What are the risk of buying an occupied bank REO property via auction ?

[Account Closed]

I am an investor and the house that I like, currently is occupied by a tenant who is taking exceptional care of the premise.  It is immaculate and well cared for by the tenants.  They are good tenant, and have expressed an interest in staying long term. and I want them to stay should I win the auction.

I just don't want to inherit any unknown debts/liens/issue .Can someone tell me, how does the bank's obligation to me change when it comes to an occupied home ? Do they have to pay off the HOA liens, municipal liens, or any issues that are clouding the title before they hand it over to me via Special Warranty Deed?

[David Begley]

@Account Closed

Dexter, I can't with certainty answer your questions, but I can provide my experience in the few REO/foreclosed properties I've purchased at auction. Moreover, the correct answers may vary by jurisdiction anyway. Each of the properties I purchased by auction were advertised as being Occupied but by the time I closed and visited the property, the occupants had left. This may just be a Wells Fargo policy (all of my deals were auctioned by WF); they evidently offer cash for keys after foreclosure so their Asset Protection army can secure the place to prevent further deterioration and devaluing.

With respect to liens, outstanding HOA fees, or other surprises, I have access to the MLS databases and LexisNexis and can perform cursory title searches. AND, I always required an owner's Title Policy prior to or on the day of closing to [better] ensure clean title.

Good luck!