Re: Lien on a property

Posted by Christopher on October 17, 2007 at 11:07:53:

In Reply to: Lien on a property posted by Tom on October 17, 2007 at 09:37:09:

Do a full title search on any prop you're interested in and do you best
to inspect it. (Not always easy.) Remember, auctioned houses can have
left-over tenants, etc. It can have a lot of upside, but there are cons
and things to be aware of. Here's a good answer to your question from
Realtytrac....

POSSIBLE PITFALLS OF BUYING AT A PROPERTY AUCTION

DEAR BOB: If I purchase a house at a public auction, am I liable for
debts other than the mortgage on the property? If so, what is the best
way to be assured of knowing what they are prior to the auction? --
John F.

DEAR JOHN: Be sure to read the terms of the auction before bidding. Is
it an auction for unpaid property taxes? Perhaps a mortgage
foreclosure auction? Maybe a homeowner's association assessment lien
sale? Or an IRS income tax lien sale?

For example, if you buy at an auction for unpaid property taxes (not a
tax certificate sale), all junior liens such as a mortgage, judgment lien
against the former owner, and even homeowner association liens, are
wiped out.

However, if you buy at an IRS income tax lien sale, you buy "subject to"
all prior liens such as a mortgage and unpaid property taxes. Also,
after an IRS tax sale, the taxpayer has a 120-day redemption period to
reclaim his property by paying you the amount of your successful high
bid for the property.

Most auctioneers will disclose the prior liens of which they are aware.
To be certain, before the auction you can buy from most title insurance
companies a "title guarantee report" (or similar name), which reports
what encumbrances are recorded against the property title.

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