Investing in foreclosures

[SD Realtor]

UR to me due diligence and contingency periods are independent events. A contingency period is an amount of time you have that starts at acceptance and ends at some point after acceptance. A due diligence process is a process you the buyer goes through to find out information about a home you want to buy. A due diligence process does not need have a necessary start time or even an end time for that matter. Obviously it is bounded in some manner by the contingency period and your liability as a buyer increases substantially (ie the cost of the home in the case of a trustee sale) by not completing due diligence prior to contingency periods ending.

Abstract it out. You can perform due diligence anytime if you like, even BEFORE the purchase of a home which is strongly advised in a case of a trustee sale.

Yes as far as I know trustee sales are all cash. I believe my post stated contingency = 0 for trustee sales, and I was trying to imply that the due diligence process may be started early (prior to the auction) for trustee sales by trying to knock on the door to get in.

[urbanrealtor]

SDR, that is a good model for thinking about it and good model for addressing the issues involved. The only caveat I would add is that generally title companies have records a few days out of date. Sometimes the getting a title policy does not cover claims arising from events between their last update and the issuance of the policy. For example there is a trustee auction on Aug 30. On Aug 29, your preliminary report and policy are issued. The title company files were last updated on Aug 25th. There was a mechanic’s lien filed on Aug 27th.

I don’t know if there is a title policy that would protect you from this. There might be. In fact, I don’t know what the procedure is for issuing policies for trustee sales. Do you happen to know?

So I have too many unknowns here to make an actual case for the danger involved. However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road.

[urbanrealtor]

SDR, that is a good model for thinking about it and good model for addressing the issues involved. The only caveat I would add is that generally title companies have records a few days out of date. Sometimes the getting a title policy does not cover claims arising from events between their last update and the issuance of the policy. For example there is a trustee auction on Aug 30. On Aug 29, your preliminary report and policy are issued. The title company files were last updated on Aug 25th. There was a mechanic’s lien filed on Aug 27th.

I don’t know if there is a title policy that would protect you from this. There might be. In fact, I don’t know what the procedure is for issuing policies for trustee sales. Do you happen to know?

So I have too many unknowns here to make an actual case for the danger involved. However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road.

[urbanrealtor]

SDR, that is a good model for thinking about it and good model for addressing the issues involved. The only caveat I would add is that generally title companies have records a few days out of date. Sometimes the getting a title policy does not cover claims arising from events between their last update and the issuance of the policy. For example there is a trustee auction on Aug 30. On Aug 29, your preliminary report and policy are issued. The title company files were last updated on Aug 25th. There was a mechanic’s lien filed on Aug 27th.

I don’t know if there is a title policy that would protect you from this. There might be. In fact, I don’t know what the procedure is for issuing policies for trustee sales. Do you happen to know?

So I have too many unknowns here to make an actual case for the danger involved. However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road.

[urbanrealtor]

SDR, that is a good model for thinking about it and good model for addressing the issues involved. The only caveat I would add is that generally title companies have records a few days out of date. Sometimes the getting a title policy does not cover claims arising from events between their last update and the issuance of the policy. For example there is a trustee auction on Aug 30. On Aug 29, your preliminary report and policy are issued. The title company files were last updated on Aug 25th. There was a mechanic’s lien filed on Aug 27th.

I don’t know if there is a title policy that would protect you from this. There might be. In fact, I don’t know what the procedure is for issuing policies for trustee sales. Do you happen to know?

So I have too many unknowns here to make an actual case for the danger involved. However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road.

[urbanrealtor]

SDR, that is a good model for thinking about it and good model for addressing the issues involved. The only caveat I would add is that generally title companies have records a few days out of date. Sometimes the getting a title policy does not cover claims arising from events between their last update and the issuance of the policy. For example there is a trustee auction on Aug 30. On Aug 29, your preliminary report and policy are issued. The title company files were last updated on Aug 25th. There was a mechanic’s lien filed on Aug 27th.

I don’t know if there is a title policy that would protect you from this. There might be. In fact, I don’t know what the procedure is for issuing policies for trustee sales. Do you happen to know?

