Liens on a property and determining position
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Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
2y@Doug Kirk, a few thoughts:
1. What kind of auction? This matters as different auctions are prone to different title issues.
For example, in my state PA there is an inheritance tax and many TAX auction properties originate from people passing away and the heir(s) not taking control over the estate and paying those property taxes. However, that inheritance tax is still owed and is a lien on the property even though IT IS NOT RECORDED ANYWHERE!!!
2. MANY things can affect the title to a property, not only issues that are specifically recorded as a public record like a mortgage. There was one example in #1. Another example is that with a tax auction it is common for all the interested parties to not be notified 100% correctly meaning they could in theory come back later and try to reverse the sale and take the property back!
3. Some kinds of auctions allow you similar protections as a traditional sale. Many times a lender buys a property back at a sheriff's sale/auction where they are selling properties as part of a foreclosure.
After that, the lender may use a private auctioneer to auction off the property and try to recoup as much money as possible. With a private auction of an already foreclosed property, you will usually be allowed as part of the closing to have a title search done and to buy title insurance. So, this type of auction usually offers similar protections in the process as a conventional sale.
4. Some kinds of auctions are "misleading". Again with tax auctions, some kinds of tax auctions are referred to as a "free & clear" sale. In my state that is a common name for a judicial tax auction where MOST liens are wiped away as part of the sale. I say MOST because not ALL are wiped away. State and federal government liens like inheritance tax and IRS tax liens are NOT wiped away. So, don't be fooled by the common name for some of these auctions.
5. If you are just starting out, tax and foreclosure auctions are probably not the way to go for most people. There is more messiness and risk. They are not well suited for a novice.
You may see auction results that look appealing, but you don't consider things like
a. Sometimes the closing costs from the auction are HIGHER than expected. In my area, they charge transfer tax on the assessed value rather than the LOW sale price. Normally that tax is split between buyer and seller but since its an auction the buyer pays it ALL.
b. With most auctions the buyer cannot get into the property and evaluate its condition. So, that adds to the risk more-so for a novice who doesn't know how to factor in that risk.
c. Even with a completed sale often times you might need/want to pay a lawyer to do a quiet title action to quell any possibly attempts to reverse the sale by an interested party. That costs money as well.
10 Replies
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes2y
@Doug Kirk, a few thoughts:
1. What kind of auction? This matters as different auctions are prone to different title issues.
For example, in my state PA there is an inheritance tax and many TAX auction properties originate from people passing away and the heir(s) not taking control over the estate and paying those property taxes. However, that inheritance tax is still owed and is a lien on the property even though IT IS NOT RECORDED ANYWHERE!!!
2. MANY things can affect the title to a property, not only issues that are specifically recorded as a public record like a mortgage. There was one example in #1. Another example is that with a tax auction it is common for all the interested parties to not be notified 100% correctly meaning they could in theory come back later and try to reverse the sale and take the property back!
3. Some kinds of auctions allow you similar protections as a traditional sale. Many times a lender buys a property back at a sheriff's sale/auction where they are selling properties as part of a foreclosure.
After that, the lender may use a private auctioneer to auction off the property and try to recoup as much money as possible. With a private auction of an already foreclosed property, you will usually be allowed as part of the closing to have a title search done and to buy title insurance. So, this type of auction usually offers similar protections in the process as a conventional sale.
4. Some kinds of auctions are "misleading". Again with tax auctions, some kinds of tax auctions are referred to as a "free & clear" sale. In my state that is a common name for a judicial tax auction where MOST liens are wiped away as part of the sale. I say MOST because not ALL are wiped away. State and federal government liens like inheritance tax and IRS tax liens are NOT wiped away. So, don't be fooled by the common name for some of these auctions.
5. If you are just starting out, tax and foreclosure auctions are probably not the way to go for most people. There is more messiness and risk. They are not well suited for a novice.
You may see auction results that look appealing, but you don't consider things like
a. Sometimes the closing costs from the auction are HIGHER than expected. In my area, they charge transfer tax on the assessed value rather than the LOW sale price. Normally that tax is split between buyer and seller but since its an auction the buyer pays it ALL.
b. With most auctions the buyer cannot get into the property and evaluate its condition. So, that adds to the risk more-so for a novice who doesn't know how to factor in that risk.
c. Even with a completed sale often times you might need/want to pay a lawyer to do a quiet title action to quell any possibly attempts to reverse the sale by an interested party. That costs money as well.
