AboutDick Dennis Expertise With more than 37 years as a real estate broker, I can solve most any problem presented. If I can`t, I do my research. Problems with mortgages, trust deeds, foreclosures, odd ways of conveying titles. Most any good Realtor can answer questions satisfactorily, but I answer questions that most cannot. Also, ask about my hard-copy newsletter.
Experience Problem solving since 1980
Organizations National Association of Realtors
Publications Publishes The Landed Gentry, guest writer in Who's Who in Creative Real Estate, First Tuesday, Financial Freedom and many newspapers
Question Hello,
I hope you can help me with this ? about auctions on forclosed homes in California. What liens are a buyer responsible for after purchasing a foreclosed home at an auction? If I'm the successful bidder on a first trust deed, would I also be responsible for a second(if any) on that property after the sale? Do any subordinate liens convey? Basically I just want to know what buyers at auctions should be aware of being responsible for. Thanks for any help and advice you may give.
Answer You've come to the right guy, Vicky. I've been involved in foreclosures here in California (and a few other states) a long time.
When you go to bid on a foreclosure, you're most likely going to be standing on a courthouse steps, or a title company exterior somewhere. A person is going to be standing there (some come with their own dais on which to pound a gavel) with a whole sheaf of papers. That person will recite the legal information on that particular property (or properties) out loud to make sure you will be bidding on the right property. Yes, you may ask in advance.
You can see what properties on which you want to bid by looking at the bulletin board somewhere in the courthouse or other official building days in advance. You may finger through them to see when the time and date of sale is being held. You'd most likely want to do that because quite often the company or person who is foreclosing will postpone the sale for whatever reason, most likely they did some talking with the person who owes the money and they have showed adequate evidence they are going to pay the loan off or going to bring it up to date.
Okay, enough of that. I'll assume you know what you're going to bid on.
When you bid on a trust deed YOU ARE NOT CONCERNED WITH ANY LIENS OR TRUST DEEDS BELOW THE ONE YOU ARE BIDDING ON. They are going to be wiped out completely when the foreclosure sale is completed, except an IRS lien. I'll explain that later if that is a concern for you. So, if you're bidding on the first trust deed or lien, then the second, third, etc. will no longer exist after the sale. The only lien the buyer of a foreclosure has to be concerned with are the property taxes. That is ALWAYS FIRST, NO MATTER WHAT. But chances are the property taxes have been brought current by the time of the foreclosure sale because the holder of the trust deed will usually bring it current to save his own position. Just as a second trust deed holder would bring the first trust deed current before he files his foreclosure.
I can write a book on the subject. In fact, there are some pretty good books out already, but the best (which I have) is out of print. Let me know if I can help. I wish you well.
