In a foreclosure sale, is the trustee required to provide a title search to the winning bidder? What should be done after purchase for clear title?

Asked by William, 92651 Wed Jun 22, 2011

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Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Wed Jun 22, 2011
William:

If you are buying on the courthouse steps, the simple answer to your question is NO. The trustee has no obligation to protect the bidder/buyer. That is why I caution amateurs from buying at the Trustee Sale. This is a place for experienced investors, who make their living based on volume. They also have a full team backing them up like (1) a great title officer or attorney who has done the title search; (2) people on the ground door knocking the house before the sale date to gather as much information on the home and occupants as possible; (3) people on the ground on the day of sale, making sure the kitchen and bathrooms are not, currently or in the past few days, walking out the door with the home owner; (4) and a whole bunch of others like contractors, realtors, and other professionals who are feeding them information about values, repairs, etc.

If you read through trulia posts you will find horror stories about people who bought the 2nd or 3rd TD on the property at auction and then lost their entire investment when the 1st foreclosed or people who thought they were getting a great deal only to find out that property taxes had not been paid for 6 years and the home was going to tax sale or any other number of tales. Beware of thinking that buying at the Trustee Sale is such a great deal. Even the experienced investors lose money on a percentage of their deals. They make up for it in the volume and the averages.

Hope this helps. If you have further questions, please feel free to contact me. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
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RE/MAX Palos Verdes Realty
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1 vote
154pearl, Home Buyer,
Fri May 18, 2012
check out http://www.countyrecordsresearch.com the have a great educational area on their web page. Sure there are risks, but it's a great way to make money. Do you due diligence: drive the property, che3ck comps, if you dont know construction costs get someone that does. checking with a title company and the county tax rolls. etc. I have purchased several over the years. PS. The company "trustee" handling the foreclosure gets a special title policy/search when the property is posted for the trustees protection. They wont do the sale with out it.
0 votes
Sally Grenier, Agent, Boulder, CO
Wed Jun 22, 2011
Make sure you hire a good Realtor to work for you as a Buyer's Agent and insist on having your own title company do the title search.
0 votes
Gerard Carney, Agent, Spring Hill, FL
Wed Jun 22, 2011
You insist on a proper title search and insurance or you put yourself at risk!
0 votes
Sharon Butler, , Orange County, CA
Wed Jun 22, 2011
What the banks are doing is "their own" title insurance. It is buyer beware! and I really mean BEWARE. There is what I do for a living......I review the "Chain of Title" to verify first all the Corporation Assignments are correct, then I review the steps the lenders took prior to the TD Sale. In 4 out of 5 cases the Trustee did several things WRONG which could result in a Wrongful Foreclosure lawsuit. In fact I have one of those right now! Greed is a big problem an investor see a home that looks great, but he know nothing about researching prior to writing the check! It really does not cost that much to do your home work. If you are working with an agent who does not know how to do this SIMPLE review, then that agent should not be representing buyer who are doing "tricky" transactions! I work for many great agents who understand the importance of protecting their BUYERS and investors.Hope this helps.
0 votes
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