1) Ask a real estate agent to provide you with a title report or a pre-liminary title report for you to investigate ownership, loans against the property and what liens may also be attached to the property on top of what the IRS or Child Support Services may have against this asset.
2) To investigate the property further you can visit city hall, in which the property is located in, and cross reference what they have on record with how title reads, and what you observed on your drive by preview.
3) Also ask your agent to generate a CMA so that you will have a "maximum target price" you will not exceed at the auction should you decided to pursue it..
Concerns to think about:
1) Since the property is occupied you will not be able to perform a home inspection to determine the condition of the property's interior which is a major factor, but not a deal killer.
2) Your not familiar as to their demeanor or the occupants which means you are not sure if they will cooperate with you or not.
3) Should they be hostile you will have to evict them which is money out of your pocket so I advise you to do some homework in this area if you are not familiar with the laws in CA relating to this topic.
4) If they are cooperative you may still need to spend a little bit of money to help them move out so that they see you as a nice guy instead of associating you with the bank.
As an investor it's all about the numbers which is why investors "will" purchase properties at auction but only after doing as much homework as they can. My best advice for you is to team up with a well versed agent who can share with you this advice, and be able to obtain the data which you need in order to make a wise decision. This type of purchase takes a team effort in order to iron out as many wrinkles in the deal so to avoid matters which you did have control of or were aware of.
Good luck...always here to share my experience and knowledge!
I work with many Investors and know the ins and outs of foreclosure sales. Feel free to call or email me if you have any questions.
Realty One Group
P.S. You can get great deals through auctions as long as you know what you are doing :)
home inspector with you. Some of these homes have serious rehab needed. Having bought
repos and rehab properties in the past, I would urge you to make sure you count the cost and
do a comparable market analysis before laying down your hard earned cash. I'm seeing homes
flipped by investors that have covered up problems and people don't even know what they're
buying may be a money pit. Let the buyer beware!
Star Real Estate
You want to buy an REO through an online auction house, you indicate they do not offer title insurance and provide yo a quit claim deed instead and I assume there will also be a fee paid to the auction clearing house. This sounds dicey. Quit claim deeds do give you as the grantee some legal rights to the property but only as much as the grantor (the person quit claiming) has. You would basically replace that person and as I understand it inherit all their issues with the property. So if they are behind in property taxes, HOA dues, have other liens against the property you inherit all those too and because a quit claim deed offers no warranty you would likely have no legal recourse against them.
Quit claim deeds are most often used to transfer property between family members, as gifts, placing personal property into a business entity or in other special or unique circumstances like a divorce. Quit claim deeds are not typically used to transfer or sell property from seller to buyer.
If you are paying cash and want the best deal, some risk though, not why not buy at the Trustee Sale at the courthouse steps? There is a bit of a risk as you seem to be aware and you will want to be sure the title is free of any outstanding liens or issues. A cloudy title can ruin what looks like a good deal. You need to be ready to pay at the end of the sale (cashier's checks). At least this way you would get ownership in the form of a grant deed.
If you haven't been to any of these kind of sales I would suggest you go to see how it is done, they move rather fast.
Why Realtors typically do not assist with these is there is no commission to be earned and if one was to advise you or assist you somehow they have created a form of agency and can then if there is trouble that Realtor is putting them selves in a bad position. If you would be willing to offer the Realtor a commission and sign an agreement as such then you may get help/advise more easily.
The investor auction business has many challenges but can be rewarding too. Please do your homework regarding quit claim deeds and how they are being used in this instance. Ask a lot of questions and good luck.
Brian Wilson, Realtor
The only issue we had was that the services provided for escrow were located in India and after 3 months of non performance from those people, the agent was willing to go with my escrow and title and we got it closed in 3 weeks.
So be careful and if I can be of help feel free to contact me,
Barbara Robbins-Olexa, Broker
L B Brokerage
You are talking resking $200,000 to $400,000 (Anaheim prices) to buy a pig-in-a-poke, without Inspections, without Title Insurance, and with possible Liens:
Do you enjoy walking the plank?
Do you think the Auction house is concerned with your best interests?
Good luck and may God bless