So I have too many unknowns here to make an actual case for the danger involved. However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road.

[SD Realtor]

Yep you are definitely bound by the timelines with regards to a title search. All part of the bumps and grinds that go along with going for trustee sales right? In general trustee sales are definitely not for rookies. However they do afford opportunity for people who want to take the time, understand them (and the inherent risks), and who have the cold hard cash to get a deal. Personally I have neither the time nor cash to do it myself.

Yet if I did have the time and cash I would take the time to learn about them and definitely attend auctions.

[SD Realtor]

Yep you are definitely bound by the timelines with regards to a title search. All part of the bumps and grinds that go along with going for trustee sales right? In general trustee sales are definitely not for rookies. However they do afford opportunity for people who want to take the time, understand them (and the inherent risks), and who have the cold hard cash to get a deal. Personally I have neither the time nor cash to do it myself.

Yet if I did have the time and cash I would take the time to learn about them and definitely attend auctions.

[SD Realtor]

Yep you are definitely bound by the timelines with regards to a title search. All part of the bumps and grinds that go along with going for trustee sales right? In general trustee sales are definitely not for rookies. However they do afford opportunity for people who want to take the time, understand them (and the inherent risks), and who have the cold hard cash to get a deal. Personally I have neither the time nor cash to do it myself.

Yet if I did have the time and cash I would take the time to learn about them and definitely attend auctions.

[SD Realtor]

Yep you are definitely bound by the timelines with regards to a title search. All part of the bumps and grinds that go along with going for trustee sales right? In general trustee sales are definitely not for rookies. However they do afford opportunity for people who want to take the time, understand them (and the inherent risks), and who have the cold hard cash to get a deal. Personally I have neither the time nor cash to do it myself.

Yet if I did have the time and cash I would take the time to learn about them and definitely attend auctions.

[SD Realtor]

Yep you are definitely bound by the timelines with regards to a title search. All part of the bumps and grinds that go along with going for trustee sales right? In general trustee sales are definitely not for rookies. However they do afford opportunity for people who want to take the time, understand them (and the inherent risks), and who have the cold hard cash to get a deal. Personally I have neither the time nor cash to do it myself.

Yet if I did have the time and cash I would take the time to learn about them and definitely attend auctions.

[SD Realtor]

Yep you are definitely bound by the timelines with regards to a title search. All part of the bumps and grinds that go along with going for trustee sales right? In general trustee sales are definitely not for rookies. However they do afford opportunity for people who want to take the time, understand them (and the inherent risks), and who have the cold hard cash to get a deal. Personally I have neither the time nor cash to do it myself.

Yet if I did have the time and cash I would take the time to learn about them and definitely attend auctions.

[NotCranky]

However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road. [/quote]

Mechanics liens have many requirements that must be met to make them be worth filing and hold up. A legal contract or employment by someone with a contract or subcontract from a legal agent, for the property in question is one of them. A 20 day notice to the owner to pay or face a recorded lien is another. A motion to foreclose must be undertaken within 90 days of the recording of the lien.

Someone can record an invalid lien but there is no real incentive with regards to abandoned houses.

[NotCranky]

However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road. [/quote]

Mechanics liens have many requirements that must be met to make them be worth filing and hold up. A legal contract or employment by someone with a contract or subcontract from a legal agent, for the property in question is one of them. A 20 day notice to the owner to pay or face a recorded lien is another. A motion to foreclose must be undertaken within 90 days of the recording of the lien.

Someone can record an invalid lien but there is no real incentive with regards to abandoned houses.

[NotCranky]

However, it has occurred to me before that an unethical contractor could just go around doing minor work on abandoned properties and filing liens that the bank would have to pay off down the road. [/quote]

Mechanics liens have many requirements that must be met to make them be worth filing and hold up. A legal contract or employment by someone with a contract or subcontract from a legal agent, for the property in question is one of them. A 20 day notice to the owner to pay or face a recorded lien is another. A motion to foreclose must be undertaken within 90 days of the recording of the lien.

Someone can record an invalid lien but there is no real incentive with regards to abandoned houses.

[Author]

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