Buying Foreclosure Property that has 2nd Loan

[Chuck Hupert]

I recently received a lead on a SFH in foreclosure. I've done my due diligence on this and the ARV on the property is coming in around $185,000 and The max I'm willing to purchase the property for is $115,000. The total Judgement due on the lien is $111,846. After coming to a verbal agreement for $115k the seller disappears for about three weeks. When she finally contacts me back she springs on me that she has an extra home equity loan for $32,000 on top of the total judgement and through a separate bank than the original. Through a title search we are unable to locate anything on this 2nd loan and if I am going to do this deal it has to be completed in the next 10 days.

So my question is, has anyone had any experience in a situation like this? I'm aware this may be a tactic by the seller to try to up her profit by a large margin, I'm just curious if this turns out to be a real problem, if scenario sounds fixable or if I should walk away from this one.

Thanks in advance everyone!

[Tom Gimer]

Unless I had 100% confidence in my title search, I would forego the private sale (which sounds like it's dead anyway) and instead participate in the auction sale.