Assigning and assigned bid??

Question

Okay...I have definitely been on a strong learning curve these past few weeks, and I'm feeling just a tad overwhelmed.

Ok, I acquired two contracts on homes that are out of the area through a  seller who usually does REO's and tax sale.  Actually the we page I looked on was marked "REO properties for sale", so I assumed they were REO's and I'd have to do a double closing.  Upon further review of the contract I read that it was in fact an assignment of bid.  But I'm kind of confused about what that means exactly.  What I think it means is that they acquired it through a tax deed sale (NY), and are now assigning that successful bid to a third party buyer for profit.  Is this a sort of note sale? The contract says that I'll get  a referee's deed.

Originally I was just going to close using a title company in my own area, but I decided to go with a law firm instead.  I know that each property has between 2k-5k in taxes owed for this year, with no redemption from the past owner.  The local law firm advised me to find a firm in the area of the property, which I did, but that was done his past Friday, so hopefully I'll get some peace of mind tomorrow.

Now I'm confused on how to go about this if everything is good with the language of the contract.  Am I able to assign this to a buyer instead of double close? The purchase is not in an LLC, it will be in my personal name, so I can't just sell a company with the property as an asset. My closing date is set for the 16th.

Account Closed · Answer

It does sound like you bought assignment rights and are stepping into the shoes of the winning buyer at sale. Unlike Wayne above, I think you are buying the properties. But NY tax sale law isn't my strong suit. The referee's deed would then be made out to you (or your buyer, if you re-assign it to somebody else) instead of the winner at sale. You'd have to research what a referee's deed conveys in NY. How clear is the title after a tax foreclosure?

I agree with Wayne in that it is unlikely there is enough fat on those properties that both the winning bidder and you could mark up the sales price in order to sell to an end buyer.

Rick H. · Answer

A Referee's Deed appears to be the document that is used to convey title as the result of a judicial foreclosure in some (?) states. I would compare it to a rare animal in CA, the Sheriff's Deed.

I'm a left-coaster when it comes to foreclosure expertise. New York foreclosure law is pretty far although I guess I do have a few NY notes. Time will tell.

If I search for a term online using Google, and it's said I have "Googled" it, what do I call the result of a search when using Bing? Binged? That sounds like a rough weekend. Bonged?  Similar sounding. The permutations go downhill from there.

Wayne Brooks · Answer

I have no idea what a Referee's Deed is.  Again, only a local RE attorney familiar with these can advise you on what you may be receiving, and any title issues.  What contract did you use?  Is it a purchase contract for real estate, and does it say seller is specifically conveying clear title?  I'm always naturally suspicious when someone claims to have a "special" connection in buying real estate.  If they're actually buying as a non profit, I wouldn't think they be allowed to simply be reselling for a profit, as there would be no "community" benefit.  This is just another "queezy feeling" that would make me look at it even harder.

Markeilsha R. · Answer

@Wayne Brooks I looked up the seller, they commonly do business with the local counties in New York (bulk purchases). They have some agreement to bid and buy properties for pennies on the dollar as a part of a community revitalization project.

The problem with my understanding is that they are offering a referees deed issued immediately upon close. Doesn't that mean that I'm purchasing a home that they as tax deed holder has foreclosed upon? If so, does that deed become issued with my title search so I can pass on a free and clear title?

That's gonna really suck if I just unwittingly purchased worthless "rights"... I'll lose $1200 in earnest money for backing out. :-(

Wayne Brooks · Answer

You're definitely not buying a property, you're some type of "rights", which may or may not be worth something.  You need a local RE attorney that deals specifically with tax deeds.  Most of the tax deed "Rosales" I see, like on EBay, are usually worthless and they're looking for ignorant suckers.  I have no way of knowing if that's the case here, but realize the "seller" was the high bidder at the "auction", and he's trying to sell to you at a higher price.  That, in and of itself, would make me think it's not a good deal.  If it was a good deal for the buyer, they cold sell it locally, instead of trolling for buyers on an Internet site.

Assigning and assigned bid??

Most Popular Reply