Land O Lakes, FL · Member since 2013 · 17 posts · 3 votes
thinking of buying property through the court house auction but I want to know if I am still held liable for any outstanding liens (2nd mortgage , contractors....etc) after I have the winning bid
Each state is different, so you need to talk to someone that has knowledge in the state you are buying in. Subordinate liens usually are gone, but property taxes, an IRS liens will stay. In some states, HOA liens stay, and so do municipality liens. And contractors liens stay, only if they are superior to the mortgage that is foreclosing.
In Oregon, we have a program where senior citizens can defer paying property taxes, but need to be paid back at a sale. That can be a big surprise if you don't see it coming.
Buying at auction is serious business, only do it if you know what you are doing.
Each state is different, so you need to talk to someone that has knowledge in the state you are buying in. Subordinate liens usually are gone, but property taxes, an IRS liens will stay. In some states, HOA liens stay, and so do municipality liens. And contractors liens stay, only if they are superior to the mortgage that is foreclosing.
In Oregon, we have a program where senior citizens can defer paying property taxes, but need to be paid back at a sale. That can be a big surprise if you don't see it coming.
Buying at auction is serious business, only do it if you know what you are doing.
I've done some research into buying from the courthouse but I haven't actually done one yet..... partly because of the risk with the things you mentioned. I know that it can be done "safely" but it will take a lot of due diligence on your part. I talked to my local title company about doing a pre-sale title search. I think they quoted something like $150 to do a title search that would reveal any outstanding liens. That should be enough protection for you assuming you've done all of the normal due diligence on the property itself.
I think it's a good idea.....especially since properties are so hard to find through the normal channels right now. I analyzed a property a few years ago and followed it through the courthouse sale. It was a decent (but small) 2 br/1bth house in a low-income (but clean) neighborhood. It sold for $11,001. I talked to the buyer and got his phone number so I could follow up with him later. I called him a week later to see if he was interested in selling it to me and he told me that he just sold it for $22,000. I thought...wow, this guy just made $11,000 in one week and didn't do anything to the house. That hooked me on the idea.
Like all of real estate though, you have to be VERY, VERY careful. Good luck!