New to Real Estate · 92656 · Member since 2018 · 61 posts · 9 votes
Hello BP
So assume you want to buy a property at auction, how would one go about checking and making sure that there are no liens on the property? I understand that title companies handle this in traditional sales but during an auction or prior to the auction date when you do some due diligence are there services that can help you avoid buying a property at auction that has liens placed on it?
Attorney · Clifton, NJ · Member since 2015 · 1k+ posts · 328 votes
7y
@Louis Van Der Westhuizen you should definitely contact a title company and run everything before you buy. After you close, whatever is attached to the property (lien, etc) will becomes your obligation
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
7y
Regarding "...how would one go about checking and making sure that there are no liens on the property?.." I guarantee that there is at least one lien on the property if there is an auction, assuming this is a public auction.
Hire an attorney who you trust who can do a title search.
It would seem like a costly process to pay for title search on every property you bid on when you likely won’t always be the highest bidder. And yet one would be crazy to skip that step! Thanks again!
It would seem like a costly process to pay for title search on every property you bid on when you likely won’t always be the highest bidder. And yet one would be crazy to skip that step! Thanks again!
For those people in my area in situations like yours, or in other words in your shoes, I recommend they take an entry level paralegal course (only a few hundred bucks) at the local community college. Back in the day (2005?), we were fortunate enough to have an attorney teaching classes related to real estate law, and I took a few of them. I would tend to do my own investigations at the courthouse and could then eliminate the impaired opportunities before spending a dime. Keep in mind, though, I did spent time learning, time in class, then some time in court records... but the bottom line for me was the education was well worth every penny. I would suggest the same IF you are doing lots of cases. I was plowing through hundreds of cases a year when I was actively buying for my company.
The gist of the process I used: educate myself (yourself), do my (your) own due diligence, eliminate the crud, run potential acquisition targets by the closing paralegal, then work with the closing attorney to work out the title exceptions (if any) and negotiate with lien holders. In the big picture, this process saved time and money and worked well for both my company and the legal firm.