Quote from @Kevin Sobilo:
@Doug Kirk, a few thoughts:
1. What kind of auction? This matters as different auctions are prone to different title issues.
For example, in my state PA there is an inheritance tax and many TAX auction properties originate from people passing away and the heir(s) not taking control over the estate and paying those property taxes. However, that inheritance tax is still owed and is a lien on the property even though IT IS NOT RECORDED ANYWHERE!!!
2. MANY things can affect the title to a property, not only issues that are specifically recorded as a public record like a mortgage. There was one example in #1. Another example is that with a tax auction it is common for all the interested parties to not be notified 100% correctly meaning they could in theory come back later and try to reverse the sale and take the property back!
3. Some kinds of auctions allow you similar protections as a traditional sale. Many times a lender buys a property back at a sheriff's sale/auction where they are selling properties as part of a foreclosure.
After that, the lender may use a private auctioneer to auction off the property and try to recoup as much money as possible. With a private auction of an already foreclosed property, you will usually be allowed as part of the closing to have a title search done and to buy title insurance. So, this type of auction usually offers similar protections in the process as a conventional sale.
4. Some kinds of auctions are "misleading". Again with tax auctions, some kinds of tax auctions are referred to as a "free & clear" sale. In my state that is a common name for a judicial tax auction where MOST liens are wiped away as part of the sale. I say MOST because not ALL are wiped away. State and federal government liens like inheritance tax and IRS tax liens are NOT wiped away. So, don't be fooled by the common name for some of these auctions.
5. If you are just starting out, tax and foreclosure auctions are probably not the way to go for most people. There is more messiness and risk. They are not well suited for a novice.
You may see auction results that look appealing, but you don't consider things like
a. Sometimes the closing costs from the auction are HIGHER than expected. In my area, they charge transfer tax on the assessed value rather than the LOW sale price. Normally that tax is split between buyer and seller but since its an auction the buyer pays it ALL.
b. With most auctions the buyer cannot get into the property and evaluate its condition. So, that adds to the risk more-so for a novice who doesn't know how to factor in that risk.
c. Even with a completed sale often times you might need/want to pay a lawyer to do a quiet title action to quell any possibly attempts to reverse the sale by an interested party. That costs money as well.
Thanks Kevin,
I appreciate the depth of information you have provided. This is very helpful.
I agree and am aware that there is increased risk to an auction property. I have looked at both probate and sheriff's auctions. I have read a few books on foreclosure auctions. They discussed pre-foreclosure, auction, and REO properties and points to consider on each. I am currently simply educating myself on such options. I was aware of not being able to tour prior to most foreclosure auctions. This was the reason for my question. I want to be able to learn how to do my due diligence on these properties. Once I get a few stable long term rentals maybe consider looking into such properties and cover aspects I am able to confirm. I am simply educating to keep my options open on my journey.
Thanks again for your info.- Investor · Philadelphia PA | Charlotte NC | Santa Ana, CA · Member since 2021 · 34 posts · 8 votes2y
In Ohio, property liens are typically recorded at the county level, making the County Recorder's Office a valuable resource for property research. For properties in Central Ohio, you can access records through the Franklin County Recorder's Office, which provides a public records search tool to help you look up property details, including any liens. This straightforward process allows you to verify encumbrances before considering a property investment.
Alternatively, engaging a title company can offer a more comprehensive approach to uncovering liens. Title companies perform detailed title searches, revealing all recorded liens and their positions, ensuring you have a clear understanding of any potential encumbrances. For example, Ohio Real Title provides property lien search services across all 88 counties in Ohio, making it a convenient option for obtaining a thorough analysis before bidding on a property.
- 2yRemington LymanBusiness MemberReal Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
Quote from @Mitchell Coles:
In Ohio, property liens are typically recorded at the county level, making the County Recorder's Office a valuable resource for property research. For properties in Central Ohio, you can access records through the Franklin County Recorder's Office, which provides a public records search tool to help you look up property details, including any liens. This straightforward process allows you to verify encumbrances before considering a property investment.
