FAQs Regarding Buying Foreclosure Properties
How can I learn about the property prior to a purchase?
Information can be found at: county assessors, recorders offices, title companies and a real estate broker who works with investment properties.
How can I find out information pertaining to the title?
Information can be found with title companies where they can research information on properties. Some investors will buy title information from the trustee, since, the property may be subject to other liens. In certain situations the loan in default is the senior lien, which means that the other junior liens will be wiped out at the auction. If the loan in default is a junior lien, the purchaser will assume all other liens in higher priority as well.
How can I bid on a property at auction?
The auction will commence outside the county courthouse on the front steps. The trustee will provide the date, location and opening bid. The majority of trustee sales require the bidder to have certified funds in the form of cashier’s checks on hand. The property will be sold to the highest bidder at the auction and typically the trustee will prepare a trustee’s deed that transfers the title to the purchaser at the trustee sale.
Who bids at an auction?
Lenders, investors and residential home buyers looking for a bargain.
The foreclosing lender did not bid at the auction - why?
It usually means that it probably did not want the property because of superior liens, tax liens or excessive repairs. Some say that as a rule of thumb if the lender doesn’t bid for the property at auction, you probably shouldn’t either.
What is the biggest mistake to avoid?
Depending on the amount of repairs needed, short term and long term goals and timing in the market, paying more than 70% of value for a property could signal trouble. In order to calculate a property’s potential, you should look at the market value, outstanding liens and repair costs.
What about a Deed of Trust Foreclosure?
In a Deed of Trust Foreclosure, the borrower is the grantor and the lender is the beneficiary. The title insurance company, or the beneficiary’s attorney, is the trustee.
