Originally posted by @Ambre Hurak:
Hello All!
My first post, but have marveled in the info you all have provided to me so far. I'm a teacher looking to purchase a house at our county sheriff's auction in 2 weeks (summer…). I've been to a couple auctions already and got a good feel for how they are run, but I still have some uncertain questions. I don't want to sink my savings into a flop! These may be very "naive" questions so thanks for the patience with me! Just as an overview: the house is in Ohio - Union Co. It's been vacant for a year, according to records. Appraised at $71,000. Estimated resale at $120,000. Hoping to walk away with the home at no more than a $55,000 bid. (seems possible at these particular county auctions). Questions:
1.) What happens directly after the bid? The auction is over, then what?
2.) What will a title search specifically tell me? I've done research on it (extensively), but there are still things I want to know.
3.) How do I know if there's a mechanic lien for improvements that were done?
4.) How about an IRS tax lien? I see on the auditor's website the property taxes are pain in full - does the bank pay them to keep them current?
5.) Is it inappropriate to call the owners if I was able to find a number with their new address? What questions would you ask?
My husband and I, along with MANY family members are general contractors/carpenters. While I'm not worried about the "mechanics" of the home, I'm worried about the finances attached that I didn't find in my search and just the unknown of potential liens. I'm a planner that has to have all bases covered to make the smart decision.
Thanks for any help and advice you give this newbie!! It's much appreciated.
Hi,
Typically if the bank had mortgage insurance (PMI) on the loan, they will try to be the highest bidder, so they can "cash in" their mortgage insurance and minimize their loss.
There is also a 30-day period from the sale where the owner can remedy their loan (which typically doesn't happen).
You can ask a title company to do a preliminary title search on the property, which could show tax, mechanics liens. If you actually win the bid and are in contract, the title company will do a full title search and when you close, the title company insured they are conveying you a clear title. Should something arise after the closing, it falls back on the title company to pay and clear up.
Banks do keep the taxes paid. They don't want tax liens on the properties either. The title company verifies this as well, and the Seller/bank has to pay taxes until the date of closing.
Historically I've not had good luck that late in the process to reach the owner, or have any luck going through them. Remember they most likely are still upset about losing their home. Most don't know they still legally have the right to sell their home up until the date of the sale. If the house has been vacant that long, they've most likely moved on and don't want anything to do with the property.
I'm an agent in Franklin County. If you'd like me to some research for you in it, I can try. I'd say you're more likely to buy the home for less at the sake vs contacting the owner. Sadly they probably owe much more on the property than the bank will sell it for. It's disturbing banks won't lower a balance or terms for the current owner so they can keep their home, but will turn around and sell to someone else for pennies on the dollar. Good luck, let me know if I can help with any of your research, on this or other future properties.