Alternatively, engaging a title company can offer a more comprehensive approach to uncovering liens. Title companies perform detailed title searches, revealing all recorded liens and their positions, ensuring you have a clear understanding of any potential encumbrances. For example, Ohio Real Title provides property lien search services across all 88 counties in Ohio, making it a convenient option for obtaining a thorough analysis before bidding on a property.
Ohio Real Title is the company I use, and we have a joint venture with them. I highly recommend their services.
- Real Estate Consultant · Columbia, MD · Member since 2017 · 160 posts · 55 votes1y
Hey @Doug Kirk,
Great question! The most reliable method to locate liens and their positions is to conduct a title search through a title company. They specialize in uncovering all encumbrances and can save you from unexpected surprises. If you’re looking for DIY options, PropStream and DealMachine can give you some lien info, but they may not always be 100% accurate or up-to-date.
For Central Ohio, check with the county recorder’s office or clerk of courts for lien and judgment records. It might take some digging, but you can often find the information you need. If you’re serious about bidding, investing in a professional title search is worth it to minimize risk. Good luck! Auctions can be a great opportunity!
- 1yDavid LeckoPro MemberRental Property Investor · Indianapolis, IN · Member since 2015 · 178 posts · 107 votes
Quote from @Trevor Finn:
Hey @Doug Kirk,
Great question! The most reliable method to locate liens and their positions is to conduct a title search through a title company. They specialize in uncovering all encumbrances and can save you from unexpected surprises. If you’re looking for DIY options, PropStream and DealMachine can give you some lien info, but they may not always be 100% accurate or up-to-date.
For Central Ohio, check with the county recorder’s office or clerk of courts for lien and judgment records. It might take some digging, but you can often find the information you need. If you’re serious about bidding, investing in a professional title search is worth it to minimize risk. Good luck! Auctions can be a great opportunity!
Hi, I am the owner of DealMachine. Just wanted to mention we just added more leins!
HOA Lien Data in Quick FiltersWe've added new data! The following quick filters now include HOA-related insights:
- Active liens
- Preforeclosures
- Upcoming auctions
Hope this helps
- Real Estate Consultant · Columbia, MD · Member since 2017 · 160 posts · 55 votes1y
Quote from @David Lecko:
Quote from @Trevor Finn:
Hey @Doug Kirk,
Great question! The most reliable method to locate liens and their positions is to conduct a title search through a title company. They specialize in uncovering all encumbrances and can save you from unexpected surprises. If you’re looking for DIY options, PropStream and DealMachine can give you some lien info, but they may not always be 100% accurate or up-to-date.
For Central Ohio, check with the county recorder’s office or clerk of courts for lien and judgment records. It might take some digging, but you can often find the information you need. If you’re serious about bidding, investing in a professional title search is worth it to minimize risk. Good luck! Auctions can be a great opportunity!
Hi, I am the owner of DealMachine. Just wanted to mention we just added more leins!
HOA Lien Data in Quick FiltersWe've added new data! The following quick filters now include HOA-related insights:
- Active liens
- Preforeclosures
- Upcoming auctions
Hope this helps
Hey David, nice to hear from you! Keep up the good work over there at DM and keep adding new data, it's very helpful!
- 1yGamal HardingBusiness MemberProperty Manager · Columbus, OH · Member since 2018 · 34 posts · 37 votes
@Doug Kirk Similar to @Remington Lyman, I also use Ohio Real Title and they're great to work with (I have no affiliation)
10X Property Management4159 Reviews Thanks all for the info. I understand that there are reasons that full title searches on auction properties cannot be done but through many BP and other books understand there are some "best effort" services in some areas. I will give this Ohio Real Title a try and want to that all of you that replied. All valuable information
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Doug Kirk:
I have seen a few auctions on properties that have seemed to be something worth looking into but I am still learning how to locate all liens on a property or the position of those liens. What do people use to do so, especially anyone on Central Ohio? I have tried local governments sites with little luck. I have also read a few auction foreclosure books as well. Are there some of the data aggregation sites such at Deal Machine or Prop Stream that have this? I know there is risk to you never know what you are going to get. Just looking to know in the few cases I was considering bidding.
Hi Doug! You can check with your local title company and they can help with getting you more info on liens. Happy to refer you to mine!
Jimmy Lieu, Red 1 Realty4.9124 Reviews
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