Using a real estate attorney

[Nadine Hylton]

Im just getting into tax deed sales (here in texas) and plan to attend my first sale this week. I dont have enough info to start bidding yet, but wanna attend to see the layout and get the feel and maybe make some connections. Ive been researching for a couple of weeks now and think I have the basics but still working through the nuances like what if the property also has other liens or a defaulted mortgage, etc. What's a good workflow to research individual properties BEFORE an auction.

I was planning to consult a local real estate attorney to get location specific information and to answer my question (correctly) about the laws in my county. Has anyone else done this? I know I'll have to pay for their time, but seems like a better investment that buying a guru course. With the amount of free info available here, on podcasts, and on youtube, and books, I think speaking to attorney would complete my sphere of information. Does anyone keep a close relationship or attorney on retainer for those who've been doing this business for sometime? Would a tax deed savvy realtor be able to provide much of the same information?

Thanks for any information, I just wanna spend my researching time and monies wisely.

[Bruce Lynn]

@Nadine Perry    Always good to go to the sale and observe...take your list, see what your Maximum bids would have been, and see if you would have won any with your max bid.

If you're going to Harris county there used to be a lady who would give a brief overview of the sale maybe 1/2 or 1hour before the sale.

Not sure if it is this lady or not....or even is she still does it.

There is also a group called RAD that might show up and give a brief overview, just in case you see shirts or signs.

Here is the guide to Harris County.....it is a little different than other counties due to number of properties and size of the county.

https://www.hctax.net/About/An...

They don't have one big sale, but split it up by Precinct....I believe 1,2,3,4,5,6,7   so essentially 7 different sales.

You may have work to do with your title company to get some liens removed if there are any...like mortgages.

Governmental liens like IRS, Treasury, city liens, code compliance, demo liens things like that typically don't fall off and can't be negotiated...you'll have to pay those in most cases.  Won't say 100% you can't negotiate, I'd say it's a bonus, but don't expect it.

Chances are you will not actually get to bid on a property with a mortgage on it.  Most of those get paid day before or morning of auction and will get pulled, not actually go thru with auction.  My thought, but not experience, is even if you find a property with a decent mortgage on it, don't think it will just get wiped out.  Some bank is not likely to go away quietly if you think you are going to wipe out their $300K or $400K mortgage.  They'll probably lawyer up, say they weren't notified properly and make your life miserable, while you have to hire your own attorney and pay that out of your funds.  Honestly I think those are pretty rare.   I don't think I've ever seen one with big mortgage from a big lender actually get all the way to the sale.  Maybe you can wipe it out if it was some small lender with a small balance, and they don't want to mess with fight or foreclosure.

I hope you can find an attorney that will talk to you and know what they're doing, but I've found there are very very very few attorneys that really know anything about tax sales in Texas.   I'm in DFW and feel like a know and work with some of the very best board certified real estate attorneys.   When I asked them to write a Redemption Deed once for the rare person who wanted to redeem, none of them had ever seen one.  If they are title attorneys or maybe even other real estate attorneys they may know the bare basics is what I've found.

Probably the exception is the attorney's that run the 3 big law firms that handle the tax sales.  Not sure if they would ever go to lunch with you or not.  Most of them I have met were pretty nice and down to earth people, but I would be surprised if they would want to spend even 1-2 hours with someone new wanting info on tax sales.  Probably just not a good use of their time when they are representing the taxing entities.   Now and then you might get lucky though, so doesn't hurt to try.   If you do find someone and they give you 1-2 hours and really dump a lot of good info on you please let me know who that is.   I would also say there are very few tax deed savvy realtors around too.  It's very tough I've found, to find many/any experts.   Not trying to beat up on people, it's just not a focus for most.  I'll bet less than 1/2 of any real estate office has any idea what a tax sale is (even though it was recently in our Legal update training) and I'll bet 95% have never been to a tax sale or even the regular foreclosure sales.  Your test could be asking....when is the tax sale, where is it?

My best source of info has been at the auctions themselves.....network like crazy, get there early, talk to people, ask questions, ask the constable/deputy, ask the ladies from the tax/appraisal offices if they're there.  If someone buys the property you were interested in, ask them what they're going to do with it....live in it, flip it, rent it, or what?   Sometimes the property may be way more interesting to them at a higher price than it is to you as an investor....like they own two lots, and the one of interest is in the middle of those two, or they live next door, or own the property next door, or some other compelling reason.  There always seems to be one really good expert at most sales, you just have to find them.

One thing I always tell people, is before you bid, you know 100% best you can on what you are buying.  Drive every property, drive the alley if you can.  Google street view and sat view can help you eliminate properties, but they can't tell you which ones to buy.  Can't tell you how many times I've seen a great GSV and get there and the house is gone.  Or GSV has the wrong address of a beautiful house and the one in the tax sale is trash or just a lot.

I've never really seen a good guru course for Texas. You might ask around at your REIA events and some of those people have given fairly cheap courses and make sure they're from Texas and work in Texas. Don't pay big money for a National Guru course, they just tend not to know Texas and just give general info about the idea of tax sales.

Also remember the sales are immediate cash sales in Harris and most counties.  You might see something with minimum bid of $15,000 lets say, but it will get bid up to $100,000.  No checks, no hard money, no bank loans, 1 minute after the sale you have to pay that $100K or $200K or $300K in cash.....if you see people walking funny it's because their boots or bras are full of cash or they might be carrying a super heavy briefcase or duffle bag.   People are not shy about bidding at Harris.  There may be deals now and then, but some bidders will make your head spin.   In Harris you also have to register to bid, probably you also have to have a statement from tax office saying you don't owe any back taxes, so check that out while you're there.

Good luck and best wishes and give us an update on your experiences.