Title search before going to Auction?

Question

Hello all!  I have been searching my legals for foreclosures going up for auction.  There's an auction Dec 3 that I am interested in attending - need to go just to observe & learn - but there are a couple of properties that my husband & I are interested in.
Just want to make sure I know everything before I get there.  I have researched both properties on the county website, do I need to get a title search on these before I go to auction and bid on them?
One looks like a foreclosure due to default in mortgage.  The 2nd looks like foreclosure (although I don't think they use the word foreclosure in the legal notice) - because a loan was taken out & had the property as 'security' or 'collateral'.  I'm assuming in a case like this I have to make sure there's not a first mortgage - or would there not be a first mortgage if this bank is 'selling' the deed to the property.  In this particular one - the research I have done on my own - looks like the property was paid for cash - no mortgage co. showing up or no security deed.
Thanks for any and all advise!

Account Closed · Answer

1. You want to know that you can obtain title insurance. Contact a title company and see how they handle contingent policies. By this I mean ask them if they will offer a commitment letter or similar so that if you bid and win they will issue a title policy.

You need to know that a title policy can be put in place if you want to finance the property or sell to someone who will want to finance the property.

2. The process will vary by county or state. You need to know the local rules.

3. In OR there can be a claim for back taxes that were paid by the state to the county. The claim will not show up on the title records at the county. Hence you need to know your state and how things are handled.

4. If you did work checking the title then you should know if there is a first, etc. You also should be able to match the foreclosure action against the title to see who is taking action, their position and other details.

5. Look for recent judgments filed in the county that might not show up against the property yet. Stuff that is being filed just before the auction to get in under the wire.

You need to know all the facts or be prepared to pay for mistakes. Maybe it would really be best to attend and not bid and then look at the title details over the following weeks to see what gets recorded.

John Corey

Michael Rossi · Answer

UAC,

You MUST know the rules in your area pertaining to the auction.  I would recommend going to the Sheriff's Office (or whoever puts on the auction in your area) and asking them exactly how it is done (ask all the questions you can think of and be sure you really understand the procedure).

Here in Ohio, the auctions are operated on the principle of Caveat Emptor (let the buyer beware).  I always do a title search (myself) for any property that I anticipate bidding on.

Mike