OfflineGot a call from a motivated seller. (yipeee)
They are thinking of selling their MN property. It has passed the sheriff sale, and in the 6 months redemption stage.
It was a funny call, because i could not get the address out of him. He seems a little gun shy of selling to an investor, but he is still possibly interested.
He told me that the bank purchased the property at the sheriff sale for a lot less than what it is worth, so that sounds like to me that their is a fair amount of equity in it. Have you purchased properties for an investment - flip directly from the homeowner after the sheriff sale before?
What is your experience with purchasing directly from the homeowner before or after the sheriff sale within the 6 months redemption period?
From what I understand: The mortgage is wiped out, and no longer exists. So if I had him quit claim deed the property over to me for a nominal fee, I then would be the current owner. Then I would have to pay off the winning bid amount of the sheriff sale certificate + accrued interest penalties, fees, etc ?
Also before I would even consider purchasing the property, I would check for any outstanding liens, judgements, back taxes, other mortgages ? Because I would be responsible for those, being the new homeowner ?
Does this sound about right, or am I missing something?
Thanks so much for any help & advice that you are willing to give.
Anthony.
If the property went to auction and the bank took it back (they did not purchase it, they already owned it so to speak) Your seller has no right to sell the property. He no longer owns it. I don't think he can sell the property to you and then use the money to redeem the property. He must redeem, gain ownership of the property again (not going to happen unless he has the cash, he doesn't) and THEN sell it to you.
Don't waste your time with this guy is my advise, on to the next! You could contact the bank involved and track the property and make an offer through the banks listing agent what it becomes available.
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
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http://www.mdlodeals.com Tenant/Buyer site
Michael,
Thanks for such a quick response. The Bank was the winning bidder at the sheriff sale (mortgage foreclosure) for the sheriff sale certificate. And the mortgage is wiped out & no longer exists. In MN after the sheriff sale the homeowner has 6 months redemption to redeem. And within the 6 months, the homeowner also has all the rights to the property. At the end of the 6 months , then the bank takes the property back and it becomes an REO.
If the property has a good amount of equity left, During the redemption period, when the owner has all of his rights still, Am I able to purchase the property from the owner using a Quit Claim Deed, then pay off the sheriff sale certificate amount along with all interest, penalties, fees, outstanding back taxes, liens, judgements, other mortgages ?
Thanks for all your help.
The owner does have the rights to sell the property and use the proceeds to pay off the sheriff's sale amount plus interest and fees. They have 6 months and only six months. If you close at 6 months 1 day, you lose out on the property.
The sale places a blight on the property and corrupts the chain of title. The property owner needs to receive a Certificate of Redemption proving that the property is once again in the original owner's full possession.
I would NOT recommend buying on a QC deed. You should get a Warranty Deed to protect your interest in the property. A QC deed only transfers the owner's share of interest (which is very limited at this point). Talk to a real estate attorney or title company for detail.
Even if the property is redeemed, it is not necessarily clear of any liens. All junior liens are once again activated and will also need to be paid off. So make sure that you do your homework before you get over your head in debt.