Question: If I buy a home at a foreclosure sale, and later determine there is another lien on the home, (other than property tax or Federal) am I obligated to pay that lien to obtain clear title?
Answer: – Yes, if the lien has seniority, you are responsible as the high bidder to pay off all liens to clear title. That’s why it’s so important to run a title report to make sure there are no liens on the property and to find out how many liens are on the property. I’ve heard of cases where individuals will bid on properties thinking they are a great deal and find out later it was the 2nd mortgage they were bidding on and they have to now payoff the first. Most lose their deposit and it goes back up for auction because they thought the opening bid was for the 1st mortgage. Hope that helps.
How do I find all the Liens on a home in foreclosure? Can anyone give me the 1-2-3’s of finding out all liens in a pre-foreclosure property? Do I pay a title company?
Dutch,
The 1,2,3’s of doing a title search is going to the court house and doing the search yourself. Depending on the state and county you live in, most larger markets will have this info online.
But the safest way would be to always have the title company do it, so that you obtain the title insurance. Don’t let a clouded title take your profits, get the insurance.
Hope this helps!
P.S. Learn to do generic title searches, so that on the “Cut & Dry” properties, you can take the risk and not use the title company.
Many times title companies will do a preliminary title search for free, if you have a relationship with them. It can get very time consuming or costly if you are doing 10 deals at a time. So get in close with a title company – let them know you plan of using them for all your closings. No matter what, you must without fail check title or you are taking a big risk. As was mentioned previously, learn to do it yourself, or create a relationship.