Posted by Frank Chin on March 03, 2005 at 15:44:57:
I’ve bought properties at auctions here in NY State and MA.
The ones I bought are “free and clear” of liens from the bank who sold them as a foreclosure. None the less, I checked public records for leins and violations. They tell me the violations are my problem, and I bought with that understanding.
I’ve also been to auctions where properties are sold with leins.
The owner of the property next to mine bought his as an REO thru another bank that foreclosed on the same developer. He didn’t ask and the bank didn’t tell him there were leins attached. He wound up paying close to 50K to clear the leins.
I found this out mentioning to him that I checked the public records are found out he paid 215K for his property, and I paid 227K for mine, and I told him he got a better deal. He replied that I got the better deal as he paid 215K PLUS another 50K.
At any rate the FMV at the time of the auction was 325K, so both of us did OK. This was after a market crash, and the properties were worth 399K only a few years before.
I held on to them as rental, and the property owner next store still lives there. Just got a tax bill saying the property is worth 775K and similar ones in the neighborhood sold for 800K.
In hot markets, folks can make a 50K mistake and still land on his feet.