If I purchase a judicial foreclosure that has a right of redemption, can the previous owner encumber the home with additional liens AFTER I get the bill of sale, but before the 6 month right of redemption period expires?
I am unable to find the previous owner to offer to buy the right of redemption, so this is of particular concern.
Hi Kim! I don't think that they can encumber the property with additional liens as they are no longer the owner of record - not on title. I think that the worst that could happen is that they could sell their redemption rights and the holder of the redemption rights could redeem the property. You could also always double-check with your title company - their attorneys can usually answer these kinds of questions! Good luck! Lisa
I think far worse than the right of redemption being exercised (cuz that would still mean you are making 9% on your money in Oregon), is finding additional liens and judgments that you are responsible for. Someone told me that liens put on the property during the redemption period are unenforceable, but it would take a court action to nullify them, which I thought was good news, but she is located in Michigan.
Are you sure the previous owner does not remain the owner of record through the redemption period? I have only seen the name of the previous owner change once the right of redemption is expired? Come to think of it, some investors elect to wait to record the deed until shortly before they close (on a flip) so that the new purchaser is unaware of their profit.
If the foreclosure has already occurred a new party owns and controls the property regardless of redemption rights. The foreclosed on party has no right or ownership stake in the property. They only own the right to redeem. Sounds like you need to talk to an attorney - it would be worth a few hundred bucks to get piece of mind. Lisa
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