You pretty much need to do a title search before going to a courthouse steps auction, if you did five title searches, one might actually go at auction. The problem is that when the bank repos, then sells on the open market, the liens are cleared, the second is wiped out, the seller then has to pay all back taxes and hoa. If you see a great deal at an auction, just know there is more than just an cracked slab that might be lurking, because at the steps you don’t get clean title.
There was a place that went up for auction recently near me, a friend from pig e-mailed me about it and we wondered why nobody bought it at auction, since it sold at auction for 230k and two weeks later than bank listed it for well into the 300’s, somebody missed a bargain or a flip, right?
Well, actually a buyer at the courthouse steps would have to deal with the other lien holders and the back fees. It turns out those costs were beyond 150k, but not advertised as part of the courthouse steps process, and it’s not listed as a recording on the foreclosure services other than for the 1st mortgage. So letting the bank take it back, wiping the other lenders or paying them off, paying the back taxes (sometimes a couple years worth), then getting the clean title for 320k or 330k is actually cheaper than buying from the steps and settling the debts, which would have hit 370k minumum for that 230k bid. It looks like paying 30 cents on the dollar, but most fb’s took an 80/20 and then heloc’d some more, so alot of these bidding prices are just the tip of the iceberg and what the primary lender is owed.
