How to check and liens on property you are purchasing on an online auction before the auction date? I want to bid on a property but not knowing how to check prior debt make me very nervous. What can I do to be more prepared?
Hi Luckisha, Being nervous about checking on liens is smart. Many of the online auctions will provide title information, which is supposed to contain that info. Even better is to call the county and check with them. Are you buying locally? Even if you can't get into the property, doing a drive-by is important to me. I once drove past a tax sale property that looked fine in the picture but was completely burnt out in the back half!
@Luckisha J. get in good with a few agents. They should have relationships with Title Companies that can search title for you. Some may do for nothing, but some may charge $100 or so for each search.
@Luckisha J. In most areas a tax lien foreclosure wipes out any other debt attached to the property.
Do you know if that is the case in NY or where you are bidding? If you don't know then a much more important thing to know and learn is the rules for your state. I mean this seriously and say this to protect you. If you don't know something as basic as to whether other lien holders are wiped out by a tax lien, you shouldn't be bidding.
In MD a tax foreclosure does wipe out other lien holders, mortgages etc. Presuming that is true where you bid I would care what other stuff is attached to the property. What i care about is what is the property I am bidding on likely to be worth in it's current condition. For me that means driving by everything I want to bid on.
only thing that could survive would be IRS and that sunsets.. My dad then me over the years bought hundreds and hundreds of parcels at tax sale and never ONCE checked title.
Now mortgage or trust deed foreclosures sure very important.
its all about the asset in tax sales as Ned alluded to.. and in state with tax certs.. I don't know how you do that when there are 20,000 going to sale at one sale :) kind of overwhelming I sure got an education and realized it was not something I could be proficient at unless I built a division for that specific purpose.. whats your secret Ned ???
@Jay Hinrichs This year we evaluated 8,000 properties in the 2 months before the sale. We have been doing this long enough we have really learned the neighborhoods and values. We have learned what a fixer upper is likely to sell for with a quick sale. The main thing we do is drive by and do a quick visual check. That is about 4,000 each for me and my partner with a helper in the car to drive or take notes.
This is our advantage, we put in more work that anyone else before the sale. In Baltimore City it is something that i don't think we can ever delegate and no software or online research can substitute for the work of driving around and looking at those properties.
I agreed with Ned - drive-by is a must before bidding on any property in large cities to determine the condition of the city block of the property and nearby blocks - looking for boarded-ups and number rentals in the area that will help or break the fix and flip sale value. If you're not from Baltimore or any other city then consider visiting it to do a drive-by or hire or partner with someone from the area you are looking at to do the legwork for you.