OfflineI need help!
My wife (the absolute love of my life), who was in the mortgage industry for a while (before the bottom fell out) is very skeptical...almost to the point of wondering "why I am wasting my time". Don't worry, she supports me and loves me, but we keep going back to one question.
In an REO, Pre-foreclosure, FSBO, etc...still has a "balance owed"...example:
REO for sale for $54,500.00 / Bank has had the property for over 6 Months / Right of Redemption (by the home-owner, person who lived in the house) is for one year / Bank states there is a quit-claim from the original home owner / etc...
Can there be other balances owed? If they took out a second mortgage, have someone who did work on the home and placed a lien on the home, or frankly, they had negative equity...
Who is liable for those balances? The Bank? The former owner? Or us as Investors? In other words...if we are offering $54,500.00 for the home...are we PAYING $54,500.00 for the home???
I am embarrassed to be asking this question, believe me, but I really need help on this to make sure I understand that I am not getting myself into "sticky situations" (and to prove myself, or eat crow to, my lovely wife!).
Like always...I come to the DG family, hat in hand, humbly asking this silly question.
Thanks ahead of time for any help the vets can give me!
Jon
Jon A. Lubin
Investment Properties Group L.L.C.
Birmingham, Al.
www.connectedinvestors.com/investmentpropertiesgroup
"You Miss 100% of the Shots You Don't Take" Wayne Gretsky
this will show if there are any 2nd or 3rd mortgages, tax liens anything or anyone who has put a lien on the property...You as the Buyer would be assuming the debt. I was looking at a Commercial property that has a 32,000 lien on it from the township for a water hookup...so it is really important to know what you are buying...title search will show a clear title or clouded and you will know exactly what you are dealing with.
Hope this helps,
Barbara
Everyone has questions and you know the old saying the only stupid question is the one that you don't ask....something like that anyway!
Every state has the same basic procedure, and quite honestly, I don't know why your wife doesn't know that. It is Basic 101 RE Closing. However, not to be too hard on your wife, perhaps I didn't understand the question. There are slight differences regarding the liens dependent upon if it is a foreclosure, short sale, REO, FSBO or MLS home, but generally speaking, any liens stay with the property but can be stripped off through bankruptcy, the short sale and foreclosure procedure. In fact, just read an article from an AZ attorney where his bankruptcy practice has perfected a way to strip them off like pealing a banana. Hope this helps.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
Mostly, I am talking about REO's. My RE Agent says that the "bank has cleared up the title"...but the Mrs. says "you don't know that" and wants to see me closing a deal (even if it is for $10.00) before I do title checks, etc...
Boy, top that off with reading the section in "Be a Real Estate Millionaire" about the guy who got a divorce to "clear the negativity" and I had a really long weekend!!
Just Kidding all, as I said, my wife is what I WANT to be a millionaire for!
Either way, is it best to do the necessary title searches before an offer, or is it best to have "contingencies" included in your purchase agreement that CYA you on the title? any help will be greatly appreciated.
Just Doing it,
Jon
Jon A. Lubin
Investment Properties Group L.L.C.
Birmingham, Al.
www.connectedinvestors.com/investmentpropertiesgroup
"You Miss 100% of the Shots You Don't Take" Wayne Gretsky
Don't take anyone's word for it because in the end it is you that will suffer if things aren't right. You can put something in as a contingency that never hurts, always have an out.
Barbara