Looking at online auction. Pay for title search before bidding?

Question

I am looking at a property in an online auction at Hudson and Marshall. As I have only done 2 deals so far through a realtor that were both from the MLS, I have zero experience with online auctions and do not know what to expect.

My biggest fear is regarding the title. How do I know if the house has clean title? If that involves paying for a title search, should I do that before even placing a bid? What kind of title search and how much money am I looking at?

The listing says that "Buyer has the option of obtaining a Special Warranty Deed(title insurance required with Special Warranty Deed, at buyers expense.)"

I emailed the county recorders office and she says "I show a Sheriff Deed that was done Oct 5, for $110.250 to JPMorgan Chase Bank.

Do either of those point to a clean title?

I am scared to even make an offer as I am so unfamiliar with the process but it is in a neighborhood that I like and already own a rental in, would like to continue purchasing in this area.

Rich Bultema · Answer

OK. I checked the county website and a negligable amount of taxes is owed. Basically the second installment of the year has not been paid. Not enough to break the deal. Water/sewer are private well/septic.

So. How do I check on utilities? Just call customer service of the utility company?

Lynnette E. · Answer

BUTTTT it does not mean that with a clean title that you will have no bills associated with the property after closing, depending on location.

For example, you may have some taxes remaining, may have water, electric, sewer, and/or gas bills, especially if these services are municipally owned.  You may have IRS liens still attached.

Wayne Brooks · Answer

Yes, probably better than 95% of the properties have title insurance available.

Rich Bultema · Answer

is this also the case with most of the other auction sites?

Brian Ploszay · Answer

The auctions from Hudson Marshall will come with a clean title.  You win the auction, engage in a contract, which gives you Title Insurance.

The Title Insurance company will check the title, clear it, and insure your title.  Online auctions from Hudson and Marshall are usually foreclosures.  Foreclosures go through a legal process that extinguishes any competing ownership claims on a property.   And you still want Title Insurance.

Brian Ploszay · Answer

The auctions from Hudson Marshall will come with a clean title.  You win the auction, engage in a contract, which gives you Title Insurance.

The Title Insurance company will check the title, clear it, and insure your title.  Online auctions from Hudson and Marshall are usually foreclosures.  Foreclosures go through a legal process that extinguishes any competing ownership claims on a property.   And you still want Title Insurance.