Auction

[Tony Kogan]

Hello BP community,

I am planning to go to the auction in Atlanta that is being advertised at auction.com. I wanted to find out if a foreclosure wipes out all the liens against the property. Also what is the most economical way to do a title search. And lastly what other due diligence do I need to do prior to going to the auction. Any help from the experienced investor is appreciated.

[Richard Balsam]

Sorry so long! Here in Georgia - it's relatively easy - but a lot of research is needed. First, the GSCCCA web site is a real time saver. I have subscribed for over 10 years now. But- they changed the game a bit and you need the book and page number when researching the recorded deed on each home. Used to be able to search by name - and read all liens associated with that person. Can still do it- but they charge double per month for this service ( 11.95/month or $23/month to search by name). You can go to any courthouse and obtain this information free. Just need the time to get there and spend hours researching! As for the liens - when you receive your Foreclosure Deed and file it at the courthouse ( do not mail it - trust me) - it wipes out all junior liens except: IRS, State of Georgia taxes and F.I.F.A liens. If the house is in a POA neighborhood ( not a HOA run subdivision) - their liens remain as well. The good news: IRS and Georgia back taxes are considered removed 90 days after the sale. I had this happen before on a property. Never received anything confirming removal - but I sold the home to the lease option tenant - and no issues with his title insurance at all - just a smooth closing three years after I purchased the home with GA and IRS liens on it. Unfortunately, there is no short cut if you are to research title - and real comps on each house. I assume there are other investors that just buy a home not knowing about title issues and liens - as they say- buyer beware! Oh...one more thing as an insider "been there, done that" kind of issue to watch for: ALWAYS check the title of the home you purchase months AFTER your purchase. Sometimes ( ask me how I know) a state tax sale can occur at the same time - and this investor can actually foreclose on your home after 18 month or so - and take your house, with his lien accruing 18% interest - when you think you own your house without liens! Had this happen. Received a letter detailing the foreclosure and date of upcoming sale without a "final payment" which I never heard of - turns out $3800 payable this week. Yes- they waited until one week before the foreclosure date to alert me. I didn't know 12 years ago that a state tax sale can run concurrent with a foreclosure sale. Doesn't happen often. But...it's a numbers game. Eventually something can try and bite you if not careful! Good luck.