I'm going to attend my first Sheriff's sale (Philadelphia, PA) next week. If you've purchased a property from a Sheriff's sale, did you do a basic judgement and lien search before bidding on the property?
If not, did you run into any problems after the purchase?
Either way, did you have any issues getting title insurance within 30 days of the purchase?
With any and all properties you are interested in buying you do a Title Search. As long as you buy title insurance you are good. These are as/is sales and they should expose all things associated with the property. If not, the title search will do this
ALWAYS do a title search, they are a necessity and very enlightening.
You should not be buying a property at auction without doing a title search. Period. End of story. You need to be looking for liens that will stay with the property after auction, and each state is different. These are debts that the buyer will be responsible for. Taxes? HOA? Is it a 2nd that is foreclosing?
Also, is there a redemption period after the sale? In Oregon, there is a 6 month period for redemption. But we have found a way to sell in 3 months, and in some cases, 1 month.
I would definitely have a liens and judgement search ran against every property that you are thinking about bidding. Any outstanding liens that are held against the property are yours to deal with after the sale. I think you can get title insurance on the property after the period of redemption has passed. (I think the period is one year from the date of the transfer)
Just today I spoke to two investors that bought properties at auction that was foreclosed on for HOA liens. The conversation started, "The property is worth $150k+ and I bought it for $7k, I got a great deal." Now that they won the bid they have us do the title search and come to find out there was a mortgage in front of the HOA.
Always do a title search prior to bidding. You don't want to "win" someone else's debt!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.