Auctions - Or did I make a good deal? I am very confused.
Hello Everyone,
I am someone that have acquired properties buying REO properties, or private sale. Today, I was talking to my attorney and asked about buying properties at auctions. The first thing, which I knew, that buying at auctions could be very risky. He also told me that basically the same people show up at every auction. The good news is that you could still get a good or better deal on a property provided you did your homework. (This includes a title search). Matter of fact, he told me that I may be able to acquire properties faster, and for less money than waiting for an REO. However, on the other side, the bank may not accept the offer at an auction, and you may find it in REO for less money than what you bid on the property. This was a very lengthy discussion why, but it made sense. Now you must remember that if you buy a property at auction, you may have to file the papers for eviction etc... Not to mention to living up to leases the prior owner may have made with a tenant. It is not unusual here for a real estate company to pay a tenant to leave the property.
Now after further picking his brain for awhile, I asked if it was possible to do pre-auction title searches on properties, and how much would it cost? Well, I know online you can do them for around $140, but of course I could not see in paying that much. Now the deal that I made with him, was very inexpensive in my opinion. I don't wish to disclose the prices, but he gave me 2 options.
The first was doing the title search back on the property to the start of the neighborhood, for one price that is higher, or doing the present owner only, which is more reasonable. Either way I choose, he will deduct that from the cost he charges for closing on that property.
Now, my question is, am I safe enough by going back to just the present owner, or should I pay the 50% higher price to go back to the neighborhoods inception?
Now I will tell you this, that I may have them do up to 5 title searches for me a week, and I will only expect to get one of the properties at auction of the 5 title searches I have paid for.
What would you do?