Items to Research Before Bidding At Auction

[Robert Mack]

I am currently in SWFL and as some may know a lot of properties are getting bid up, some with as many as 50 or so bids on one property.
I came across a wholesaler who is buying properties at the auctions steps and then has a set fee that he takes for the property. He has a team of people who research everything and they guarntee in writing that title is clear and there are no leins etc.
I however wanted to ask all of you here what needs to be researched before buying a property at auction because I take what people tell me with a grain of salt, so I wanted to get input from more people.

I understand buying property at auction has a greater risk because you can not inspect it and it is truely as-is, but people are doing it so I am trying to learn the steps needed to take before going to auction.

Thanks Rob

[Jason S.]

Just a few preliminary thoughts - this is a beginner list and of course not all inclusive.

1. What recourse do you have if title is not as they say? How deep are their pockets if you have to sue? You will want to do your own title research first - sort of a "trust but verify" scenario.

2. If vacant then you are lucky. If vacant when you see it but not when they first bought it make certain they took proper steps on clean out etc. When you take a home at auction you do not automatically get their "stuff" too. Make certain everything was handled properly and documented properly.

3. Make certain the sale looks "clean" and "makes sense". If buying from an HOA sale or sale from a 2nd mortgage - these can be overturned by a judge (first mortgage sales can be also but not as often) - so know what you are getting.

4. Certain liens can carry over after a sale. Some mechanics liens etc are not always extinguished.

5. You will have to pay up the property taxes. Not everyone remembers to check this and understand there may be thousands owed.

6. Certain IRS and other tax liens may remain and carry on the property - have your title rep check this.

7. Do not take any "out of the ordinary" properties. Major code or environmental or building and safety violations carry over to the new owner (that's you) - stick to the easy stuff.

- Those are some initial things to think on.