I have done quite a bit of reasearch on here about these foreclosure auctions but still have a few burning questions before I go to my first one in a few days.
I am interested in a property going to foreclosure auction on the courthouse steps this week. I have called the county but got nowhere, called the auction company who confirmed the date and time, and I called the lawfirm listed on the notice who wasn't much help either. I also reached out to a title company I have done business with in the past and they quoted me $250 to do a title search on the property.
The major concerns I have are if there are any outstanding liens on the property. Can someone please explain how the foreclosure auctions work? Can I assume that if I buy it at auction that the bank with the lien on the home is taking that as their payoff as it would be in foreclosure? Or could I buy the house to later find out that I am taking over a lien that will need to be payed off by me now? The house seems to be in pretty good shape, and running my numbers I have come up with the max I am willing to pay. However, this does not include another $xx,000 lien that I don't know about.
Anyone have exerience in this space that they are willing to share with me. Thank you.
Any way for me to search liens on my own (free) to give me a good feeling about bidding?
Yes, you can end up buying a property that still has a lien on it. If the foreclosing entity was not in first position you can be in trouble. Send me a PM and I'll get into more details for you.
Your title search will indicate which lien is governing the foreclosure. If this is your first auction bid, be very certain that the lien is in first position, you do not want to be bidding on a 2nd or 3rd lien. Another point to be wary of is that some liens are superior to 1st liens (ie. HOA, taxes, etc) and may remain after the sale, depending on your state law. Your title company should be able to give you that info. However, $250 for a search is an expensive endeavor, especially if the property gets cancelled prior to the auction day.
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
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing