What is Unclaimed Property?

[Dante Nava]

While doing some research and following links to things that sounded interesting, I found a link called Unclaimed Property. If it is what I think it is and based off of what it looks like (orphaned property waiting for a new owner, now owned by the state), it could be very lucrative (VERY good deals to be found), however... it looks too good to be true.

What is it, and is there anything to my assumptions above? Thanks in advance.

[Rick H.]

I was hoping to interject something profound, however, Ibrahim, Ned and Jay have pretty well said it. So, I will be redundant instead.

Much of unclaimed property consists of personal property like small residuals from bank or stock accounts, insurance policies, deposits and proceeds from rentals, such as storage lockers, to name but a few sources.

Where real money is generated is from surplus and over bids, also known as excess funds. These are the result of owners losing the real property through mortgage or trust deed loan foreclosure or property tax sales, in states where the latter occurs.

Occasionally, some real estate is sold to satisfy a debt. That's all most foreclosures are. When bidders pay more than the underlying debt, the overage is subject to claims by junior lien holders (creditors) in the order that their liens are recorded. Anything beyond that inures to the record owner, typically as of the day before the sale.

Similarly, in States where properties are sold after a period of time to satisfy back property taxes, the overages -or surplus- monies may be claimed by lien holder creditors and ultimately record owners.

Now, don't think that you've just discovered the Holy Grail of real estate. There are plenty of local State laws, and an awful lot of moving parts. And, you'd better be comfortable with both courthouse records and occasionally appearing in court. Oh, and by the way, you won't be the only guy or gal soliciting former owners.

Lastly, there is the sad story of Joe Kaiser. He got so good at this play that he found himself on the WA State AG's radar and you can Google how it all turned out. Last time I talked to Joe, things were beyond ugly.

Aside from the cautionary tale, this is yet another way that real estate just keeps on providing fruit from my labor.