue title insurance if there is a quit claim. Too many claims filed later when a problem with the title is discovered.
Just started real estate in March 07. I asked, is there any clubs or forums to join. Respond was Bigger Pockets, Now I know why.
John you were right, I was confusing myself, I had so-call gurus telling what to do. This deal is close, on to the next one. Once again, thanks John and Ryan
Lender is high bidder at auction and bids minimum bid so no money is
owed to Borrower. Lender then lists the property for sale w/ a real
estate agent and property sells at a profit over the original auction
bid. Can the lender keep the profit or does he have to refund that
profit back to the original borrower?
I know it's been awhile, however, I've just run across this thread. The original owner is entitled to the excess proceeds unless there is a lien holder that is next in line (such as a second mortgage that wasn't paid off).
You can get a portion of the proceeds if you have an agreement to do so with whoever is due the proceeds.