Posted by randyOH on September 23, 2002 at 16:13:03:
nt
sheriff auctions in ohio title was not cleared - Posted by mike
Posted by mike on September 19, 2002 at 16:14:22:
We purchased a house for $90,000 at a sheriffs auction, it is a very nice house we purchased as an investment, when we were ready to close on the loan, the laon company informed us the title to the property had never been cleared and we can not close.
Our $9,000 is at the sheriffs office and they will not return our money and say they don’t have to. We are in Ohio and we were told Ohio law makes Titles be cleared before Sheriff Auction, but now they are saying that is not true, WHAT SHALL WE DO??? Who is right, who is wrong?
The bank that holds the bad title tried to trick us yesterday by telling us if we could come up with $90,000 cash they would give us a title, but we found out it would be “A Title” but it would not be “A Clear Title”, we didn’t have that much cash, but they didn’t know that so they actually tried to cheat us. Any sujestions?
“We were told” are the 3 most - Posted by JT-IN
Posted by JT-IN on September 21, 2002 at 14:14:30:
Dangerous words ever spoken…
Mike:
I don’t know who told you taht in Ohio, there is automatically a “clear title, free of liens”, but whoever did, WAS WRONG…
Next, what the Sheriff’s Office told you “they will not return our money and say they don’t have to”, is absolutely correct…
I could go on to lecture you pretty intensely here, as it is evident that you really don’t know how it is supposed to work, and shouldn’t be finding yorself in this position, but since you are THERE, I will need some more info in order to help some…
The situation you may find yourself in next is this… If you don’t come up with the balance of the payment; (81K), you can be held in “Contempt of Court”. You see buying proeprty at a Court Ordered Auction is considered to be a Court Proceedure, and you are now attmepting to modify a Legal Obligation you made with the Court… by making the bid in the 1st place.
I would not jump to the conclusion that the Bank “Lied to You” about the Title to the property… but that may be another subject, and several things being said that do make sense to you at this point.
So 1st question is this… Has the Court “Confirmed the Sale” yet…? (Thisis an all important question). the answer to which may determine if you have much of an alternative here, or not.
Next questin is… What is the cloud or issue with the Title…? Can it be easily fixed, or is it a catastrophic error…? I have had Title problems with forelcousres in Ohio, that were discovered during the confirmation period, and we were still able to pull the rabbit out of the hat. All may not be lost yet, depending again what, where and how things are messed up…
You may want to email me off the board (privately) and I can better know how to assist you… I will say this, though… Every day that ticks by at this point, may well be precious time, so whatever you do, you will want to do it VERY PROMPTLY !!!
Lots of suggestions, but I need to know much more about the actual situation…
JT-IN
Re: sheriff auctions in ohio - Posted by JHyre in Ohio
Posted by JHyre in Ohio on September 21, 2002 at 06:45:40:
You do need a lawyer that specializes in these matters (I don’t!). Post on the MNG, Attention JT-IN - he does a lot of sheriff’s sales in OH and knows more than most lawyers on the topic.
John Hyre
Re: sheriff auctions in - Posted by Nate(DC)
Posted by Nate(DC) on September 19, 2002 at 18:23:42:
You need your own local real estate lawyer representing you, ASAP!
Where are you in Ohio? Perhaps someone on the board can recommend a lawyer.
NT
Question … - Posted by Redline
Posted by Redline on September 22, 2002 at 13:06:57:
Hello JT!
I guess this varies by state, but I thought the worst that can happen to you if you bid - win - and then don’t close a property from the auction is you lose your initial deposit. Is this not true?
Thanks,
RL
Not True… - Posted by JT-IN
Posted by JT-IN on September 22, 2002 at 14:07:08:
At least in the county where I purchase most, they can and do file contempt of court charges… if you default on final payment.
If you think about the process, when one defaults on a bid that they would make at Sheriff Sale, and you are afforded the opportunity to pay on terms… (10 or 20% on day of sale, balance due in 30 days), and you default, you are seriously jeopardizing the Plaintiffs attempt to legally collect a debt. This can be quite costly to the Plaintiff, so why whouldn’t there be some stiff penalty to a defaulting party…? I am all in favor of that. Afterall, it is this type of default activity that cause some Atty’s and Plaintiffs to offer no terms but cash on the day of sale, so it affects everyone.
I say throw the book at em… LOL
JT-IN
PS. Redline: So what was the cost of replacing the curbs…? Did you get the deal together…? Hope all works out for you and yours. JT
Question - Posted by randyOH
Posted by randyOH on September 22, 2002 at 21:49:41:
JT,
I thought all liens (except possibly IRS) were wiped out by the sheriff sale. The people in the sheriff’s office where I bid tell me the only thing I need to be concerned about is back property taxes. Do you search title for all the properties you bid on? Considering the odds, I would think that would be prohibitive. In my county, at least 80% of the properties are bought by the lender. What kind of liens could survive a sheriff sale? Would appreciate your thoughts.
Thanks,
Randy
Proves the point… - Posted by JT-IN
Posted by JT-IN on September 22, 2002 at 23:15:50:
About the 3 most dangerous words are… “We were told”. Now if you went back to the Sheriff’s Office after having a problem on title following a Sheriff Sale purchase, I wonder if that person would step in and make it right for you…? One word answer… NOT!
Hi Randy:
Believe me when I tell you that I know of too many folks that have learned this lesson the hard way… Have bought at the Sheriff Sale, thinking that they had no concern over cloud on title issues, or unreleased liens, and have found themselves in a position of either paying off a remaining lien … or keeping the property long term, without the ability to mtg it at all.
