Buying at Auction (Foreclosures)

[mindy1701]

What is the name of your state? ID

I’m trying to understand exactly you get when buying a property on a foreclosure Auction.

I understand the condition of the property is As Is, what I don't understand is other encumbrance on the property.

Is it truly a clear title?
Free from Mechanics Leans / Back Taxes / judgments / second trust Deeds ….etc..

What is “Cleared” and what is not ?

Is there such thing as Title Insurance for these types of sales ?


Thanks
Mindy

 

[FlyingRon]

Junior liens are generally wiped out by the foreclosure. Senior liens and taxes aren't.
You need to do your research. Title insurance won't cover you.

 

[LindaP777]

Junior liens are generally wiped out by the foreclosure. Senior liens and taxes aren't.
You need to do your research. Title insurance won't cover you.

Ron, either I'm reading your answer wrong, or you are wrong. At a foreclosure auction (sheriff's sale), everything including taxes, mortgages and liens should be wiped out, unless there is a defect in the proceedings (and one was overlooked).
Mindy, call whoever is handling the sale and ask them if you will be getting a clean title if you win the bid. If they tell you everything is wiped out, then ask if you have a right to vacate the sale is something was accidentally overlooked.
And, yes, you can get title insurance if you run a title search. In my county, I have 30 days from the time of the sale to run a title search. If something was overlooked, I can vacate the sale within 30 days. If all is well, I close and buy the title insurance from the company that ran the title search for me.

 

[Grandma's house]

I've done many loans for folks buying foreclosures and have bought some myself. You do have title insurance especially if you are financing the homes by a lender. The first step is to get your loan in place without a property (thoroughly approved). In the section for the property address on the application you just need to put: to be determined.

Go to the auction and get the property you want. You have time to bail on the purchase if your title co. finds too many liens and things still existing.

Most Jr. liens are wiped out by the 1st however in todays foreclosure market this can get very hairy. This is why there are so many boarded up homes. They are not even auctionable due to too many liens and the 1st does not want to cure them and further lose more money.
Now it's time to get an appraisal. Often you CANNOT get inside the house to let the appraiser in especially if the owner is still occupying it. This is very tricky.

Wait about 6 mos. or a year. You will have so many to choose from and the price a 3rd of what they are starting at today.

OH...Linda...is correct too...lol I didn't see that.