Offer accepted on what appears to be a Tax Lien Foreclosure......

[Alex Smith]

Hi BP!

We put an offer in on a cheap house nearby that we were surprised hadn't sold yet, but we just figured maybe it didn't sell because there were no pictures online and it looks pretty bad from the outside. We went through, were happy with what we saw, but decided to offer $10,000 less than asking. Low and behold, it looks like they are accepting our offer, however, this was the response.....

"Seller acquired this property through a tax lien foreclosure Property is vacant but old owner can, if they make an application to the courts, try to redeem property for up to 1 year from when my client took title. Which was on 7-2-19. Therefore when your buyer closes there will be an exception in title that will expire 1 year from above date. Keep in mind that the old owner will have to prove hardship which will be difficult since they have abandoned the house. Please advise that your client understands and they are willing to move forward"

I somewhat understand, but then again I don't. If we were to purchase this house, would it be too much of a risk to begin renovations and place a tenant? Would it be a situation where we would just hold it until next July and then begin renovations? Have you ever been involved in a situation like this? What would you do...assume the risk? Or say ..."nahhh, not worth it."

Any guidance would be greatly appreciated!

[John Underwood]

I would do a title search and try and find old owner and see what the story is. You are taking on some risk and you price should reflect this risk.

This is an opportunity and I would not shy away from it, but do some research on who is loosing the house and why. See if you can get a Quit Claim deed from old owner for a few $$ and you risk goes away.

Offer less money than you already have.