Due diligence when Buying at Auction?

Question

Hello all,

What due diligence should an investor complete before making a bid for auction sale? How would a person Research Liens on a property?

Thanks!Travis

Derrick Lind · Answer

You can get a title report (of different levels of completion) for about $180 from a couple of website like, US title records. With the additional cost you might only do select properties. Another way is to look at PropertyRadar or others. Another method is to look at the property records on the county website. After you have done it a few times it gets easier although that has a cost too (your time).

Look at the draft contract  it will say what kind of title they are obligated to provide.  Most REOs will provide a generally clean title.  If you win you will need to pursue and pay for title insurance.

Local PMs can be a good reference to help with a drive by or walk by.  Few auction provide buyer’s agent commissions too.

Kevin Ivey · Answer

I utilize the county records searches, a lot of liens will fall off after an auction, water and sewer won't they have you hamstringed there.  IRS liens fall off after 180 days, HOAs typically have it so they can only collect 6 months of back dues from you.  All of this might take a little negotiating or legal pressure to get cleared up properly and you want to ensure the title is cleared before you list.

Best of luck.  Not a fan of auction.com they have a lot of hidden fees and very generic record searches that leave a lot to you.

Eliott Elias · Answer

Do a title search on all properties, you can use a title company to do this. See the condition of the inside, wether it's knocking on the door or looking through the window.

Travis Mullenix · Answer

Will a local title company "run title?"

Thank you Chris!

Chris Seveney · Answer

@Travis Mullenix

You will need to run title on the property / whether you do it yourself ir through an attorney. You need to know what it is you are bidding on

You also need to get an idea of property condition - is it occupied, how does it look? That has to be done without trespassing on the property

Due diligence when Buying at Auction?

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