First House with Agent Problem

First House with Agent Problem

Rental Property Investor · Member since 2019 · 14 posts · 4 votes

So I see a foreclosure on Hubzu and make a bid,

My bid didn’t even come close to the reserve and was very shocked they accepted it. I sent the earnest money and a month later today we was supposed to close, a attorney was driving here to meet me and told me to bring a cashier check and I asked him how much and he didn’t know and couldn’t find out, so I called the title company and they actually said they had to reschedule because someone bought the taxes on the house. This confused me because why would they move forward without this information. I pressed for details but they wouldn’t give me any. I asked if they contacted the attorney or agent since we was scheduled to close in a hour and they didn’t. So I called both and told them, which annoyed me because the attorney was driving hours to come here. Neither of them said they had any info. It was getting late so I called the local tax office before they closed to ask them if they knew anything and they said a business bought the 2016 taxes on the property, and they said most likely it was in Nov 17 when it was sold for 2000 and we have 18 months to redeem them. I’m totally clueless how this will play out and tbh it seems like everyone else is as clueless as me. If it was a foreclosure in October 2018 how did someone buy the taxes in 2017? Wouldn’t the bank pay the taxes? And also will the bank redeem the deed or let me redeem the deed and knock it off the price, or will they cancel the deal. This is a homerun deal and I just don’t want to lose it

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Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y

The only problem I can see....you linely used the bank’s title company, they are typically incompetent.  Apparently they are just finding this out, about the taxes, at the last minute....instead of weeks ago when they should have. 

As long as the tax lien Can be redeemed, the title company will simply pay it off (redeem) out of the sales proceeds, as is the bank’s obligation to do so. 

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  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    The only problem I can see....you linely used the bank’s title company, they are typically incompetent.  Apparently they are just finding this out, about the taxes, at the last minute....instead of weeks ago when they should have. 

    As long as the tax lien Can be redeemed, the title company will simply pay it off (redeem) out of the sales proceeds, as is the bank’s obligation to do so. 

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    7y

    @Jerry Barnette Yes the taxes simply get paid at closing. 

    Banks often don't pay the taxes to conserve cash. They figure they will just pay them when the property sells. They often don't even record their deed until the property is sold. 

    As a tax sale investor myself, I sometimes get properties because the bank is sleeping. The tax sale foreclosure becomes final before they get around to paying the taxes.

  • Rental Property Investor · Member since 2019 · 14 posts · 4 votes
    7y

    Okay thanks that makes me feel a lot better

  • Rental Property Investor · Member since 2019 · 14 posts · 4 votes
    7y

    @Ned Carey I finally got the state auditor on the phone and she told me that the redeem period has ended and the house has been deeded to a LLC, I'm a little confused, the bank listed and sold me a house that they legally didn't own, what options do I have now?

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    7y

    @Jerry Barnette  Has the property settled yet? If so, call the title company and make a claim on your title insurance.  You did get title insurance right? 

    I am guessing you haven't closed yet, and you would be entitled to your earnest money deposit back.  My guess is the contract says you have no other recourse if the bank can't sell because they do not have good title

    Who is "they"? I assume you mean the title company. Who does the attorney work for?

  • Rental Property Investor · Member since 2019 · 14 posts · 4 votes
    7y

    @Ned Carey they is the title company, I haven't been able to reach the Seller who listed it on Hubzu and only been able to talk to the receptionist at the title company, I haven't talked to title company agent who has been working my deal and doing the research, the receptionist says she is busy every time I call, haven't spoken to her once during the whole deal. The title company is wanting to move forward with the closing and they are saying the Auditor is wrong and the bank (seller on Hubzu) owns the property and they recorded the foreclosure deed on Jan 2019 and the state auditor is telling me the redemption period ended and popcorn LLC owns the property since 2018 and the property was deeded to them. So confused right now. I haven't closed yet, only sent the earnest money and paid the auction site fee's.

  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    7y

    Certainly wouldn't be the first time an auctioneer attempted to sell a property that was subject to a prior sale.

    No way I would close on this without owners title insurance. I would also be prepared to have the transaction unwound.

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    7y

    @Jerry Barnette My guess is the the bank and the title company are wrong. Just because the bank recorded their deed doens't mean they own it if their interest was wiped out by the tax sale.

  • Rental Property Investor · Member since 2019 · 14 posts · 4 votes
    7y

    @Ned Carey you was correct, I drove by there today and there is a company rehabbing it and they told me they owned the house and they bought it for taxes.

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