Here is how it works… In theory at least, if the foreclosure is prosecuted properly, there will be a clear title to the property following the foreclosure and issuance of deed. It is when a mistake is made that a lien may survive. Granted, this doesn’t happen too often, but it happens… When a mistake is made, the Atty or Law Firm at fault has no liability to you, (the buyer) as they did not represent you. Now if they made the mistake and their client bought it back at sale, the Atty would be liable to correct… or stand good to clear the title, even if that means paying off a lien. This is what Attys carry Errors and Omissions Insurance for…
Now how a mistake is made is this… Lets say there are 5 liens on a property. The atty does not serve one of the lienholders properly, then that lien is NOT expunged in foreclosure, meaning it will survive the sale. Yes… in this case a 3rd party buyer, known as an Investor, would be buying the property “Subject To” that lien not properly served.
Look at is this way… and it is easier to understand. Lets say you have a lien on my property… say a 10K Junior mtg; (doesn’t matter if it is 2nd, 3rd, or 10th lien). Now I do not pay the 1st, they foreclose on the security, (the house). You are not served… or given constructive notice that the 1st is foreclosing. Why should your good and valid lien be expunged…? It shouldn’t, and it isn’t. You would now have a 10K 1st mtg, if the sale goes through, even if the Bank bought it back… Cool huh…? Or if an Investor bought it, you would be before any new liens they acquire, except taxes…
So ask yourself this… Have you ever seen an Atty make a mistake…? It happens all the time; they are human, and truthfully, in many cases they are relying on a Law Clerks (Student) research in order to render a Legal Opinion… That is scary…
So how do I avoid buying without liens surviving the sale…? No, I don’t do a title search on everything that I might bid on… Yes, that would be quite unmanagable, and impractible. What I do is this… After buying at Sheriff Sale, I then call my Atty and have them render a Legal Opinion… in writing to me, of the status of title following the foreclosure. They are in essence guarenteeing title to me, based upon their opinion. Now, have I ever had a problem show up on a title report… You bet I have, and at that point, much before the Confirmation of Sale occurs, I then go back to the Firm who made the mistake, and put them on notice that they either fix the problem, or I petition the Court to set the sale aside; nullifying the sale. In every case I have got them straightened out before confirmation, w/o having to set aside a sale.
Now if I had assumed that the title would be clear, I would have bought some with problems, but fortuanately, I am happy to report that this has never happened to me. Most of the problems are due to recording errors, but once the sale confirms (State of Ohio law only), then you are up sh*t creek w/o a paddle… Best to avoid that dilemma if possible.
As you have probably read here many times over… Foreclosures are complex and not for the uninformed… This couldn’t be more true of a statement… Hope this clears up some technical issues for you, Randy.
Just the way that I view things…
JT-IN
Two more questions (please?) - Posted by randyOH
Posted by randyOH on September 23, 2002 at 12:20:28:
JT,
Thanks very much for that explanation. This is totally new to me. I would like to start following your approach, but I have two additional questions if you would be so kind. First, could you give me some idea of what a lawyer would charge for that legal opinion? And, second, how do you identify who made the mistake? Would it be the lawyer handling the case for the plaintif?
Thanks again,
Randy
Outstanding Discussion… - Posted by JHyre in Ohio
Posted by JHyre in Ohio on September 23, 2002 at 06:33:26:
JT:
Thanks for your expertise, as always!
Hyre
Re: Two more questions (please?) - Posted by JT-IN
Posted by JT-IN on September 23, 2002 at 14:11:12:
Randy:
The cost for the legfal opinion… and title gurarentee that I pay is $ 300.00 per title check and legal opinion. Now I can hear some out there saying it now… “I can get that done cheaper!” And the answer is… of course you can, and I could too, if cost was the issue. It is of course no consequence here. What is ALL important here is this… If my Atty makes a mistake in chekcing the title for me, (post sale, after I am now the successful high bidder), then I want someone who is CULPABLE… not the lowest bidder, who may of may not be around for a few years to come… In this instance, instead of buying title insurance, I am buying the legal opinion of this Atty to ME, and only to ME, that I will in fact get a clear title following the completiuon of the Foreclosure confirmation. If this screws up in any way, HE is on the hook… visa-vee his Errors and Ommissions Ins claim, not doubt. Or maybe more practically, he is w2orking like a dog to clear the title, without additional cost to me. So far this approach has worked outstanding for me.
As to who made the mistake… yes it would be the Plaintiffs Atty, as they are charged with the responsibility to render clear and marketable title to their client; the Bank/Lender. However, if their client is not the high bidder, they are under no obligation to you, me or the Sheriff to have done anything correctly… So the best approach is to not rely on their work to be totally accurate, and you should be fine.
One more point is this… If you buy a property at Sheriff Sale, then have title checked by a competent title Atty, and there is a flaw discovered, and you petition the court early on to set the sale aside… ther is NO guarentee that the Judge will set it aside. Again, I am relying onthe premise that with competent counsel, and approaching the court early on following the Sale to request this set aside, and making the case that the Plaintiffs Atty did some sloppy work, most times the Judge will grant the motion… but it is still not fool proof…
Yet another risk of buying at Sheriff Sale. Now if I were to go on and fully disclose each and every risk at SS… you might never ever buy anything. This process is frought with obstacles, and there is all the reason in the world to be very cautious and careful when buying via Sheriff Sale…
Hoep this helps yor thought process on the matter.
JT-IN
Re: property cost - Posted by modestine
Posted by modestine on July 11, 2005 at 17:15:30:
3 property sold for 77000 that was the price on the assessment sheet online if someone by three units at the same time under the same name which is a corp . do they list the prices together or separate. ofr each unit.