Purchasing at Auction in San Diego Ca

[Parker Cox]

So I am currently looking into purchasing my first home from Auction and I have no idea about how the process works other than you buy "as is" and must have cash for your bid. 

 But, this property seems like its the famous "too good to be true" scenario--worth nearly a million dollars but on auction for 450,000.  Then looking at the documents, it has two mortgage liens against the house 1 for 350,000 and one for 500,000 and I need to understand if I was to purchase the house for the auction price, would I be liable for one or both of these separate liens? as in, if I bought it, does that wipe out all existing debt against the mortgages?  There is also delinquent tax to the tune of about 10,000 that I would assume the next owner is responsible for?

But, another caveat, there was a first auction, and no one bid, obviously huge red flag, then they lowered the cost and are doing another auction.  So, it really feels like somebody knows something I don't.  But how do I find out if there is a major problem that I am missing through ignorance?

Anyone with a little insight into auction purchases, especially in Ca or San Diego CA would be greatly appreciated.  

[Karl Kyler]

Parker,

There are a lot of moving variable pieces here so I will do my best to explain.  The state of California will allow someone to go deliquent up to 4 years on their taxes before they foreclose on the property.  In this scenario, I am not sure if th delinquent taxes transfer to the new owner.  I'd imagine that they get paid after the auction but I cannot guarantee that.

As for the mortgages, the first is the primary loan and usually the biggest.  The first is usually the bank that forecloses on a property first because they are only second to the taxes on the deed....meaning, they get paid out immediately after the taxes do (this is why I believe that taxes get paid from the auction).  After the first is paid off, if there are any funds left over they will go towards the second mortgage.  Whatever, if any, is not paid off it is washed away.

If you want, I can do some addition research for you through my title company and help you with the purchase.  Don't worry, I am not out to steal the deal from you.  Just offering some help.

Best of luck,

Karl