Buying Foreclosed Home on Auction

7 Replies

Hey guys,

Help wanted! Newbie here, will be participating in an auction for a rental investment property in a few days!

How do you go about (in a thorough way) seeing if there are any liens/second mortgages etc on the property? Do any of you have a good process to ensure there aren’t any major surprises after winning a bid?

Thanks for your help in advance!!

If you don’t want to pay for a title search....you can do the search yourself using your local county sites online.....the tax dept , wherever they record deeds, mtgs, etc.

Originally posted by @Account Closed :

Let's see if the biggerpockets community can give him a better answer than a "title search from a title company".

I've been going to the auctions in Detroit only a short time, but the regulars there damn well know how to do this, and they aren't paying 50-150 per property, every week. They'd also die rather than share the info. 

Should have included in my original post that I was trying to avoid paying someone to do the work! Was your process searching through county records? I've been able to track down the homeowner name but I am having difficulty interpreting the documents that I am finding

 

Originally posted by @Wayne Brooks :

If you don’t want to pay for a title search....you can do the search yourself using your local county sites online.....the tax dept , wherever they record deeds, mtgs, etc.

I tried that myself and was able to find the homeowner information but am having difficulty deciphering what all of the documents mean for me as an investor. I may just end up paying for a title search 

 

@Jeffrey Cheng Account Closed There are online search companies which will do searches showing all outstanding mtgs, liens etc.  Pro Tirle services is one, in the $50 range.

As far as the position of the entity foreclosing, as to mtgs, priority is as per recording date.  Typically hoa debts remain, depending on the state, and the amount is a guess unless they have filed a lien.  If an hoa is foreclosing, the mtg.s typically remain on the property.  And there are current /back property taxes to determine as well.

Getting a professional search is the best though I’ve always done my own.  One word of caution is doing yourself...if you can only search by owner name, you will occasionally miss a lien which has a misspelling in the borrower name.  Also, some borrowers bought sub2 or by quit claim deed....there may be mtgs/liens still attached to the property from the prior owner.

@Wayne Brooks @Account Closed

Thanks for your prompt responses and advice! Sounds like the best course of action for my situation will be to hire a title company. Better to shell out $50-$100 now and be confident with what I’m bidding on rather than get stuck with a surprise lien later on.