How do I find out if there are any liens on a Bank Owned Property?

Question

I am just starting out, and have been reading alot for the last 6-7 months. I have read that REO properties come with clear titles, and Foreclosures could have liens. The house is labeled "Bank Owed", and doesn't specifically say Foreclosure or REO.

I guess my main question is How do i find out if there are any liens on the house.

Thank you BP!!

I guess my main question is How do i find out if there are any liens on the house.

Thank you BP!!

Andy Mirza · Answer

@Artem Kovalevskiy Do you have a relationship with a title rep? These are the people that are tasked with getting more business for title companies and they typically solicit real estate agents. If you have a good realtor already, he or she probably can give you a reference to a title rep. That title rep will be able to help you look into title issues on any potential deals. When I bought properties at the auction, I would e-mail or call customer service (info provided by my title rep) to get any information I need about title prior to bidding on the property.

Ned Carey · Answer

If you are buying at a foreclosure auction, not recommended for newbies, you have to understand exactly what you are buying. You could be taking on liens that you don't know about.  Read the terms of the auction.

Most deals however the contract will say something like "Seller will provide clear title free of all liens and encumbrances". You don't care if the property has liens because the seller pays them out of their proceeds.

Steve Babiak · Answer

bank owned = REO

Artem Kovalevskiy · Answer

Thanks Ron

Ron S. · Answer

If it is a bank owned property, there are no liens. Once the bank owns it, they received a trsutee's deed upon sale, free and clear of any liens/encumbrances. Can any liens survive? Yes. Any and all liens in front of the entity that foreclosed survive and tax liens survive until they waive their right to enforce the lien (I foreclosed, they have a lien, they have to pay me off in order to take the property, choose not to, forego their lien on that property).

If it says "Bank owned". The bank owns it. While it's possible, it's not probable that a bank that is still in business and not shut down by the FDIC, took a property subject to existing liens.

Artem Kovalevskiy · Answer

Thank you for all of the feedback! This isn't an auction, so from what @Tom Mole mentioned, there might be some tax liens on it. Tom, I plan on rehabbing and holding for a year then flipping it.

Phil Z. · Answer

Foreclosure and REO typically refer to the same thing.  I think you are referring to Foreclosure 'Court House' Auction Vs. Bank Owned REO (Foreclosure).

The court auctions come with liens and/or occupants that your responsible for, they want a huge non refundable deposit and you usually can't see the interior of the property.  In my area most people don't bid at auction unless its a real steal or they somehow already seen the interior (maybe it was listed, or they snooped into the house)

Tom Mole · Answer

Ask your title agent to do a preliminary title search. They'll often do this for free (with the hope, perhaps expectation, that you'll use them for your title work.)

However, if the property is bank owned and the bank was the first lien, then almost without exception the only lien that still may remain is the property taxes. You can usually check with the county tax assessor or tax collector to find the back taxes due. Is the property in Allegheny County? If so, start here with the Treasurer.

Remember that just having a clear title does not make a deal a great deal. Do your homework and make sure that this deal is priced right and you'll be able to do with it what you plan with it. BTW, what do you plan to do with it? (Buy and hold, rehab and flip, wholesale, etc.) Run your numbers based on you exit strategy and never offer more than your calculated maximum allowable offer. If any of this is not perfectly clear, ASK about it before you move forward.

I hope this helps. Keep us up to date on your progress. I love to hear how things for you. Great job getting started.

All the best

Artem Kovalevskiy · Answer

@RobCaldwell thank you for a quick response! Is there a way to find that out before even submitting an offer?

Rob Caldwell · Answer

@Artem Kovalevskiy

At the time you place the property under contract to purchase it, part of your due diligence and financing contingency will provide for you to have a title search performed prior to your purchase closing. The title search will be performed by a closing attorney/title company, depending on your State.

How do I find out if there are any liens on a Bank Owned Property?

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